And because we’ve been neglecting you for a little while, a few more tips

How to limit your risk / remove emotion – part 1

53. Try setting yourself a ‘Total Loss Limit’ to cover all of your investing before you start trading with real money. This should be an amount that you can afford to lose eg £5,000.

As soon as you get to your Total Loss Limit, stop. Stop Spread Betting. Close your bets. Close your accounts and stop. By all means try again later but wait until your funds have been sufficiently replenished before starting again.

In the meantime, take a break and/or paper trade and research. You’re probably going wrong somewhere. Work out what it is that you are doing wrong so that when you start again you don’t just lose another £5,000.

Have a look at Spread Betting Tips 1 to 29. Make sure you’ve got plenty of data to analyse the problem(s). Yes tips 1 to 29 are dull but they help.

54. Use a Stop Loss. They can cost a little more in the short term but a Stop Loss will generally stop you from holding on to poor bets. That will save you money and stress. Firms like Financial Spreads and Capital Spreads add automatic stop losses to all bets. Don’t worry too much about firms adding these ‘automatically’ you can always re-set the stops to something more aggressive if that’s what you want.

55. It’s also worth looking at a Limit Order to help reduce the emotional angle, ie an order to close a bet if it reaches a certain level. eg if you buy a share at 450p you can also place a Limit Order to close that bet when it hits 490p. That way you automatically bank a 40 point profit (if it hits 490p). Of course, the share could go higher and you could have made more money by not closing the trade. Nevertheless Limit Orders can help your discipline, releases funds and margin for more trading. By reducing the greed element they can stop you from holding on to a share after its gone up and is on its way back down

Good Luck

DB
Clean Financial - Spread Betting