Your spread betting plan acts as your own personal decision-making tool, helping you answer vital questions like what, when, why and how much. Your plan should cover relevant points about your personality, your attitude to risk, betting goals, risk management rules and any betting strategies you intend to follow.
A spread betting plan must be personal to your goals, attitudes and ideas
Making a spread betting plan may take up a little of your time, but it’s a worthwhile investment. People who exercise discipline and stick to their plan are far more likely to succeed than those who simply bet based on pure instinct.
For a spread betting plan to be successful it must be personal to you. It’s no good copying someone else’s plan, because that person will very likely have different goals, attitudes and ideas to you. They will also almost certainly have a different amount of time and money to dedicate to spread betting.
What’s the difference between a spread betting strategy, a spread betting plan and a spread betting diary?
You’ll hear these terms used a lot in the industry, often interchangeably, but they are actually quite distinct:
- A spread betting strategy defines precisely how you should enter and exit bets. For example, ‘Go long on gold when it drops below $1250, closing when it reaches $1350’ would be a very simple strategy.
- A spread betting plan is a comprehensive blueprint covering everything from your goals, motivation and attitude to risk, through to risk management rules and analysis of past positions. It can (and should) include both your strategies and your commitment to keeping a diary.
- A spread betting diary is a written record of everything that happens when you trade, including entry and exit points, profit/loss, betting statistics and even your emotional state before, during and after each trade.
What is a spread betting plan for?
Your plan will help you to be a more successful spread bettor, in a number of ways.
It makes decisions easier
Your plan gives you guidance on when and how you should bet. Without a plan you might be constantly concerned about which market to bet on, whether to take your profits early, let your losses run, or whether you’re missing out on other opportunities in different markets. With a spread betting plan you’ve done all the thinking upfront, so you can wait for the right market conditions and bet according the parameters you’ve set for yourself.
A spread betting plan will help you make disciplined decisions
It helps you bet without emotion
A plan can remove emotional decision-making in the heat of the moment. You should already know your desired profit, and acceptable loss, on every bet before you place it. This means you’ll be able to cope with any dramatic changes in the market price as your bet is in progress. Realistically, markets can only go up or down, so you should be able to plan for every eventuality beforehand.
It helps you to maintain discipline
Discipline is an extremely important trait for a spread bettor. Anyone can get lucky on a few bets, but disciplined people are much more likely to be profitable in the long run. And if you have a solid spread betting plan, discipline is much easier to maintain.
It enables you to improve
By following a spread betting plan, and maintaining a spread betting diary, you can keep a record of what works for you and what doesn’t. This is useful for analysing your own performance and improving as a spread bettor. A full record of every position makes it much easier to learn from your mistakes, and to evaluate which bets you won (or lost) by luck or by judgment.
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