Spread Betting: Trading Discipline

Even with a trading strategy that yields a high success rate it is still possbile to lose money overall if the losing trades are large and outweigh the positive trades profits. The following pointers will help you maintain good trading discipline.

Only Risk Money You Can Afford
It is vital to know how much money you are risking and that you are comfortable with the sums involved. If not the pressure from the fear of unaffordable losses will lead to rash and imprudent decisions.

Trade Objectively with Measureable Criteria
Implusively trading every feeling nearly always equates as bad trading. If you trade on a baseless whim, when the position moves against you you have no idea what to do, should i let it run or not? There is no answer because the reasons for trading were so vague in the first place...

Define entry and exit positions in advance
If your trading studies have shown there is value at entering at a cartain level in a share set that as your entry point and then wait for it to happen: be tough on yourself and do not try and jump the gun... you will be a lot happier later! You will also need to define two exit levels: one for if things go well, the other for if things dont. Always stick to these!

Admit you were wrong...
You cant win every trade, sometimes you have to admit when you are wrong and then learn the reasons why..

USE STOP LOSSES
A stop loss enforces your exit level and will aid you to cut your losses. If you spread bet with a controlled risk/guaranteed stop loss account this will protect you even in the most adverse of market moves. Do not move your stops further away to avoid stopping out, this only increases your losses and is usually a mistake in the long run. Much better to take the loss and make it back on your next trade!!!

Run your profits
Usually people tell you to cut your losses and take your profits. Set yourself a target, and some times dont be too tempted to take your profits as soon as they appear...!