28th August 2017
The FTSE 100 is closed today due to a UK bank holiday. So, lets look at why so many traders fail instead.
I am sure you have heard the statistic that 90% of people that start spread betting fail and from that inferred that it is nigh on impossible to make a success of it. As you can see from my results I am not in that 90%. So, how can you avoid being in that group too? There are a whole range of reasons why traders fail and I have set out a few below. If you would like to avoid falling into the failed trader camp I would bear these in mind! To overcome them please consider joining or attending one of the seminars!
- Overtrading
- Chasing losses
- Gambling – no discipline
- Stake too big (as a % of capital)
- No control over emotions
- Cut winners too soon – But dont let a winner become a loser
- Adding to losing trades – Better to cut and run I feel
There are of course other reasons but these are the main ones in my opinion. Despite what you read about “working” for half an hour a day and making untold wealth, it requires skills and knowledge. Join me and you can learn what you need to do.
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Yes Nick I like those onservations every one is true. Particularly the gambling reference as I believe many people who spread-bet are in fact gambling addicts and the SB interface is no more than a permanently-running fruit machine or possibly bears an unpleasant resemblance to a fixed odds betting terminal, the so-called crack-cocaine of gamblng addicts.
Setting that aside, I would make 3 observations based on many years of investing-
1) Leverage is your enemy
2) Although stake sizes should be manageable, they must also be meaningful, otherwise theres no point. So I am always looking to be all-in on my positions where the odds are in my favour. I want a great return at low-risk and low cost. No financing costs on leveraged positions thankyou. I want decent returns of 1-5% every time I deploy capital. Compounding does the rest.
3) Its OK being fully invested as long as you have an exit-plan when the market moves against you and the discipline to take the loss. This year I have bern very fortunate and booked no losses.
Undoubtedly some luck involved, but also the patience to stay out and allow high-probability situations to develop. I have also exited with great timing when break-outs failed to develop, you font have to be a rocket-scientist to spot this, its just typical behaviour playing and replaying over and over again.