With hindsight, I wish I’d been more patient. It would have saved me a great deal of heartache, not to mention the money. Here a few of my own tips that I wish I had adhered to all those years ago.
1. Try Paper Trading – As I’ve said, I couldn’t wait to launch my financial spread trading career and get on the phone to place my trades (back then you place deals on the various company’s internet platforms). I wish I had placed a few ‘make believe’ trades i.e. paper trading and watched their progress. Today, it’s even easier to do this as many companies allow you to open a demo account with ‘make believe’ money.
2. Start Small – When you have gained some confidence from trading on paper, begin by trading the minimum bet size. Most financial spread trading companies will allow to place trades for as little as £1/$1 a pip/point. It does not matter if you only make a small amount, the important factor is that you will be gaining experience and learning to read the markets correctly.
3. Don’t Bet The Rent Money – As harsh as this may sound, you really should only be trading money you can afford to lose. If you are trading with money that you need for other things you are certain to fail. You simply will not be able to make sound decisions if you are using money you are terrified of losing.
4. Cut Your Losses Short – Nobody likes to admit they are wrong! This fact makes cutting your loses one of the most difficult things to do when financial spread trading because it takes a huge amount of discipline. But unless you learn this golden rule you are not going to survive in the world of financial spread trading. New traders, in particular, often find admitting that they are wrong an almost impossible task and simply refuse to close losing bets leading to even greater loses. Cutting your loses short is an essential part of your money management. Even if you are correct on less than half of your trades, as long as you cut your loses short and let your profits run, you can still make money. Having three or four winning bets out of ten can make you a winner if you keep your discipline.
5. Let Your Profits Run – It is important to let a profitable position run and not to close your bet too early. Sometimes it may be tempting to close a position just for the sake of taking a profit. Resist this urge. Ask yourself why you want to close the bet? You may be throwing away even more profit by closing your bet too soon.
6. Don’t Get In The Way Of Trends (Trains) – When a market is moving in a major trend, think of it as a speeding train – and don’t get in the way. If you do, you are likely to get hurt. A mistake often made by those new to financial spread trading is to buy or be long in a down trend or sell short in an up trend.
7. Don’t Listen To What Other People Tell You – Today there is just so much information out there – on the internet, on the TV, in newspapers and magazine. In my opinion, it’s best to stick to you trading rules and ignore what others are telling you.
Financial Spread Trading is a huge business and can be very lucrative if you get the right training and apply that knowledge correctly.
My name is John Eagle and I live in the UK. I first became interested in financial spread betting in the late 1980′s when I saw the original Wall Street movie. You know the one…where Michael Douglas plays Gordon Gekko who tells us all that ‘Greed is Good’.
Anyway on a more serious note, since then I have read dozens of books about trading and attended numerous seminars and courses and now trade myself.
Please take a look at http://financial-spread-trading.blogspot.com/ for more information
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