Spread betting offers advantages such as tax-free profits and 24/7 trading but presents risks, particularly for beginners. Approximately 75% of retail investors experience losses, which emphasizes the need for strong risk management practices. Common mistakes include trading without a written plan, which can lead to impulsive actions like revenge trading. A solid plan should define market focus, risk limits, and a review schedule. Additionally, traders must understand position size and leverage as critical components of their strategy to improve trading outcomes.
Trading without a written plan leads to impulsive decisions, such as revenge trading. A strategic approach should include market focus, entry triggers, and loss limits.
FCA rules require firms to disclose loss rates, revealing that around 75% of retail investor accounts lose money. Effective risk management is essential.
Beginner traders often ignore position size and leverage factors. It's crucial to maintain disciplined risk management to navigate the complexities of spread betting.
A trading plan should evolve based on performance data over time, providing a framework for decision-making and helping traders avoid emotional volatility.
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