A lot of people, especially investors and traders alike, sign up for a spread betting account erroneously thinking that it is the effortless way to make a lot of money with little or no risk at all. These hopeful individuals are unaware of the infamous term “six month’ers” which basically is the minimum time required for a spread betting account to remain operational before the punter gives up and/or switch to a different service provider. To be reasonable and fair, there are several other spread companies that held onto spread-betting clients on average for 12 months and more.
The reason behind high the high attrition rate
Spread betting can potentially be dangerous if not carefully considered and it is epitomised by newbie spread bettors who simply get wiped out and spoiled because of the erroneous thought and delusion that spread betting is indeed a quick and easy way to gain profit.
It is indeed true that new spread bettors are looking at it at a wrong perspective. But with careful consideration and risk, it is possible to practice better approaches to spread betting.
Losers: where are they?
The reality remains that almost 50 % of spread bettors succumb to attrition because they lose more money than they gain. It’s not hardly a surprise that there isn’t much to be heard from losers because no one really bothers to write articles and blogs about losing. The simple fact remains that people opt to sing songs of praise when winning than sulking in defeat.
The truth is that any news from surviving traders who lost so much in the investment funds industry are left unheard of. The fund managers bawl about their recent best performing funds while at the same time surreptitiously conceal their sub-par performances.
There is still a lot of ambiguity surrounding the longevity and mortality in investment terms for the conventional investor who operates share dealing accounts as compared to spread betting approach. Many would argue that spread betting would last much longer and the spread betting attrition rate would significantly improve for first timers if practiced correctly.
Improving on spread betting
Presently there is no such movement as a campaign to help investors to make use of better spreads. However, perhaps the best approach to limit the risks of faulty spread betting is being alert regarding the dangers of being bullied by spread betting firms into day trading, commodities, currency and foreign exchange currency pairs that would show off quicker execution and tighter spreads.
Another good approach worth considering is betting on old equities and stocking indices over a longer position trade at the same time capturing dividends along the way, are among several sizable ways to lessen the risk and asserting more gains. Moreover, perhaps the best hypothetical campaign in how to better spread bet is equipping oneself with education regarding the vital importance on how to manage leveraged risks by using stop orders and being more cautious in position sizing.
Putting a stop to the loss
By giving better advice to new spread bettors who are itching their way to profitable gains is by cautioning them of the pitfalls of this alternative investment approach. Careful tread over things might ultimately slow down the attrition rate caused by faulty spread betting. This in turn will provide for spread betting companies a chance to redeem themselves from being regarded as sharks of the spread betting waters where fools and non-fools alike want to dive in a sea of uncertainty.