You should also consider entering a stop-loss and take-profit value. This will ensure that your forex spread betting trade is executed in a risk-averse way.<\/li>\n<\/ul>\nFinally, confirm your order to enter your first spread betting position.<\/p>\n
Spread Betting Forex Tips<\/h2>\n If you\u2019re looking to get your spread betting forex endeavors off on the right foot from the get-go, consider the following tips.<\/p>\n
Tip 1: Avoid Margin<\/h3>\n When you enter a spread betting forex position \u2013 avoid using margin when you first start out. Sure, the thought of only needing to put 5% of the position value down can be tempting \u2013 especially if you only have a small amount of capital. However, you stand the risk of having your spread betting forex position liquidated.<\/p>\n
As we covered earlier, this means that you will have your trade closed by the broker automatically, and subsequently \u2013 you will lose your entire stake. Instead, consider trading within your means by avoiding margin.<\/p>\n
Tip 2: Stick With Major Forex Pair<\/h3>\n Major forex pairs always contain the US dollar and another strong currency like the pound sterling or the euro. In turn, major pairs benefit from the largest trading volumes and thus \u2013 highest levels of liquidity. As a result of this, you will find that major forex pairs are much less volatile than minors and exotics.<\/p>\n
This is ideal if you are a forex spread betting newbie \u2013 as volatility can be intimidating. Plus, when you trade volatile markets, you will find that both your profits and losses move up and down in a much more parabolic manner. This in itself can result in irrational spread betting decisions being made \u2013 so stick with majors when you are first starting out.<\/p>\n
Tip 3: Always Have an Entry and Exit Plan<\/h3>\n Before you enter a forex spread betting position \u2013 always have an entry and exit plan in place. This means identifying the optimal price to enter the market based on your technical and fundamental research.<\/p>\n
This also means assessing the right time to exit the market. The latter can be achieved by setting up a stop-loss and take-profit order. In following this simple strategy \u2013 you will be able to trade in a much more risk-averse manner and thus \u2013 protect your bankroll.<\/p>\n
Spread Betting Forex \u2013 Conclusion<\/h2>\n In summary, this guide has explained the ins and outs of forex spread betting UK and why this investment niche is ideal for active currency traders. Crucially, not only do spread betting forex providers like Pepperstone\u00a0allow you to trade commission-free, but you won\u2019t be required to pay any capital gains tax on your profits.<\/p>\n
You can also spread bet forex pairs at this Financial Conduct Authority broker with leverage of 1:30 and the minimum deposit is just \u00a320. Only invest what you can afford to lose and start by paper trading on a demo account.<\/p>\n
FAQs<\/h2>\n\n
\n What is forex spread betting UK?\n \n<\/svg>\n <\/h3>\n Foreign exchange betting is a popular trading mechanism, that allows you to speculate on the exchange rate of currency pairs like GBP\/USD or USD\/JPY. For each point that the exchange rate moves - your profit or loss will increase. For example, if you stake \u00a310 per point on an AUD\/USD long order and the pair moves in your favor by 5 points - you will make gains of \u00a350.<\/div>\n <\/section>\n
\n Is forex spread betting better than CFD trading?\n \n<\/svg>\n <\/h3>\n CFD trading and spread betting both allow you to trade forex pairs from the comfort of your home. However, forex spread betting is potentially more attractive - as all profits are exempt from tax.<\/div>\n <\/section>\n
\n What is financial spread betting UK?\n \n<\/svg>\n <\/h3>\n Financial spread betting will see you trade the future value of asset classes like gold, oil, stocks, ETFs, or forex. The other form of spread betting in the UK is focused on sports. This is more aligned with gambling and not financial trading.<\/div>\n <\/section>\n
\n What are the tax laws on forex spread betting UK?\n \n<\/svg>\n <\/h3>\n In both the UK and Ireland - profits of forex spread betting are exempt from capital gains tax. In the UK specifically, there is no stamp duty to pay when you enter a spread betting trade.<\/div>\n <\/section>\n
\n Where can I find a spread betting demo account?\n \n<\/svg>\n <\/h3>\n Spread betting demo accounts are used to learn how this trading scene works in a risk-free manner. One is offered by Pepperstone. Once you have registered your information - you can start spread betting via the demo account straight away.<\/div>\n <\/section>\n
\n Is forex spread betting legal in the UK?\n \n<\/svg>\n <\/h3>\n Forex spread betting is perfectly legal in the UK. The industry is regulated by the Financial Conduct Authority (FCA) - so spread betting brokers must ensure they remain compliant with UK laws. Additionally, UK spread betting brokers are covered by the Financial Services Compensation Scheme (FSCS). This protects your money up to the first \u00a385,000 in the event the broker went bankrupt.\u00a0 <\/div>\n <\/section>\n
\n How much leverage do forex spread betting UK brokers offer?\n \n<\/svg>\n <\/h3>\n If you are a resident of the United Kingdom - you will be offered leverage of up to 1:30 when trading major currency pairs. Minors and exotics come with slightly less at 1:20.\u00a0 <\/div>\n <\/section>\n <\/div>\n\n