To win at this spread betting game, you need some essential qualities. You have now read the guide, and know a bit about financial spread betting. But if you think you do not have enough of these qualities listed below, then I strongly suggest you to abandon this idea and look for something safer. I’m not saying you need all of the qualities listed below, but it sure would help, and you must have the majority of them.
- Rule #1 – Discipline.
Definitely the number one quality. Are you a disciplined person, in general? There are hundreds of indicators of a disciplined mind. Can you get up in the morning? Are your shoes clean, your hair and teeth brushed? Are your car and house tidy? Are your personal papers (gas, bills..etc) filled in some sort of reasonable order? Do you turn out a good job of work, even when nobody is looking? Do you ever get drunk? (A very disciplined person would never get drunk!). Do you use recreational drugs? I could think of five hundred more indicators. You get the idea. It’s up to you to look at your life and make an honest assessment of your level of discipline (or lack of it).
Here is it worth noting that greed is a form of indiscipline. Discipline stops you betting more than you can afford to lose. Discipline allows you to take a break from the market to recoup your losses through conventional means (example: work). Indiscipline would make you push on, over the edge, hoping to make up your losses in one, final mega-trade.
- Rule #2 – Rationality.
I have touched on this already. You must be a rational person. That means, adhering to the fact of reality. This means, holding no superstitious or primitive beliefs and this includes religion. How can you be a scientific gambler if you believe in an all-powerful and wise supernatural ghost is watching over you and guiding your life? You cannot, so abandon one or the other (religion or gambling) now. Rationality allows you to ignore hunches, whims, wishes, and intuitions. Rationality makes you focus fully on what’s really happening in the market, and to ignore all spurious or mystical inputs. Rationality allows you to bail out and take your losses on the chin.
- Rule #3 – Sense of Humour.
You must be able, literally, to laugh at your losses, even if they are severe. This is a game. It should be fun. Nobody likes to lose, but remember you have a life to live. If your gambling is seriously affecting your life, either financially, or emotionally (black moods because you lost) then this indicates that your are not emotionally mature enough to be involved. Most people’s emotional bank account runt out long before their financial bank account.
- Rule #4 – Independence.
You must have your own ideas about things and be prepared to back them. From my horse-racing days I can tell you that there are as many tips out there as punters. 99.99% are garbage. Similarly in the stock market. Few people really know what is going to happen. The market by definition is made up of people on the one hand who believe the market will rise, and a roughly equal number of people who believe the market will fall. They can’t both be right, so there’s certainly enough duff information out there to last you a lifetime!
I hope you will forgive me for being hard on your during this section. I have my reasons. You see, I have seen a lot of good people go down through gambling (and drink, and drugs as it happens, and they’re all the same thing, bottom-line). I don’t want this to happen to you. You should make a straight and honest assessment of yourself and this business. Is it for you? If not, then make sure to cut your losses early! If you think you can handle this game, then welcome abroad!
I have all the above qualities – and more besides. This is why I am successful. I also have a simple three-word strategy. I am comfortable taking contrary positions at times.
This means that I bet against the common herd. I also pick my times carefully to do this. Other traders will swear that the only sensible strategy is to go WITH the crowd.
When the herd are all baying that the market is still going up, up, up, then that’s the time I ‘short’ (sell) the market.
When all is doom and glood and your taxi-driver is saying that ‘everyone knows’ shares will never rise again, and that the stock market is finished, that’s the time I buy.
Put another way, I always buy cheap and sell dear. I never buy expensive, even if the price could rise a little more. The risk is just too great.
Trading like this, I maximise my upside potential, and minimise my downside losses. Over a period of time, statistically you will win. Remember the weighted coin which comes up 51 times HEADS and 49 times TAILS? This is the equivalent.