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Understanding Market Psychology
1. Psychology - You have to understand the psychology of the market & what drives the crowd. There are two main elements that move the market - Greed & Fear. This is why most people lose money in the financial markets, because they do not understand the human psyche. If your winning & start to think your invincible you may become greedy for more profit & start to break your own trading rules & If you go on the inevitable losing run, you might start to question yourself & the your system & wish you did not have to place another trading position & may want to quit altogether. Getting to know yourself & your attitude towards risk & money, is the single most important thing in trading & to conquer your inner demons. 2.System - Having a system in place is absolutely crucial, as it is something you have tried & tested & through time, should give you an edge. It is important to understand what market you are in, is the market trading sideways - which is good for Fixed Odds trading Barrier Bets, One Touch...., or is the market trading up or down which is good for trend trading with Spread Betting companies. 3.Positioning - Knowing what amount to put on your Spread or Fixed Odds bet is very important & are any of your bets correlated. You should only risk approximately 2- 3% of your betting bank. By placing a stop loss, which is absolutely vital to minimise your losses, it means if the market moves against you then, the stop loss protects you & if the market moves in your favour, the object is, to take as much profit out of the market. It is important to understand if any of your positions are correlated. If they are linked & move in the same direction then, this is not really ideal, as it would be like doubling up on a bet. Article Directory: http://www.articledashboard.com For a list of Spread Betting Companies visit www.freebetsoffer.com. |
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