Lots of people trade the forex markets using a traditional forex broker, however i am knowledgeable that numerous people, particularly within the united kingdom, prefer to trade using a spread betting company instead. I nearly always trade this way and it's a reasonably simple way to trade because you don't have to be worried about lots or anything like that. You merely choose your stake, ie �1 or �10 per point for example, and enter your position long or short.
Anyway in the following paragraphs I want to discuss how you can determine your risk when spread betting the forex markets, and subsequently how much you ought to be staking per point. It is extremely straight forward, however it can be slightly difficult if you are new to spread betting.
The first thing you need to do would be to figure out how your main account you're ready to risk per trade. The common advice is to risk a maximum of 2-3% per trade, and I myself rarely risk anymore than this except on unusual occasions where I am extremely confident about a particular position.
Why don't we assume that you've �5000 inside your spread betting account and you're simply ready to risk 3% per trade. Your maximum loss from this trade thus remains �150 (3% of �5000).
The next thing is to check out your stop loss with this particular set-up. If you're planning to enter a situation with a stop loss set at 50 points, then your stake could be �3 per point because 50 points @ �3 per point gives a maximum loss of �150, which is the 3% that you were prepared to risk on this trade.
Similarly if you intend placing stop-loss just 15 points away, you would then therefore be looking to enter a situation at �10 per indicate provide you with the same maximum lack of �150.
Obviously there is always the chance that you may 't be automatically closed out only at that exact stop loss because of slippage, whereby your loss might be a little more than �150. However you can hopefully see the point I am attempting to make.
In summary then, if you wish to determine your risk when spread betting, you merely see how much you are ready to lose with different percentage of your capital, and then figure out how many points away you are going to place your stop-loss. You can then exercise your stake per point fairly easily and enter your trade.