If you’ve just made your first few steps into the financial spread betting territory, you’ve probably been spurred on by the numerous success stories of traders who’ve made a fortune for their efforts. While the stories are by all accounts true, don’t be deceived into accepting the notion that it’s all glamour and affluence in the house of the spread bettor. If you are lucky enough to sit any one of them down for a good talk on the industry, one prize you are sure to take home is the realisation that it will take you more than just opening an account in such a trading platform as CMC Markets and beginning your business.
All traders desire to reap tremendous gains from their investment in the spread betting industry. However, most of them forget that it is not an overnight affair. It takes time to create and develop the characteristics and qualities required for successful trading.
There is no single trader—successful or not—who has gone out of the industry unscathed. In fact, winning and losing is part of the definition of trading. How much you gain or lose makes all the difference. Therefore, don’t get into the business without a winning and losing strategy.
Get into the Right Mindset
One of the main reasons for many failures in the trading industry is inability of the trader to master emotions. Spread betting is a high-adrenaline undertaking and your feelings may threaten to turn a promising career into a miserable attempt. Making decisions while under emotional stress often result to irrational action whose end-result, in turn, is usually loss.
Trade Small Stakes
Whether a newcomer or a veteran, every trader makes a wrong move once in a while. However, the survivors of trading mistakes are seldom big stake traders. Back to emotional control, there is usually a problem when a new trader winson a small stake and instead of feeling satisfied and celebrating it, there are all the regrets about not making a bigger investment. Therefore, he or she gives it all in the next trade and when a loss happens, it is so devastating that there is no rising again and that is the end of a promising career.
Trade with the Trend
You can always use one or two of the various ways of anticipating the moves of the market. Nevertheless, they are just suppositions which are not exactly infallible. Whatever move is expected, there is always a fair chance of either winning or losing. As a new trader, therefore, go with the trend. This means that if the price of security is going down or rising, your position should be that it won’t change direction.
Know When to Exit and Do It
There are two ways of exiting a spread bet. When you are winning, you may want to close the bet in order to take home the highest gains. On the other hand, you may want to close a failing bet to stop further loss.
One of the most efficient ways of minimising losses is the use of stop-loss tools which must be obeyed when they give their signal for the exit. However, it is not always easy for a bettor to give up a losing trade and bring the position to a close. It is, nevertheless, a mark of maturity in the industry and a quality of a successful trader.
Like in all careers, the journey towards becoming a successful spread bettor must begin from somewhere. There are recommendations to start with paper trading. However, remember that you will still have to get to the real game which is much different than just practicing, and you may make huge losses once you enter the market as a result of overconfidence and excitement in the quest to cart home a quick fortune.
One of the best ways of joining the spread betting industry is through a broker who will let you trade small stakes. This way, you learn with a real profit-and-loss-making situation. If you lose, you won’t take such a painful hit. If you gain, don’t be disappointed by the small profits and rush for the big stakes. You can always trade big after you’ve learned your way around the industry and you are ready to take a fall in case of losses.Keep in mind that although spread betting mostly involves the financial world, there are many other areas you can enter the industry from. One such area is baseball betting—another very lucrative trading venture.