Things for all spread traders to remember

We feature many tips and pieces of advice for the beginner in spread betting but there are plenty of points that should be noted, even by those who have been spread trading for some time. It is easy to become complacent, especially when you are making good money so here are a few points for all spread traders to remember from some of the most successful and professional spread traders.

• “The price is never too high to move higher or too low to move lower”: This is often quoted in all the best books and courses on spread betting and is a common error. Too many spread traders try to call the top or bottom of a market only to find that was not really the top or bottom. If this is your tactic, you are highly like to lose money

• Learn when to cut your losses: It is sometimes difficult to admit when you are wrong and if you stick to a losing trade feeling sure it will reverse chances you will just lose more money. Even worse, sometimes people are tempted to move their stop losses away from the market. A stop loss is important to minimise your losses so don’t move it away. Vice versa, don’t worry about losing profits and cut your profits too early. Move the stop loss up to lock some in; that way you know if things reverse you still have some profit and can relax

• Money management: have a written trade plan in place deciding when you will get out. If you find a trade is going your way and you were correct, then add some more to the trade. Obviously, it may reverse so don’t add so much you could end with a huge loss, but many successful spread traders have used this policy to increase the profits on their winning trades