While there remains some debate concerning daily forex trading volumes and the way in which they are measured, it’s hard to deny to the popularity of the foreign-exchange in the digital age. In fact, most estimates indicate that $5.3 trillion is traded on the forex market every day, with $220 billion invested every hour across the globe.

The lucrative and popular nature of this popular owes much to its natural characteristics, of course, such as its use of currency as a derivative asset and high level of liquidity (which enables high-frequency trading without impacting directly on each pairings starting price).

Make no mistake; however, forex trading has also been popularised by the rise of flexible trading vehicles like spread betting. This methodology has made the forex market more accessible to a wider range of traders, while also increasing the number of ways in which investors can pursue returns.

What is Spread Betting, and how Does it Work?

As its name suggests, spread betting is a speculative method of trading that usually encourages investors to back one of two potential outcomes.

In the case of forex trading, the spread betting method can allow traders to speculate about the rise or fall of a chosen currency pairing, simplifying the marketplace and enabling investors to profit regardless of the prevailing market conditions or how the underlying asset performs.

The returns available through spread betting are marginal, with money won or lost according to the margin by which the value of a particular outcome varies to the values quoted by your choice of online broker.

As spread betting also enables investors to execute a high volume of orders within a short space of time, it has become increasingly important to day traders and currency speculators who are looking to leverage short-term price movements.

The Technology Behind Spread Betting – How Does it Work?

Spread betting is a relatively new and progressive trading vehicle and one that relies heavily on contemporary trading platforms. In fact, today’s online and mobile trading platforms are central to effective spread betting, as without this it would simply be impossible to execute short-term orders or react to sudden market shifts.

In simple terms, the placement of successful spread bets requires you to execute orders in real-time. This enables you to apply the analysis of market conditions immediately, enabling you to capitalize on a trend or macroeconomic development that you believe will have a direct impact on price. In volatile markets such as forex, you may only have a restricted window in which to act on influential trends and profit through spread betting, so live order placement is key.

With access to a virtual (or mobile) trading platform and account, you execute real-time orders according to your underlying strategy. Similarly, the high levels of automation associated with online trading platform allow you to set clearly-defined rules for future trade, meaning that you can commission a high volume of spread betting orders when you pre-determined items of criteria are met.

Beyond this, today’s trading platforms and apps also offer access to a large and diverse range of analytical tools, each of which can help you to identify relevant trends and leverage these through the process of spread betting. The real-time information that you harvest can also be displayed through interactive graphs that allow for greater and more in-depth understanding, which may prove crucial in the heat of the changeable forex market.

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