For traders looking to play the markets professionally (or make a living out trading), whether through financial spread betting or any other instrument or investment type, there are a number of considerations that must be taken into account. Particularly for those considering giving up their job to trade financial spread betting for a living, running through the numbers and the practicalities of the plan are an important precursor to deciding whether or not it is viable. By the time you get to making a decision about whether to trade part or full time, you should already be reasonably far into your trading journey, and be comfortable with your ability to make a trade profitable. Beyond that, there are several key issues you need to think about in deciding how best to structure your working life.
Time To Spread Bet
The first thing you should think about is whether you need extra trading time, and whether your strategy can be expanded to fill either part-time or full-time hours. Generally, the bulk of trading work tends to revolve around research and strategy time, in addition to monitoring open trading positions and broader account management. Knowing how much time you need, or more important how you could use your time to turn a better trading performance is important as part of making the assessment as to how much time you need.
Rate Of Return
Another key consideration that should be at the forefront of your mind is the rate of return on offer from the hours you spend in front of your trading desk. In the situation where you are deciding between part-time and full-time hours, calculating this as an hourly rate is required to determine whether you can cover your cost of living for the hours you intend to dedicate to trading. Obviously this is dependent on a number of variables, including the amount of capital at your disposal and the efficiency and frequency with which you can generate results, but is nevertheless an essential computation in deciding whether full or part time works for you.
When taking the step towards becoming a spread bettor for a living, whether through switching up to part-time or full-time exposure, traders should be mindful of the need to set performance targets, to meet them and to learn from them in order to progress. Setting targets helps avoid getting too bogged down in the day-to-day, and allows traders to maintain a general oversight over how their account is performing. This allows strategic decisions to be made more effectively, but most importantly allows traders to make sure they are hitting their earnings targets to make part/full-time trading a viable option.
Spread Bet Professionally: It’s Not Fun And Games
Spread betting can be great fun, but it has to be hard work. New traders especially can tend to get easily entangled in the novelty and adrenaline of being engaged in the financial markets, and it can be a exciting and exhilarating way to pass the time. But spread betting as a financial trading tool is so much more important and valuable than that, and unlike gambling, presents viable, credible opportunities for risk to be controlled and managed with a view to generating returns over the long term. When you’re engaged in trading the markets, there are a number of factors you should bear in mind to distinguish yourself from ‘leisure traders’, and to make the most of what the markets have to offer.
Being serious about spread betting means being absolutely ruthless, in a calculated, measured way, in order to extract the most from every position. That means sometimes taking non-glamorous positions, or exposing yourself to uncomfortable markets, if that’s where the opportunities reside. Sometimes it means holding positions open for longer than you naturally feel comfortable with, or chopping well-researched but losing positions as soon as they start costing you money to keep a tight grip on your portfolio. If you want to succeed, it’s important that you treat each opportunity as a professional, with the hunger and drive for a profit whenever possible. The more ruthless you are in position management, the better the results you can expect.
The most infuriating bad habit of new traders from the professionals’ perspective is gambling. Gambling in this context can be considered to be trading without enough research to make an informed decision. Even if the odd position comes up positively, gambling with financial spread betting is crazy. For anyone that wants to lose their investment capital, gambling is one of the quickest ways to go about it, effectively stabbing blind at the markets in the hope of a profitable position.
As an alternative, trade on measured logic and reasoned research. It might not sound instantly as fun, but it is a whole lot more satisfying to research, identify and profit from your own hard work, rather than hitting and hoping for the best. Indeed, gamblers also expose themselves to significant downside risks, which are far better controlled through a managed approach to the markets.
Research Every Position
Along a similar vein, you need to research every single position and market you think you might trade before risking a penny of your capital. Spread betting may be enjoyable, but that isn’t its primary focus – you need to put work and effort into every position you trade in order to make sure you’re making the best of every pound risked. Read current affairs, research the markets and look at the graphical pricing data to establish trend directions and whether there are any obvious opportunities in waiting, before taking your exposure to any market. This will help ensure that the trades you do place will be the best thought-out, and the most likely to succeed with all other things being equal.
Guard Your Capital With Your Life
Unlike gambling in an online casino, where you may be happy to lose substantial amounts of your capital in the hope you’ll eventually recover it, the approach to capital management for successful spread bettors has to be different. It has to be much more guarded, and traders should try to guarantee the integrity and safety of their capital as far as possible on an ongoing basis. Lost capital is not just a few pounds down in your account – it’s lost opportunities for making more money. As the core and probably one of the only assets traders can leverage, capital integrity is a key theme amongst experienced spread bettors who appreciate the professional demands put on .
Trading spread betting on a more professional basis is a risky, difficult way to make money, but one that remains viable for traders who take the necessary steps to ensure good results.