Risky Business

As with all gambles there are risks and it wouldn’t be fair to imply that when participating in spread betting that you are on to a sure thing, there are some pitfalls too.

Over confidence is one of many mistakes made. If you become over confident in a bet you may lose the power to think realistically and rationally. This in turn may cause you to bet more than you should and incur financial harm to yourself. There may be times when you find yourself emotional while betting, therefore you must remember to bet with reason, not with an urge to have bets on teams or markets you favour, instead concentrate on what the prices and stats say.

Another common mistake is betting against the trend. Many amateur traders look at some charts, come to a decision that this is as low as it can go, and place a trade going long, the chart can always go lower therefore you are placing a bet against the trend. Always have a reason other than spontaneity. Intuition is just a gut feeling; it has no influence on trading the world markets. Try to stick to a staking system. A staking system informs you how much you should wager on each event and provides you with a maximum loss for each set period of time. If you fail to stick to this it could result in you losing money.

Impatience will also get you nowhere; the perfect bet does not come up every day or week. There will be times when you have to exercise some fortitude and wait for a chance to present itself.

Another one to watch out for is overtrading. Spread betting can be addictive and it can get to a point where people just have to/need to trade every day on something or anything. If you’re trying to trade more than about 1-2 times a week you might need to ask yourself why.