Understand why most spread traders lose money

The information contained herein is like gold dust for those who want to learn to spread bet properly and make some serious money from it, because it explains the reason why most spread traders do lose money.

Spread trading sounds exciting because you can make money in a rising or a falling market, not something the average investment can offer. All you have to do is predict the way the price will move, right?  

Wrong. Calling the way the price will move is just guesswork and sooner or later your luck will run out because guesswork does not make significant amounts of money on a consistent basis, which is ultimately what you want.

The majority of novice and continuing spread traders lose money because they look at the price and not the value.

You must look at the valuation. If your analysis of a stock or a market suggests that it is being undervalued or overvalued, then you ought to buy it or sell it appropriately.  If the analysis is right then sooner or later that valuation will correct itself. The world we live in is not efficient and professional spread traders make real money by spotting the inconsistencies. The laws of supply and demand, of buyers and sellers will ensure the market does correct itself and you just need to have a spread trade in place to cash in on the movement.