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Some basic spread betting tips should be followed by anybody indulging in the practice.

You should record your trades: the date, the stake, the buy and sell prices, the reason for trading, what you will do if the market moves against you, why you closed a bet and why you didn't close when you were losing. If you cannot state why you placed a bet, then you are gambling and not trading. This record will show you how markets move – which is often complex – and how one affects another. If you keep having large losses, it will show you where you have been going wrong.

You are not a hardbitten detective who relies on hunches. Bet with your head, not your heart. If you like to play poker, bet on sports and dream of winning the lottery, financial spread betting is probably not for you.

The most obvious tip is to use a trading demo account. This will give you thousands of pounds of credit to test your skills and get used to the software.

You should trade in markets you know. Beginners should not bet on indices such as the FTSE 100: predicting the price of shares in one company is hard enough, never mind a hundred. You should not open positions in too many markets because you will not have time to research them.

You should beware of tips. Sometimes, these are put about by people with something to gain from a market movement, as the City Slickers of the Daily Mirror did. Even if someone posting a tip does not have a stake in the matter discussed, they might be plain wrong.

The most important tip is certainly that you should not spread bet with money you cannot afford to lose.