1.Don’t complicate things
Use a simple trading plan. Stick to markets you are familiar with and are comfortable trading in. Make sure you know almost everything there is to know about those markets from their trading hours, to the margin requirements and factors that influence their price.
2.Be up to speed with the latest news
If it is a stock, you should be aware of things like when the company is about to announce a trading update or even when it is about to go ex-dividend. For forex pairs and indices, you should always be up to speed with important macroeconomic data news.
3.Study the markets
If you watch and study a market for several days (or even months) you will gradually understand how it tends to move and how it trades. So whether you use fundamental or technical analysis, the longer you study a particular segment of the market, the more you can spot its idiosyncratic pattern. If you are looking at commodity markets, then make sure you’re literally an expert and can easily write a whole thesis paper on it.
4.Choose your trading hours wisely
Unless you are fully confident in your strategy, avoid trading during the first 30 minutes after a market opens. Most importantly, be on the lookout for the time the USA market opens (that is during the mid-afternoon in the UK). Trading during such periods of volatility requires extra monitoring and a simple mistake can do serious harm to your trading account.
5.Always use stop losses
A stop loss feature is designed to do exactly what you expect it to, it cuts your losses when the bet goes completely against your analysis leading to unacceptable losses. Wise traders know that stop losses are an integral part of the game.
6.Do not fight the trend
No matter the strategy you use, be very careful when trading against an obvious trend. For instance, it would be unwise to go short while the market is still in a basic upward trend. Brush up on your grasp of technical analysis to avoid common errors of judgment.
7.Don’t be overconfident
Most people make the mistake of thinking that they “know it all” and that they have unlocked the secret to success. At this time they start to trade without conducting enough research. Unknowingly they start taking on more risk – and this is when they get their fingers burned. If you want to revamp your spread betting, go steady with every trade. Keep a healthy margin and ensure that each bet you place has a decent risk-reward ratio.
8.Find the right spread betting company
Find a company that offers a range of different accounts tailored to different types of investors. Two things that really matter are :- Are they a reputable company? How long have they been in the market? CMC Markets for instance has been in operation for 22 years.
9.Use one strategy at a time
Whether you choose news trading, breakout trading, range trading, trend following or reversal trading; always keep in mind that these strategies should not be combined for the same trade. Normally, the logic for each strategy is different and mixing them up could lead to conflicts.
10.Read, read, read
The world’s best spread betting gurus read a lot. But is every book going to be great? Of course NO. Check out the books that are relevant to your trading strategy. If you are using technical analysis, well there are plenty of people who have done that as well and they have written lots of books on the subject. The same applies to other strategies as well.
11.Stake sizing wisely
Avoid choosing large stakes because a loss would possibly be too big for your account to handle. On the other hand, avoid staking too small as the gains may not reflect the return expected for the level of capital. Ideally, you should keep your stake size between 0.02 and 0.06 percent of trading capital.
Don’t let your emotions rule the day. Create a trading schedule and stick to it. There will always be other trades opening on other trading days. There’s no rush.
Remember, so much of spread betting is psychological, making self discipline a great virtue for an investor. But self-discipline alone may not be enough to get your profit margin growing. Brush up your strategy, learn new tactics, be open-minded and most importantly adopt a decent risk-reward ration in all your investments.