The 5 tips to maximise your profits using spreadbets
Don’t risk too much: You’re unlikely to call every trade correctly. With the aim being to stay in the game for as long as possible ensure you retain enough in the pot to allow you trade through the tough times. Scale up your deal sizes if profitable, but down if not.
Run profits, not losses: Most are guilty of taking profits too quickly but closing losses too slowly. If a profitable trade wants to become even more profitable, let it be. If a trade is going wrong, why watch it get worse? Recovering losses is even harder work. Use stops wherever you can to keep losses under control and protect existing profits.
Markets go down as well as up: Don’t limit yourself to buying. Calling the bottom can be akin to catching a falling knife. Don’t rule out shorting. You can also profit when markets are falling. Respect the trend. Going with the flow can be a lot easier.
Take stock: Review your positions regularly. Is your reason for being in a trade still valid? If not, then why stay in it? Be disciplined. Don’t let your heart rule your head. You are risking money – your money. Keeping track of your errors also helps you avoid doing the same again.
Trade with conviction: Don’t trade for the sake of it. If worthwhile opportunities (on which to risk your money) can’t be identified in your favored sector, you may be best looking at another sector/asset class. Sitting on your hands or choosing not to participate in the market is also a valid trading decision.
Adhering to these simple points can help prolong your trading lifetime, giving you the opportunity to make it both a profitable and ultimately enjoyable one.