LONDON, October 12, 2010 /PRNewswire-FirstCall/ -- Greed
In financial spread betting (http://www.cityindex.co.uk/spread-betting/), greed can be both a strength and a weakness. Granted, letting profitable spread betting positions run can sometimes result in even bigger profits. However, not cutting your losses early can turn what would have been a relatively small spread betting loss into a much larger spread betting loss. Whilst it is far from impossible for markets to experience a dramatic turnaround, it is quite possible that this will only happen after the point at which your account can no longer afford to keep your losing spread bet open.
In order to make sure that you do not overtrade, simply set a spread betting system outlining your entry, objective and exit from your financial spread bets and stick to it. Limit orders also enable you to manage your upside spread betting potential effectively, in the same way that stop loss orders allow you to manage your spread betting downsides.
Do not carry on spread betting if or when you become frustrated at market developments. Chasing spread bet losses, especially whilst annoyed, is never a good idea and can result in mistakes you would not normally make. Simply walk away, do something else and return to your trading platform (http://www.cityindex.co.uk/trading-platform/) later with a calm and rational head.
Never try to replicate another trader's spread betting style, regardless of how successful they appear. By all means extract elements from their advice and approach, as well as from any other spread betting resources (http://www.cityindex.co.uk/learn-to-trade/) you come across, but combine them with your own instincts and experiences to form your own individual approach to financial spread betting.
At the same time, do not be afraid to ask for help. Free spread betting seminars (http://www.cityindex.co.uk/learn-to-trade/seminars.aspx), webinars and demo spread betting accounts all represent extremely useful opportunities to develop your spread betting with the help of market experts and risk-free trading platforms.
Some spread bettors simply use the markets to feed their need for excitement. If you do this, chances are that the money does not mean as much to you as the rush of the risk, which could make for ill-advised spread bets and consequently significant spread betting losses. Letting your heart rule your head in this way can prove even more costly than the spread betting markets going against you.
Learn more about financial spread betting at http://www.cityindex.co.uk/spread-betting/.
Disclaimer: Spread betting and CFD trading are leveraged products which can result in losses greater than your initial deposit. Ensure you fully understand the risks. Spread betting and CFD trading are exempt from UK stamp duty. Spread betting is also exempt from UK Capital Gains Tax. However, tax laws are subject to change and depend on individual circumstances. Please seek independent advice if necessary.
SOURCE City Index