Are You Reducing Your Trading Returns Through Bad Timing?By City Index, PRNE
Thursday, August 11, 2011
LONDON, August 12, 2011 -
Last year a study by Barclays Wealth analysed the trading actions of retail investors investing in equity mutual funds between 1992 and 2009. The study revealed that the investors’ timing of their decisions actually reduced their returns by an average of 20 percent. Spread betting provider City Index (www.cityindex.co.uk/) looks at how best to time your entry and exit to and from every trade.
Entering a trade
Whether financial spread betting or share dealing, you should undertake extensive research before every trade. Traders who know how a particular market moves and reacts are in a stronger position to time their entry to a trade than the trader who bases their decisions on hunches.
There is always room to increase your understanding of how your market moves. Try a different form of market analysis, such as charting or news analysis if you don’t already use them. City Index also offers free seminars on technical analysis for account holders and non-account holders alike.
Exiting a trade
“Cut your losses and let your profits run” is a famous trading mantra, but it is easier said than done. Sandy Jadeja, Chief Technical Analyst of City Index, says: “As a trader it is easy to enter a position hoping it will move in your favour forever. But at some point the market will turn and you may find yourself holding on for dear life wishing that your position would turn from red to black. The key to long-term success is knowing when you should cut a losing position.”
Again, understanding your market and the activity surrounding it will help you know when to exit your trade. In spread betting, stop losses and limit orders are also invaluable tools which can be used to automatically close your trades at set trigger prices.
Practice trading the markets with a £2500 virtual cash balance with a City Index demo account. Sign up and get started in minutes at:
Spread betting and CFD trading are leveraged products which can result in losses greater than your initial deposit. Ensure you fully understand the risks.
About City Index:
Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.
As a group, we transact in excess of 1.5 million trades every month for individuals in over 50 countries worldwide. We provide access to a wide range of instruments including margined foreign exchange, CFD trading and, in the UK, spread betting.
We constantly look to widen the range of assets we offer, improve the performance of our platforms and expand the range of services we provide. The result is that our customers benefit from innovative trading tools with transparent pricing, competitive spreads, and a high standard of customer service and support. Open your City Index spread betting account at www.cityindex.co.uk/spread-betting/start-spread-betting.aspx
Joshua Raymond, City Index Group, Tel: +44(0)20-7107-7002, Email: joshua.raymond[at]cityindex.co.uk
Tags: August 12, City Index, London, United Kingdom