How do the expert traders make profit in spread betting

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Spread betting is one of the most complex professions in today’s world. Every day the number of retail traders in the online trading industry is increasing at an exponential rate. Most rookie traders start to trade financial asset to secure their financial freedom. Sadly, they don’t know the fact that almost 90% of the traders are losing money. Trading is an art and there is no shortcut way to become a profitable trader. You have to educate yourself in an organized way and develop a solid trading system to trade this market. Without having good knowledge of this market it will be almost impossible for you to deal with the dynamic nature of this market. Today we will tell you how the expert traders are making a huge amount of money in currency spread betting.

Risk reward ratio

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Understanding the risk-reward ratio in the Forex market is very crucial to your trading success. Novice traders are always placing trades with a negative risk-reward ratio. So they have to win more trades to remain on the profitable side. On the contrary, the expert traders are always trading the market with 1:2+ risk-reward ratio. If you can follow this simple rule you can easily make a profit even after losing 50% of the time. If you see the portfolio of the professional traders, you will be surprised to see that most of the traders are losing money due to a negative risk-reward ratio.

Use of indicators

As a retail trader, you should never follow the indicator readings to place a big lot size trade.  Novice traders are always using different kinds of indicators to find the best trade setups. There are two basic types of indicators in Forex market – leading and lagging indicators. Leading indicators will always give early trading signals. So you can’t trade the real-time market dynamics by using the leading indicators. On the contrary, if you use the lagging indicators reason you will always miss the big movement in currency spread betting. So it’s better to avoid the indicator reading and focus on the price action signal.

Use of price action trading signal

The price action trading system is one of the easiest way to find profitable trades in currency spread betting. It’s nothing but the study of the Japanese candlestick pattern. In the eyes of trained professional, the price action trading is often considered as the most profitable and reliable system. Being a novice trader it will be a little hard for you to understand all the basic price action confirmation signals but if you focus on the psychological factors everything will become easy for you. Every candlestick has a story to tell you. You need to understand the language of the market to find the high-quality trades in extreme market conditions.

Maintain a trading journal

Maintaining a trading journal is very important in the Forex market. Novice traders never learn from their trading mistakes since they don’t keep a record of their trade executions. But if you consider the professional traders at ETX Capital you will be surprised to see most of them are following a paper-based trading journal. If you start following a paper-based trading journal it won’t take much time to find your trading faults. You need to assess your trading history every weekend so that you can easily learn from your trading mistakes. Mistakes are often considered as blessings as it allows novice traders to learn new things.

Control your emotions

To become successful in the trading industry, you must learn to control your emotions. Emotions are often considered as the most dangerous enemy of Forex traders. Learn to trade this market by using rational logic. Never let your emotion control the way you place a trade. Develop a strong strategy and place your trade with managed risk.

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