The Power Of Simplicity In Spread Betting
The newbie who are just beginning financial spread betting are inclined to make their trading methods too complicated, because they analyze every piece of economic data and also by not having a particular trading approach. It is usual for traders to jump from one indicator to the next; especially after having many losses. Traders tend to give up their system as soon as it shows a few successive losses. The problem is not in a trading method at all. It deals with lack of discipline, control or risk and over trading.
If you want to become a successful trader, it is vital to choose a simple approach to all of your spread betting related activities. You should have a simple money management scheme that will allow you to control your risk on every spread bet. As opposed to popular belief money management is not complicated. You just need to determine your trading method and clarify how many trades you can win. This will be your financial spread betting system expectancy. Many systems will not have expectancy bigger than 70%. It means that it would be possible to lose three trades out of every ten you take. So, you can see even if your expectancy is 70% you will not risk 5% per trade because not many people can emotionally manage losing 15% of their spread betting account in one week. So, you should decide on a percentage that you can afford yourself to put under risk when trading. 3% is commonly optimal. We keep this simple, it should not be too complicated.
Simplicity is when you can manage your own emotions. The secret of managing your emotions that market can evoke in you is by making a solid written plan. It is easy. Define your goal in the market, write down the rules that will help you to achieve it and then follow it. When you get off track and stop following your plan, you will begin complicating the things and stepping back from the right mindset telling you that you should trade effectively.
And the last thing, acquire a simple and suitable spread betting method. It is very important to your success in all other aspects of trading. Spread betting is mainly psychological and there is a wide range of trading methods that will win more than 50% of the time. It is true. But most people go wrong when they try to use indicators in their method and trade price change indirectly, making the things even more complicated. If you trade using price action you trade directly of what the chart recommends you. This easy and efficient method of spread betting will help you focus on maintaining your discipline in the other areas of trading psychology and money management. Trading should not be complicated, a simple and logical method combined with self-discipline is what you need for success.
