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Forex Spread Betting

Investors are quickly embracing the idea of forex or currency trading (as well as forex spread betting).

In comparison to stock trading it provides numerous benefits. Firstly, it is more convenient; it can be done 24 hours a day and not limited to the first few hours of the day as in the case of stock trading. Secondly, certain currencies can be quite stable in their long term trends. Thus, losses are minimized due to the absence of sudden fluctuations (granted profits may be lower in comparison as well).

The absence of broker fees compensates for lower profits thus Forex is a very viable solution if you are looking to cut losses and attain a reasonable profit.

As in the case of spread betting on shares, the latest trading method growing in popularity with currency exchange enthusiasts is Forex spread betting. If the idea of spread betting is familiar to you, you should be able to deduce that Forex spread betting comprises of investing your money based on predictions of which way a particular currency is going to move. This method revolves around betting on currency pairs such as USD/GBP. For example, if the value of USD/GBP is 0.6, it means that 1 USD can be exchanged for 0.6 GBP. With forex spread betting, due to the usual minor changes in currency, you put your money based on the movement in pips (the smallest unit used to express an exchange rate).

It is ideal if you're just starting out as required deposits are minimal in comparison to buying a whole lot of currency. Commonly traded pairs include GBP/USD, EUR/USD and USD/JPY.

All the benefits of forex trading as aforementioned, apply to forex spread betting as well. If you intend on investing in forex via spread betting, it is essential that you thoroughly research the area. There are several foreign exchange websites that offer virtual (realistic) markets to grasp an idea of how the foreign exchange market works which should help you in your ventures.