BetOnMarkets offers an excellent way to bet on the financial markets with limited risks and all profits are also tax free under UK law (subject to change).

In order to profit, you need to be disciplined with your capital and also follow a good trading strategy. Opinions differ but the best strategies are the ones which you back-test and refine yourself.

Money Management

In order to last as a trader and to increase your trading capital it is very important that you do not overtrade nor risk too much on any one trade. Good money management is a must!

First of all you need to decide how much you will fund your account with. This money should not be borrowed and preferably should be from your savings i.e. money you can afford to lose but it will hurt to lose it.

BetOnMarkets allows you to bet as little as £5 and sometimes even less. This means that you could operate an account as small as £500 and risk only 1% per trade.

This sounds like a small amount but bear in mind that BetOnMarkets provides 7 indices, 25 US Stocks, 11 UK Shares and 14 currency pairs which you can trade. So that's a total of more than 50 financial markets you can choose from. This means that you will probably be able to find a few good trades per week.

Plus, by keeping your stakes small, you will stay in the game even if you make a few mistakes along the way.

A sensible way to setup your account would be as follows (this is just a suggestion, you may be happier risking more or less per trade):

And so on....

If you have a £1000 account and you are risking £10 (1%) per trade then you would have to be constantly wrong about the market over 100 trades to lose your entire pot. However, if you decided to risk £100 (10%) per trade, it is more likely that you will lose all of your capital as a short losing streak will wipe you out.

The following table shows the gains you would need to make depending on how much of a starting bank of £1000 you lose:

Balance	Amount lost	% Gain Required to Return to £1000
£950	5% (£50)	5.26%
£800	20% (£200)	25%
£500	50% (£500)	100%
£250	75% (£750)	300%

Please note: If you take a longer term view on a bet then your odds may be very large.

e.g. I wish to win £15 if at any time within the next 90 days the Dow Jones Index trades at or through 11080

Result:

So, because you have taken a very long term position, you total risk is less than £5 but the return if you are correct is three times your stake. Of course, if the market moves quickly upwards, you can sell your bet back for more than your stake and make a quick profit.

To Do:

Decide how much your can safely afford to lose and put this money to one side as your "play" money. Then you need to decide your maximum risk per trade. Stick to a small risk per trade and you will not be wiped out with a few losing bets. As you trading capital increases, your risk per trade will also increase.

i.e. You start with £1000 and risk £20 (2%) per trade. When you manage to increase your trading capital to £1500 you can then reassess your trading plan and increase your stake to £30 etc.