If you read this blog on a regular or semi-regular basis you will be well aware that my own spread betting has slowed down a lot recently. It’s mainly while I re-asses my own trading activity to determine where I have been going wrong and what I need to work on.
As I mentioned in my last post I’m reading Alexander Elders book, come into my trading room and I just can’t get enough of it. It’s full of useful information and ideas for trading strategies. The ideas that Dr Elder presents make so much sense. Now I can’t write about them too much for obvious copyright reasons but if you haven’t already read the book and are looking for a good read about trading then I recommend it already and I’m not even half way through.
In there he’s constantly referring to beginners mistakes. Which is what I am a spread betting beginner. The book shares a common theme with SBB [Spread Betting Beginner] as I aim to serve up all my mistakes for public viewing so that other beginners can avoid making the same ones. Dr Elder does a similar thing in his book and highlights what professionals do that beginners don’t and vice versa. Now I said I cannot offer you tips from the book as you will have to read these for yourself but what I can do is summarise some of the things I have learned so far on my own spread betting journey. So here are my top 5 tips for new spread bettors.
- Take it slow and steady.
There is no such thing as a missed opportunity in trading. You may think you have missed out on a trade but the reality is there will be more along tomorrow.
- Start small and build.
No new trader starts out in a big way. If you start with £100,000 and your completely new to trading then you could lose a huge sum(if not all of it) and wonder what went wrong.
- Manage risk while you learn.
Keeping my risk low is the only reason I’m still able to trade today. It’s tough to keep a strict risk tolerance but with fractional bet sizes from the likes of CityIndex.co.uk it can make life a little easier.
- Get your thinking cap on.
Be prepared to embark on an epic learning journey. Most newbies think spread betting or any form of trading is an easy way to riches and nothing could be further from the truth. You can be forgiven for thinking it as I thought the same when I started spread betting however, three years down the line I’m still learning.
- Keep track of your trades.
Keeping a good trading diary and logging every trade you make, good or bad, can help you asses your performance and make any necessary adjustments to your trading habits. I have been doing this for a while now and it’s good to look back on my past performance.
So there you have my top 5 tips. Most of these require you to work on yourself which from my point of view is probably one of the hardest parts of trading to master. Keeping your emotions in check is tough at times and you will be tested in ways that you cannot imagine until you’ve experienced them. Still as the saying goes “Whatever doesn’t kill us only makes us stronger” and I believe that I am a stronger trader for my past experiences in spread betting.
Obviously these tips are aimed at beginners but they are things that any more experienced spread bettors out there must also follow if they don’t already.
“Hey Harry how is your trading going?” I hear you ask. Well as you know I’ve re-entered a learning phase and that is where I am up to at the moment. I still have 4 open positions and each are In various stages of profit. None of them have violated my super trend strategy so I’m leaving them open until I get a signal to close them. So to summarise I have not been looking for new trades while I am still educating myself. I aim to take some of Dr. Elders ideas and test them out for myself before I start to put them into practice, it shouldn’t be too much longer and I’ll be back looking for trades again.