Financial Spread Betting – When you should get out of a bet

Financial spread can be very profitable if you know when to exit a bet. A novice trader’s biggest mistake is holding onto a bet too long. This article will discuss the important factors to consider when determining your exit strategy.

These are the four main reasons traders should exit a bet.

The bet is not going anywhere
You must understand why you place the bet and decide how long it will take to pay off. You should get out if you don’t see the desired movement within the timeframe you set. A daily rolling bet can lead to financial losses in the form of interest and time spent managing it. Do not fall for your bets. And don’t forget that if the price moves later, you can always return in.

The real reason behind the bet is lost
I need you to tell me that there is always an underlying reason behind your bets. If not, you should stop betting and read the articles about the underlying reasons behind financial spread betting. These reasons should be kept in mind throughout the entire life of your bet. The FTSE 100 did not see an improvement in the trade statistics for this month. Are there any reports of coffee crop damage from the Brazilian tropical rainstorms? Keep that in mind. You should get out if the reason for placing a bet is no longer valid. Don’t forget that others could have assumed the same thing as you and this may have caused the market to move. If the assumption does not materialize, the swing could quickly turn against you.

We lose the bet
You won’t be surprised to hear this one, right? You can find hundreds of articles on “Financial Spread Betting Basics” that explain how and why stopping losses is an important part of any financial spread betting strategy. This should not be a surprise. The stop loss will also execute the strategy for your benefit. Stop betting if you don’t use stop losses. Please stop now and learn more about them. Your wealth is at serious risk if you don’t use stop losses.

We win the bet
Ah, the tricky one. The tricky one. Let’s face it, the reasons 1 through 3 were fairly straightforward and shouldn’t be a problem. What do you do if the odds are in your favor? It is tempting to keep your hand in the game, even during temporary downturns. Then it drops further, and you feel tempted to believe that it will soon return to the same high it was at. Do you set a price that is 10% higher than what you paid? You will not be able to ride the massive and sustained price rises that may occur from time-to-time because you have already sold out. The solution lies in “trailing stop loss”. This is a misleading term in many ways. You are using a mechanism to limit your losses even though you are making a profit. You simply increase the price at which your automatic sale is completed, so that your exit price remains higher than your entry price and you lock in a guaranteed profit.

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