Want to spread bet? Read this before choosing a brokerage
For those that had never hear about it, in ForexSQ we want you to know about this technique. Spread betting is a way of wagering on the outcome of a particular event, where the pay-off is based on the accuracy of the wager, and differs from a simple fixed-odds betting, in the fact that the payout is not pre-defined. Usually, the main purpose of spread betting is to create an active market for both sides of a binary wager, even if the outcome of an event may appear to be biased towards one side or the other.
Spread betting is largely accepted in the UK, where every single event, including sports matches or how many seats a political party will win in a general election, or even in things such as the outcome of the Brexit referendum, or the Grexit, is open to wager. But at the same time, is illegal in countries such as the US, Japan, or Australia to mention some of the major economies that forbid this kind of trading.
When talking about financial spread betting, we are talking about speculating over the movement of a particular asset - a currency pair, commodities, stocks, indexes, etc- without actually owning the asset. The degree of assertiveness determines the size of the profit, or the loss. When it comes to forex, you are pretty much speculating on the direction in which the price of a currency pair will move. If it does, your profit will grow in relation to the advance of the pair. If it goes in the opposite direction, the larger will be your losses.
Good news is that spread betting allows you to use stop losses. You have to pay a little extra, like an insurance, to limit the amount of money you can lose if the asset goes against your belief. It varies in size but usually is a 10% of your bet. When it comes to volatile assets, some brokers allow paying a bit more for a guaranteed-stop.
ForexSQ has quite a nice review on different brokerage firms that allow spread beating, with details of the top spread betting companies that include details on spreads, platforms and minimum stakes. You can see it here.
As always when trading, there's the risk that, despite you have analyzed all and every single variable that can affect the price move of any asset, things can go wrong. Just remember the SNB lifting the peg between the CHF and the EUR and the consequences it had all over the financial world. Don't bet money you can't afford to lose.
Accept that things can go wrong and that you can get it wrong: believe it or not, 99.9% of the times you are the one to blame, and not "the market," "price makers," or your broker. Step back, objectively analyze what is the main reason behind the fail, and start over. Perseverance is the key to success.
Risk Disclosure Analyzing your financial situation, you should decide whether you should start Forex trading or not. Rates of currencies can go down or rise higher any day, any hour, any minute so you should risk only that much which you can afford to loose.
Editors’ Picks
EUR/USD deflates to fresh lows, targets 1.1600
The selling pressure on EUR/USD now gathers extra pace, prompting the pair to hit fresh multi-week lows in the 1.1625-1.1620 band on Friday. The continuation of the downward bias comes in response to further gains in the US Dollar as market participants continue to assess the mixed release of US Nonfarm Payrolls in December.
GBP/USD breaks below 1.3400, challenges the 200-day SMA
GBP/USD remains under heavy fire and retreats for the fourth consecutive day on Friday. Indeed, Cable suffers the strong performance of the Greenback, intensified post-mixed NFP, and trades at shouting distance from its critical 200-day SMA near 1.3380.
Japanese Yen weakens further; USD/JPY hits multi-week top on firmer USD ahead of US NFP
The Japanese Yen adds to its intraday losses through the first half of the European session amid the uncertainty over the timing of the next interest rate cut by the Bank of Japan and escalating China-Japan row. This, along with worries that consumption momentum could fade if inflation continues to outpace wage growth in early 2026, overshadows an unexpected rise in Japan's Household Spending data for November.
Editors’ Picks
EUR/USD: The world gyrates around the United States at the beginning of 2026 Premium
The EUR/USD pair started the new year with a soft tone, falling for a second consecutive week to settle around 1.1640, its lowest in a month. The US Dollar (USD) stands victorious across the FX board, backed by geopolitical uncertainty and pretty solid United States (US) employment data.
GBP/USD: Will Pound Sterling extend the corrective downside? Premium
The Pound Sterling (GBP) witnessed a steep correction against the US Dollar (USD), sending GBP/USD down from four-month highs of 1.3568 to test the weekly low near 1.3400.
Gold: Volatile start to 2026 as markets assess US data, geopolitics Premium
After losing more than 4% in the last week of the year, Gold (XAU/USD) gathered bullish momentum as trading conditions normalized. Although XAU/USD entered a consolidation phase following the rally seen earlier in the week, it managed to register weekly gains.
Bitcoin: Early-2026 rally falters as BTC investors await key catalyst
Bitcoin (BTC) is trading lower toward $90,000 on Friday after encountering rejection at a key resistance zone. The price pullback in BTC is supported by fading institutional demand, as spot Exchange Traded Funds (ETFs) have recorded net outflows so far this week.
US Dollar: Greenback or Greenland? Premium
Another positive week for the US Dollar (USD) saw the US Dollar Index (DXY) extend a promising start to the new trading year, managing to at least scare away the spectre of being one of the worst-performing currencies during the last year.
RECOMMENDED LESSONS
Making money in forex is easy if you know how the bankers trade!
I’m often mystified in my educational forex articles why so many traders struggle to make consistent money out of forex trading. The answer has more to do with what they don’t know than what they do know. After working in investment banks for 20 years many of which were as a Chief trader its second knowledge how to extract cash out of the market.
5 Forex News Events You Need To Know
In the fast moving world of currency markets where huge moves can seemingly come from nowhere, it is extremely important for new traders to learn about the various economic indicators and forex news events and releases that shape the markets. Indeed, quickly getting a handle on which data to look out for, what it means, and how to trade it can see new traders quickly become far more profitable and sets up the road to long term success.
Top 10 Chart Patterns Every Trader Should Know
Chart patterns are one of the most effective trading tools for a trader. They are pure price-action, and form on the basis of underlying buying and selling pressure. Chart patterns have a proven track-record, and traders use them to identify continuation or reversal signals, to open positions and identify price targets.
7 Ways to Avoid Forex Scams
The forex industry is recently seeing more and more scams. Here are 7 ways to avoid losing your money in such scams: Forex scams are becoming frequent. Michael Greenberg reports on luxurious expenses, including a submarine bought from the money taken from forex traders. Here’s another report of a forex fraud. So, how can we avoid falling in such forex scams?
What Are the 10 Fatal Mistakes Traders Make
Trading is exciting. Trading is hard. Trading is extremely hard. Some say that it takes more than 10,000 hours to master. Others believe that trading is the way to quick riches. They might be both wrong. What is important to know that no matter how experienced you are, mistakes will be part of the trading process.
The challenge: Timing the market and trader psychology
Successful trading often comes down to timing – entering and exiting trades at the right moments. Yet timing the market is notoriously difficult, largely because human psychology can derail even the best plans. Two powerful emotions in particular – fear and greed – tend to drive trading decisions off course.