Perhaps you’ve already started spread betting, and are wondering how to improve your performance, or perhaps you’re just considering starting out – in either case there are some top secrets to winning at spread betting, and if you follow these you will find that your account will appreciate you!
“Winning spread traders are normally those who plan their trades beforehand and follow that plan. By contrast, losing traders generally trade without a specific strategy and enter positions on impulse.”
Here’s the secrets to making money financial spread betting:
- You don’t need to be fully invested all the time. So many traders believe that their money is not working for them if it is not in the market. The fact is that the market is not always appropriate for trading. When you’re spread betting, you have a choice of many different markets, but unless you’re familiar with each of them it may not work out for you to chase the one that appears to be profitable.
- Accept that not all your spread bets are going to be winners, and make sure that you quit the losers as soon as it’s clear they are not going to succeed. You can win 50% or less of the time and still profit, as long as your winners are bigger than your losers.
- Always use stops. No exceptions. When you are trading a derivative, which means using leverage, you are very likely to fail to manage the risk unless you set a stop loss is on each trade.
- If you want to win at spread betting, make sure you treat it as a business and do not do it for the thrill or excitement. Get your excitement somewhere else, if you need to, unless you can afford to stand the losses.
- Make sure that you understand the market conditions. You reduce your risk when you trade with the trend, which means if the market is bullish, most of your trades should be long. If the overall market is bearish, then short trades should predominate.
- When you enter a spread bet you must predetermine at what point you know you were wrong and must exit the trade. Once you are in the trade, it is too difficult to decide because emotions may overrule common sense.
- Whenever you consider a spread bet, you should work out the maximum loss you may suffer, given your predetermined losing exit point. This should only be 1% or 2% of your account. A top American trader compared to people who risk as much as 3% of their account on a trade to “gunslingers”.
- Similarly, before you enter a spread bet you should have a good idea of what you expect to the minimum move to be. You shouldn’t even consider placing the spread bet unless it’s at least twice the maximum loss, and some people work with even higher ratios.
- Be prepared to exit the trade if it is stalled. Set a time limit to stay in the bet. You don’t have to wait until the price drops to your stop loss, or rises to your profit target, as sometimes the trade will go nowhere. It’s failed to perform as you expected, so it’s time to have your money available to use elsewhere.
Following this set of powerful money-making spread betting strategies based on simple, everyday, wealth-building decisions will help you improve your chances of success and who knows you might even become a ‘Secret Millionaire‘.