| When you have been trading futures, options, stocks | | | | £100 on 8 trades and you then make |
| and commodities for over 20 years, it can be easy | | | | £500 on two trades, you are in profit. |
| to forget what it was like starting out. In this article I | | | | However sure you are that the market will crash or |
| will share with you some of my secrets that I wish I | | | | XYZ is going to soar, make your first trade a small |
| had known when I started trading. | | | | one, and then, if you are correct, add more to that |
| Much of what you read about Financial Spread | | | | trade. Pyramiding a successful trade is the key to |
| Betting or Financial Spread Trading, as I prefer to call | | | | making large returns. Never add to a losing trade! |
| it, is out of date, based on text book theories and | | | | 6. Cut losses and let winners run |
| written by those that lack true understanding of the | | | | Everyone tells you this, but few can do it. Trading |
| flexibility of this financial product and do not practice | | | | comes down to psychology and everyone wants to |
| what they preach. | | | | win and no one likes to be wrong or be classed as a |
| I have traded millions of pounds of stocks and | | | | loser. Most unsuccessful traders take profits quickly, |
| financial spread bets with most of the leading spread | | | | yet they will let losing trades run and run as they |
| betting firms, mainly IG Index and Cantor Index, and | | | | hope things will get better. What I suggest is that |
| I still trade actively today, so I do walk the talk. In | | | | you have a mechanical approach to exits and entries. |
| the last few years I have also been using fixed odds | | | | That is, you have a cut out point set on opening a |
| options and covered warrants. | | | | trade. Financial Bookmakers offer a guaranteed stop |
| Here are my tips to help you on your way to trading | | | | loss on most products. This means that you can |
| success: | | | | place a bet knowing that the most you can lose is |
| 1. You can make money in all market conditions | | | | known, say £200, yet your profit could be |
| While many areas of the media report the grim | | | | unlimited. Another good tip is to trail stops, which |
| headlines, what they forget to tell you is that | | | | means you lock in some profits yet keep the trade |
| opportunities to make money as a smart trader are | | | | running. Once a trade moves into profit, you could |
| all around you. Today thanks to spread trading you | | | | move the stop loss to you entry point; this means |
| too can profit from markets, shares, currencies and | | | | that the worse case scenario is a break-even trade. |
| commodities to go down (Short Sell), to go up (Long | | | | Many class spread trading "as risky or for gamblers". |
| Buy) and to even trade sideways (Barrier Range), | | | | This is totally untrue as in fact with a guaranteed |
| where you would bet for a market to stay in a | | | | stop loss your risk is totally known ahead of time |
| trading range say FTSE to stay within a range of | | | | unlike buying shares with a stockbroker. Another |
| 5,800 to 6,100 for the next 20 days. This can be | | | | point is that most new traders spend too much time |
| done via a bookmaker such as betonmarkets.net | | | | planning when to get in and buy, when in fact they |
| Remember, shares and markets fall faster than they | | | | should spend much more time on the exit strategy |
| rise so you can make much more money in a failing | | | | and how much they are going to trade. |
| market than a rising one. Also the financial markets | | | | 7. Treat Financial Spread Trading as a business |
| are like a seesaw, if money flows out of one | | | | If you want to make real money, then you need to |
| market, say equity markets, then it flows into | | | | treat this as a business and work to a professional |
| another market, such as commodities or bonds. | | | | standard. Keep records of your trades, invest time |
| If the US dollar is weak, then the Euro, Swiss or | | | | and money to learn to trade, and continue to update |
| Australian Dollar will be strong. Trading is a zero sum | | | | your skills. It is a never-ending learning process. You |
| game, you always have a winner and a loser. | | | | should not be trading for fun, excitement or to |
| 2. Start small and build up No successful trader starts | | | | impress your friends. You are in business to make |
| out in a big way. For my own spread trading I | | | | money! |
| started out with £2,000 of risk capital, today I | | | | 8. Don't get carried away by technology |
| trade £50,000, £100,000+ per | | | | It is easy to get blown away by all the great |
| transaction without even blinking. Thanks to small bet | | | | software, on-line trading, real time data, charts, |
| sizes and practice accounts offered by some financial | | | | business channels and bells and whistles. The truth is, |
| bookmakers you can trade via a real system with no | | | | less is more, and information overload makes you a |
| risk. This beats the old paper trading game. Then you | | | | worse trader. The more complicated your system, |
| can start trading with small stakes and build up. One | | | | the less chance it will work or that you will follow it. |
| of my secrets of success is using the power of | | | | The majority of technical trading indicators are a total |
| compounding profits and trades. | | | | waste of time and you do not need to waste |
| 3. Diversify The advantage of trading with a financial | | | | money on expensive trading software that claims to |
| bookmaker is that it allows you to trade numerous | | | | predict markets. The most important factor when |
| products such as currencies, commodities, stocks and | | | | trading any market is the price. |
| bonds all from one account, yet most customers | | | | If the price goes to 50, 51, 55, 60, it is going up, |
| stick to FTSE or DOW. By diversifying your bets you | | | | does not matter what the indicator or news says or |
| reduce risk especially in non-correlated markets, i.e. | | | | what you think should be happening, the price tells |
| S&P500, Dow, FTSE, Dax are all major stock | | | | you the truth and should always be obeyed. |
| indices, you can safely say if the S&P goes | | | | 9. The crowd and media is normally wrong |
| down, the others follow. | | | | Some of the best times to buy is when the crowd is |
| However, if you traded one of the above and also | | | | terrified and there is blood on the streets. Markets |
| Gold, Oil, Wheat or $/Swiss Franc, you would have a | | | | go down because of lack of buyers, not because of |
| far better balanced account. | | | | sellers. For a bull market to continue you need new |
| Another successful strategy that I trade is trading | | | | money to keep the party going. If everyone is bullish |
| sectors. For example, you could bet one sector to go | | | | on the market, then it has no other way to go but |
| down such as Telecommunications and one sector to | | | | down as everyone that wanted to buy has already |
| go up such as Tobacco. | | | | done so. A classic example of this was the NASDAQ |
| 4. Know your personality and trading style | | | | in March 2000 and the Oil market back in July 2008. |
| While "day trading" and short-term bets may sound | | | | In my course I reveal the sentiment indicators that I |
| exciting the truth is that my wealth has not come | | | | use and how to know what the crowd is doing. Be |
| from short terms bets. It has come from trading | | | | aware, stock market crashes do not start when |
| trends over weeks, months and years. While brokers | | | | everyone expects them. |
| and bookmakers like to generate more business from | | | | 10. Don't feel you have to trade all the time |
| active customers, the winners in the long run are the | | | | Only gamblers bet on markets every single day. |
| least active traders. For many readers that are more | | | | Some time the best trades are the ones you do not |
| conservative and with a little grey hair, you will not | | | | make. Trading can become addictive both for losing |
| be suited to short term in and out trading. As a trend | | | | traders who want to get even and winning traders |
| trader I am not glued to a screen all day and only | | | | that now are on a roll and want to take over the |
| check prices at the end of the day and on some | | | | world in 5 days. |
| trades only once a week. | | | | Markets have been here for years and they will be |
| 5. Money management is the key to survival | | | | here for many more to come. As already stated, the |
| A good trader does not need to make money that | | | | best trades are trend trends where a trade is |
| often. In fact, you could get 80% of your trades | | | | entered long or short and is left to run with the |
| wrong and still make money. Let's say you lose | | | | trend. |