21 Apr | A Return to Financial Spread Betting
It’s been a while since I’ve had any financial spread bets in play. To be honest in the past I’ve had mixed fortunes with my forays into the world of financial spread betting.
It’s a situation I usually attempt to remedy by furthering my financial education before trading again; you just can’t have enough financial knowledge. So when I inevitably get the urge to dip a toe into financial spread betting waters – usually around about the time a financial blogger or two I follow have had ridiculous five-figure gains – I read, I follow online those in the know, then I read some more.
Then when the prevailing financial winds begin to blow, I top up my trading account and off I go again with renewed enthusiasm, safe in the knowledge that this time around, everything will be different.
I tend to trade a mixture of currency pairings – usually the greenback against either the pound, the euro or the Aussie dollar. More often than not I pick – what in retrospect is – a suitable entry point for my FOREX trades based on some sound technical analysis (in the very short term, technical analysis can be a great ally in choosing those entry points).
More often than not (6 to 7 times out of ten) I make good initial gains. And that’s when things begin to turn. That’s when I should be bailing out. Taking my money to the bank, recognising my failings as a day/swing trader and realising that a small gain is better than no gain at all.
But no. I drop my stops and profit turns to loss which turns to forced stop-outs due to lack of funds in my trading account. And then I’m back to where I began with a bank account a little worse for wear or a visa card getting an extended workout.
So what have I gleaned from rehashing this experience over and over? I’ll tell ya for nothing. My knowledge of technical analysis is enough to get me into potentially rewarding trades but my knowledge of what factors effect a given currency pairing is severely lacking, whilst my discipline to maintain initial stops just plain sucks!
The remedy? Well more I education (and discipline) I guess. And of course there’s no substitute for experience. I’ve been lucky enough to sit in with a currency trader who really knows what they’re doing. It’s sickening as they continually predicted market direction with a consistency that warranted that Maserati in their driveway. It was like a sixth sense.
Again I’m ranting. The whole point to this post was to inform you of the return of that urge to financial spread bet. I started reading late last week and yesterday I launched into a new trade – but more about that in my next post. This time things will be different!
If – unlike me – you have the discipline to trade to plan then the potential rewards in financial spread betting are stupendous. On the flipside many a potential Buffet has come unstuck due to a little greed or by trying to ride out a correction that becomes a change in trend. So remember, never trade more than you can afford to lose.
Thanks again for dropping by.