Understanding the Psychology of Financial Trading

LONDON, June 22, 2011 -

When href="www.cityindex.co.uk/spread-betting/">financial spread
betting, it is of vital importance to have a proper strategy in
place for entering and exiting your trades. However, it is also
important to have the right trading psychology. The best trading
strategy in the world will fail if you do not have the right
mindset to back it up.

Sandy Jadeja of financial
trading provider City Index ( href="www.cityindex.co.uk/">www.cityindex.co.uk/)
believes part of the problem is the way in which people are
hard-wired from a society that works differently to the trading
platform. “For example, in the outside world we want to buy when
goods are cheap. In the markets there is no such thing as cheap. If
a market is falling, it is weak and you should sell. If a market is
rising, it is strong and one should look to buy.

“But the classic mistake traders make is they buy into declining
markets trying to catch a falling knife and sell too early, missing
a potentially big profit. This type of thinking may work when
shopping in a mall but it is dangerous when trading.”

Today, many traders rely on charting software and other
innovations to make their href="www.cityindex.co.uk/spread-betting/what-is-spread-betting.aspx">
spread betting decisions for them. However, the most important
ingredients to successful trading are still experience and
knowledge.

To learn more about building the right trading strategy and
psychology, visit:

href="www.cityindex.co.uk/learn-to-trade/">www.cityindex.co.uk/learn-to-trade/

Spread betting and href="www.cityindex.co.uk/cfd-trading/">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
in over 50 countries. We provide access to a wide range of
instruments including margined foreign exchange, href="www.cityindex.co.uk/cfd-trading/what-is-cfd-trading.aspx">
CFDs and, in the UK, href="www.cityindex.co.uk/spread-betting/">spread
betting.

We constantly look to improve the performance of our platforms and
expand our range of services. The result is our customers benefit
from innovative trading tools with transparent pricing, competitive
spreads, mobile trading and a high standard of customer support.
Visit href="www.cityindex.co.uk/">www.cityindex.co.uk/
for details.

Contact: Joshua Raymond, City Index, +44(0)20-7107-7002, joshua.raymond[at]cityindex.co.uk