I thought I’d write a little about Spread Betting Psychology today. I personally believe that psychology is probably the most important factor of all in spread betting. Think about it, if you feel angry or upset do you think you will be thinking clearly when it comes to making trades, probably not right. I mean if you’ve just had a row with the misses(or hubby for the ladies) the last thing you want to be doing it trying to concentrate and stay focused enough to make sensible trading decisions. I know when I’ve had a row I sometimes just want to head to the gym to work out the frustration and tension.
So what can we do to avoid making rash psychological decisions in our spread betting? Well I suggest stop thinking about it. Get a strategy that works for you and your are comfortable with and let that dictate your trading decisions to you, not the other way round. Let’s look at an example of how thinking too much can ruin your chances and your bank account. Take my Barclays position for example. I closed it out a few weeks ago at 264 because I thought there was a potential support zone at 260. I entered via my trading strategy, did everything else according to my trading strategy and then I cut the trade short because of what I thought might happen. Guess what the support at 260 never happened and the price has continued to fall. It’s now down around 238. That’s 26 additional points I’ve missed out on and at £3 per point that’s an extra £78 paper profit that I’ve missed because I injected my own thoughts and feelings into my trading. Although I exited at a profit you can see I could’ve potentially have more if I’d stuck to the strategy.
So to summarise don’t think too much about your spread bets. Don’t look at the chart and think this might happen, that might happen, the other might happen. Get your trading strategy sorted and stick too it. Take control of your spread betting psychology before it takes control of you.
On a side note all my spread bets are ticking over. Misys is consolidating, hopefully before another big move upwards. I’m actually thinking about pyramiding into the position again. I haven’t decided on that one yet so I’ll keep you posted as always.
Have a great weekend everyone and I’ll see you all back here on Monday.
Until next time,
“May the markets be with you!”
Harry,
The Spread Betting Beginner
