Trading from Home: How to Manage the Risks

By Monday, July 18, 2016 0 No tags Permalink

Online trading such as Forex Trading and Spread betting is famed for its risks. Categorised as gambling by governments around the world, and therefore free of income tax, it is a high risk, high reward game, and that’s why it’s beloved of so many. Challenging, exciting, and unpredictable, it offers the chance to make tremendous profits, balanced against the possibility of devastating losses. For those who love thrills, it can prove intoxicating.

Would you believe it, then, if we told you it needn’t be so high risk after all? The movements of the spread betting markets are not entirely spontaneous. It is real external factors that drive them, and this means that it is eminently possible to predict the patterns to come. What’s more, tactics have a part to play in the risks you run, and these can be minimised if you wish it.

If you’re intrigued, here’s how it works…

#1: Do Your Research

As with any form of investing, people have a tendency to look on spread betting as little more than a game of fortune, but this is not the case. The markets are driven by a number of real-life factors, and if you’re able to understand these and the impact they have, then foretelling the future of your investments is not beyond the realms of possibility. Do your research, become an expert in the art of trading, and you’ll soon find that spread betting no longer looks as much like a gamble.

#2: Don’t Bet More Than You Can Afford to Lose

It sounds obvious, but too many traders make the mistake of betting more than they can afford to lose. Leverage can be a wonderful tool for maximising profits, but it also increases the likelihood of disaster should everything go awry. The trick is to know how much you’re actually gambling with when you place your bets, and to make sure that you can spare it. Stick to this golden rule, and even your worst defeats won’t signal the end of your spread betting career. Losses are inevitable, after all, but it matters little so long as they’re recoverable.

#3: Stop Loss Orders

It is not for nothing that stop loss orders are known as ‘the trader’s best friend’. A tool specifically designed to minimise losses and catch traders before they fall, they will save you from disaster every time, and this means that they are invaluable to the risk averse, the cautious, and the prudent. Use them properly, and your spread betting future is secured.

Put these three simple tips into practice, and success is yours for the taking.

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