How Often Should I Trade

This depends on the following criteria: –

What are the markets doing? If there are no recognised opportunities then don’t trade at all. DO NOT TRADE JUST FOR SOMETHING TO DO!

The amount of capital you have at your disposal. If you have a spreadbetting account of £75,000 you can obviously trade more markets, and trade more often, than somebody who only has £3,000.

Your experience in trading. If you are new to this business you should take it slowly, avoid the volatile markets such as the Dow and focus on building up your capital. Do not dip in and out of any market trusting only to luck or instinct. This is a recipe for getting wiped out. As a newcomer it will take 12 months from when you start to get a real feel as to what this business is all about, and to learn if it really is for you or not.

Here is a rough guide as to how many markets or positions you should be looking at depending on the size of your account.

Below £5,000…maximum of 2 at any one time and avoid volatile index markets, and ideally keep bet sizes to 0.05% of your ‘pot’.

£5,000 – £10k…maximum of 5 markets or positions at any one time.

£10k – £15k… maximum of 7 markets/positions at any one time.

£15k – £30k… maximum of 12 markets/positions. Once you have built up to over £30,000 you will have enough experience and capital to tackle most markets, and you probably won’t make the mistake of over-trading or stretching yourself too thin.

Make yourself thoroughly familiar with the Deposit Factor or NTR (notional trading requirement) of the markets you are interested in, and calculate what is needed to open a position with the spreadbetting company you are using. You will also need to know what the minimum bet size is and what exactly does a one-point move mean.

For example, the NTR on a futures bet on the FTSE 100 Index is 300 with IG Index. As the minimum bet size is £2 for this market you would need at least £600 just to open the bet. In reality you would want at least £1,500 in your account to open a sensible bet and avoid getting early margin calls if the market moves against you temporarily.

Note: You can’t buy everything  – make sure to stick that in your mind.  Try practising spotting a good opportunity when you  don’t have funds available and watching exactly what it does and how it reacts. That way you should become better at spotting opportunities, whereas when I first started I would try and scrape together funds to buy in (even if it was just £300).  I soon learned this was stupid. The other thing I have learned is not to panic if you think you are missing an opportunity as there is usually another one just around the corner.

Hold On There!

Why is it that traders don’t think they’re working if they are not in a position all the time? Some people spend time frenetically searching for the next best, or perhaps it should be least bad, trade that they can enter. But if the market isn’t right for you or for your system, then it’s foolishness to put your money in a place where you could lose it, rather than keeping the cash in your account.

What many people need to do is slow down and coolly evaluate if a trade is worthwhile. It’s essential that you expect a good risk/return ratio for every trade that you make, and if the returns aren’t there, you shouldn’t be in the market. Remember that you do not have to be right all the time, but when you are right you should be aiming to profit more than your loss when you’re wrong.

Where Are You?

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