| One of things I often discuss with other spread | | | | sequence try to ignore your ego and remember how |
| bettors is what to do when they are winning. | | | | you got there. |
| The question is often accompanied by an element of | | | | After a bit of luck, you will often be tempted to: |
| surprise. Yes, financial spread betting can catch out | | | | 1) Increase your stake size |
| the unwary but there are lots of ways to reduce | | | | 2) Not use stop losses |
| your trading risk these days like using: | | | | 3) Trade more frequently |
| 1) Stop Losses or Guaranteed Stop Losses. These | | | | 4) Trade markets you are less familiar with |
| help close bets that are going wrong | | | | 5) Trade after less research |
| 2) Smaller Stakes. You can trade $1 or £1 per point | | | | In reality though, you need to stick to your trading |
| on the FTSE, Dow Jones etc | | | | strategy. If your strategy needs altering, that is fine. |
| 3) Limit Orders. These help close your bet when you | | | | But any such changes need to be thought through. |
| are winning and have reached a profit level you are | | | | One of the most common errors is increasing your |
| happy with | | | | stake size (coupled with less research). |
| 4) Live Charts. These provide historical as well as | | | | You may accept that you are increasing your risk but |
| up-to-the-minute trading trends | | | | you are also changing other variables eg how you |
| However, the question still pops up. What should I do | | | | trade. Most investors trade best when they are calm |
| when I am winning? | | | | and rational. Or at least rational. If you increase your |
| That clearly depends upon a lot of factors and as | | | | stake sizes you can easily lose your head and alter |
| the adverts say, you should consult an independent | | | | your trading style. Probably for the worst, ie closing |
| financial adviser when necessary. | | | | winning bets too quickly and trading losing bets for |
| However I can point out a few things to watch out | | | | too long. |
| for. You might be a Star Trader. You might not. | | | | Less research will only exacerbate any irrational |
| Either way most spread bets are a two horse race | | | | trading behaviour due to a lack of information. |
| and you win or lose. With any such set of events, | | | | Also, whatever you do after your winning streak, do |
| like tossing a coin, if you do it long enough you will hit | | | | not forget to put some funds to one side for when |
| a series of wins. | | | | your trading is going less well. |
| You may also have had a good few losing streaks | | | | In summary, enjoy your winnings, keep your head, |
| along on the way. | | | | plan any changes and do not try to give your money |
| Some of your ‘wins’ will come through luck. | | | | back to the spread betting companies as quickly as |
| In the past, despite thorough research, I have | | | | you can. |
| sometimes benefited from external market factors | | | | Spread bets carry a high level of risk to your money |
| like New Analyst Recommendations, Directors Buying | | | | and may not suit all forms of investor. You can lose |
| Shares, Increased Dividends, Takeover Rumour etc. | | | | more than your initial investment so make sure you |
| All of these things and many other factors can help | | | | only speculate with capital that you can afford to |
| produce a winning sequence of trades. A lot of these | | | | lose. Likewise make sure you understand the risks |
| things can also help convince you that you are, | | | | involved and seek independent financial advice where |
| indeed, a Star Trader. However you hit your winning | | | | necessary. |