Spread Betting, that lets you make money by speculating the right direction of the price movement for an array of entities like Forex, commodities, indices and much more, is emerging as one of the most preferred ways of generating a second income.
There are a lot of benefits offered by spread betting like easier placement of bets, simple trading techniques, no need to own the assets in order to trade them and ability to make higher profits from relatively low investments. This is why, a lot of people want to indulge with spread betting.
Before you enroll yourself for a spread betting platform and start the trading, there are a few vital things about it that you must know about. Here, we have listed some common mistakes which people generally make in spread betting and lose money.
Placing The Bet Just For The Sake Of It
One of the biggest and most common mistake new traders make is that they place the bet just for the sake of it. Only because you feel compelled to do something as you have started trading, does not mean you place your bet on anything and lose money. Wait for the right time and start choosing safer options, even if, you have to wait for long. In the initial days, your focus should be on observing the market and noticing how the things function, so that you can gain experience, which can later be transformed into expertise.
Placing Bigger Bets In Early Days
Another big and common mistake that most new traders make is not starting small. Since a lot of new traders start off too big, the risk of losing huge chunks of money becomes quite high. In the initial days of betting, it’s always advisable to place small bets, even if you are too confident of winning. Don’t risk big amounts of money.
After Opening The Trade By “Selling”, Not Choosing The Right Stop Order
If you have opened the trade by selling, then it’s vital that you choose the right stop order, which is “buy”, not selling again. It is one of the most common mistakes that traders make when they are new. Choosing the right stop order can make a huge difference in your profits.
Placing Stop Too Close To Entry Point
Another big mistake that people generally make during spread betting is to place the stop too close to the entry point, because if you do this, then a volatile market can trigger your stop while vanishing your money straightaway.
Moving the Stops Once They Are Set
Don’t make the mistake of moving your stops (here we are not talking about trailing stops) once they are set. Still, if you want to move the stops, then first carefully examine that why they are in the wrong place and then modify your processes. It will always be beneficial and cheaper in the long run to not move your stops.
Not Choosing The Platform Carefully
Don’t get tempted to the offers which are too good to believe, and don’t look for a platform that offers a lot of rewards. Instead, select a platform after thorough research and ensure that you check online reviews of the platform to ensure you are making the right decision.
Ensure that you do not repeat these mistakes, and it will certainly help you minimize your losses during the initial days of the betting. Also, if you are seeking a reliable and trusted spread betting platform to initiate your trading career, then you can try using ETX capital. It is a well-known spread betting platform that allows traders to indulge in commodities, forex and indices betting in an easy and secure manner.