Fixed Odds trading is particularly suited to trading volatile markets. It is less well known than traditional Forex trading or spread betting proves a useful addition to the traders toolbox. This is particularly true in times of market turbulence when traditional long/short strategies often struggle to show profits.
Money management or risk control is as important in Fixed Odds trading as it is in any other form of trading or investment. It tends to be one of the most overlooked aspects of trading and yet arguably is the most important in generating long term trading success. There are several pitfalls. A common mistake that many traders make is to stake too high a percentage of their bank or ‘pot’ on a single trade.
Controlling your level of risk and managing your trading money is one of the most important aspects of a trading strategy. However many traders overlook this aspect of their trading and often to their cost. Frequently traders stake far too much of their trading capital on a single outcome and then end up stretching their accounts to recuperate this loss.
Other factors can also cause this. Trying to make gains too quickly, overconfidence or maybe even just a lack of understanding. Losses can also have a negative effect and cause traders to take too many risks in trying to get back to square one.
Fixed odds trading [http://www.FixedOddsInvestment.co.uk] can however also help to alleviate some of these problems. What makes Fixed Odds unique amongst trading approaches is that before you place a trade, you know both your potential profit and liability.
This helps to make risk control easier. As a trader you can balance up the risk vs reward of a trade prior to placing it. This helps you to focus more on the question of ‘how much do I stand to lose’rather than’how much I stand to win.’ Therefore you only ever need enter trades where the reward potential is in your favor.
A further benefit of trading via Fixed Odds is that you are not just limited to going ‘long’ or ‘short’. Several bet types are available which allow you to profit whatever the market is doing. For example if you think the market will range over the next few weeks you can construct a bet to take advantage of it. Basically you have control of the trade type and use the most appropriate in line with what you think is going to happen.
Disclaimer: Please note all prices are for information only, they should not be relied upon for accuracy or trading. All prices quotes are based on CFD prices and are similar though not always identical to real exchange prices. STOCKTRKR or anybody connected with STOCKTRKR will not accept any liability for loss or damage arising from use of any information/commentary/charts or articles which is provided 'as is' for educational purposes only, nothing contained on this website should be considered as investment advice - please seek proper investment advice from registered financial broker or institution if you wish to trade on global markets and ensure you are familiar with the risks.
