Spread betting is essentially prediction betting. We, the company make a prediction on the outcome of an event. You, the client, decide whether the actual outcome will be higher or lower than our prediction. If you are right you win, if you are wrong you lose.
1. Research and Preparation
2. Keep a realistic scenario when paper trade. There's no point in trading 20-30 markets at a time / having 20-30 open positions. You won't have the time to research and trade these in real life. Stick with 0 – 10 open positions.
3. If you keep having large losses then look at where you're going wrong. Maintain paper trading until your research and strategy is sound and until you're trading without incurring large random losses.
4. Karate Kid or Star Wars? It doesn't matter which you prefer but both share the lesson of learning and that expertise take time. Assuming a hazy blue Alec Guinness isn't standing next to you and that Mr. Miyagi doesn't live across the road a lot of the training is down to you. It's great to have mentors, trading colleagues, chat room 'buddies?' but ultimately your trading is down to you.
Lots of research, testing, research, testing and more research and testing, I think you get the idea. This will help you stop trading on hunches. It will reduce your losses and hopefully increase your profits. Likewise keep noting everything in your Trading Spreadsheet even though you can't be bothered. Your spreadsheet will help you analyze what you're doing well and what you're doing badly.
5. Winning and Losing Trades. If a trade goes against you, note it down and why. If a trade goes with you note it down and why. Do these even if the market went up / down because of the reason you originally thought it would.
6. Have a Plan
7. Be The -Man- (or Woman) -With-The-Plan. There are a number of strategies and steps you can take to becoming successful at trading but all have well thought out and consistent plans. None were perfect first time out. You'll need to improve your plan along the way. Trading – Planning = Gambling.
8. Changing your plans. You should only allow small changes to any trading plan. Large changes must have a very good reason.
9. Have a long term plan eg a 2 or 3 year plan and say what sort of profit level you're looking for, eg 10% return after Y2. This will help you analyze how you're getting on. If your target is realistic it can help reduce your greed on individual trades.
Below mentioned are the essential Tools for Trading:
10. A good quality, reliable PC with a fast reliable internet connection and printer.
11. Access to lots of quick live market information.
12. A phone for calling up traders.
13. Print hard copies of your notes and open positions in case your computer crashes. I normally print off my Trading Spreadsheet after every new trade. Clearly you should be backing the data up as well.
14. Capital that you are prepared to lose.