There are a number of brokers or spread firms through which you can trade. I'm going to give you some advice on maximizing your chances of succeeding. You will face challenges and obstacles along the way but if you persevere for long enough you may find yourself in a very positive situation. First of all, know what you are getting into. Read as much as you can about every aspect of spread betting and trading, and remain objective with regards to the many opinions you will hear on how to go about it.
If you are spread betting then you will need to find a company that offers a competitive 'spread'. Shop around. Find out what a spread is - this is very important.
For me Capital Spreads, and spread betting in general, is a good learning platform and serves a purpose and using spread betting in general has a number of benefits, the major one being low levels of capital required to start trading in the markets.
The tax thing is, for the vast majority, irrelevant as you have to make £6500 ish clear profit before CGT kicks in and even then there are ways round it like using your wife's allowance...etc.
If you trade stocks and you don't like the spread, then use Direct Access. Incidentally I've worked out the spread model Capital Spreads uses on stocks. It isn't rocket science and they aren't messing with the spread as the market develops over the course of a day to suit themselves, although I guess they must have some kind of review process in place to make sure that the overall yield they are reaping from individual stocks is in line with their overall targets and making adjustments accordingly. In running any business you should be looking periodically at the profitability of your product range. This is good business practice. If you as a spread better do not like it, go elsewhere and use an alternative platform e.g. Direct Access. It's your choice. In my experience I've never seen the trade boxes switch to 'phone trading only' (or whatever it is) on Direct Access!! This the thing I don't like about spread betting. But it doesn't really matter to me as I have a choice.
Be very sceptical about day trading systems that offer instant wealth. Trading methods that worked last year may have run out of steam in the current market.
Once a system becomes widespread enough then too many people know how it works. Lots of people start using it and any advantage is wiped out. Or the market environment might have changed. You may end up slaving away for little or no profit at all. So systems degrade over time. For instance, RSI used to be the miracle formula years ago but now the crowd have caught up. One needs to be a step ahead of the herd and RSI isn't the cutting edge that it once was.
The point about trading strategies which are not mathematically based is that if too many people start to act on them then they become self defeating because enough 'market makers' get to know where orders are as well. If you are putting orders of £30m at a certain price every day and you place the orders through 8 brokers then the 8 brokers get to know what you are doing. They see that your strategy is successful and start to do the same thing (they may tell their mates as well) then loads of copycats come in and add their orders to these levels as well This swiftly adds up and the numbers get to £150m, £200m or more at a 'known level' then this becomes a worthwhile amount for the Market Makers to hunt down.
There are plenty of different strategies (fibs pivots trends momentum...etc) but the point about them is that one mans fib point is not always the same as someone else. Pivots momentums...etc depend upon what period you are looking at. One dealer might like the 5 day moving average versus the 20 day the dealer sitting next to him might prefer 3 day vs 15 day.
Although I have reviewed a number of systems which you can use there is one system that can possibly make you financially independent. It's called 'your system'. That is right. The one you developed and did not tell anybody about. This can take a good deal of work and time to develop. There are a lot of software packages available to help you monitor market patterns, and design your own strategy. If you develop a strategy that works then keep it quiet!
In my experience one of the most consistently profitable trading technique is a method called 'skimming'. This involves placing many trades for small market movements which build your profits based on a substantial number of transactions. It is only possible for spread betters to profit from this if they are able to place bets with a tiny spread. This requires experience and a good knowledge of the markets. Make sure you are fully prepared. This is an intensive method - you didn't expect it to be easy did you?
I have one final recommendation which is very important. You may be eager to go but if you remember just this advice you will save yourself considerable amount of stress. The most important advice you will ever hear about trading is- 'only trade with money that you can afford to lose'.
'Is that all' you may ask. Talk to those who have lost the money they traded which they could not afford to lose. Beware anyone who suggests otherwise as they very probably have something to gain from your additional risk-taking. They don't care if you crash and burn, as long as they get their slice. If you are planning to win in the long term then limit your exposure to losses in the short term.
Just a little aside:
...research suggests that people feel considerably more pain after incurring a financial loss than they do pleasure after achieving an equivalent gain. In the extreme case, desperate fears about losing a lot of money induce people to take enormous risks with their money...
...Imagine that a benefactor gives $10K to everyone in a group and then offers each of them the following choice. He promises to either (i) give them an additional $5K or (ii) give them an additional $10K or $0, depending on the outcome of a coin flip.
Most people apparently choose to receive the additional $5K.
Contrast this with the choice people in a different group make when confronted with a benefactor who gives them each $20K and then offers the following choice to each of them. He will either (i) take from them $5K or (ii) take from them $10K or $0 depending on the flip of a coin.
In this case, in an attempt to avoid a certain reduction, most people choose to flip the coin.
The choices offered to the two groups are in fact the same; a sure $15K or a coin flip to determine whether they'll receive $10K or $20K.
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