First time traders tend to think that they will get rich overnight and that it is relatively easy to become a spread better. That however is not the case and it is a long term process that requires a lot of dedication and risk taking. It is very easy to make free bets on any online sports betting website, which, given you have enough luck and skill, will make you richer overnight. Getting rich overnight will definitely not happen when spread betting as this takes time and if you are not prepared to take an odd loss here or there, spread betting is not for you. Learning the tricks and trades of the financial market may take years to fully comprehend and even then, unexpected rises and falls can make you fall nose first into the dirt.
Having the opportunity to talk to a few spread betters, here is a list of mistakes you should avoid when spread betting.
Moving your Stop-Loss
If you buy trade in a share that is valued at a certain amount, you would want that amount to increase to a certain amount in order to make a profit. Having said that, you need to know what the correct stop-loss for that trade is and if it reaches an amount below that stop-trade, you will be working at a loss. If you determine the stop-loss of a trade and it reaches that amount, it is better to cut your losses and move on rather than hanging on to something that may even fall lower that the stop-loss mark.
Don’t jump the gun
When you see that a trade is running below the stop-loss mark, you need to ensure it will go up again. I it does not go up, you need to step away from the share and move on. While this is almost impossible to determine, you need to keep by your decisions and do not deviate from it. On the other hand, when you see that your share trade is making a profit, do not jump the gun and instantly take your profit to the bank. Analysing each individual situation before making a final choice will enable you to make the right move with a clear mind. Remember not to wait too long as the profit can very easily turn into a loss.
Too many markets
There are many different markets to trade as a glance TradingEconomics will show. Trading on a number of different markets may sound idyllic but in reality you will not have effective control over every aspect of the trade in those markets. While having trade shares in a specific market, you need to know exactly what is going on in the market shares, what your point of action will be if things go south as well as have intimate knowledge of the assets you are trading.
When you listen to colleagues or friends talking about a successful market trade they recently had, there is no guarantee that you will also have a successful trade in that market. You need to trade shares the way you feel comfortable with doing and with the assets you understand best.