I’m interested to know what is the usual way that people play it, also been having a look online. (I know I’m never going to make a fortune and know how easily it can all go A over T. What strategies or usual bets to people put on when playing the FTSE?
What amount of money are you happy to take out of your wallet and drop down the drain:
The answer to that question tells you exactly how much risk capital you should have on each trade.
How many times a day, week or month are you happy to walk up to a drain and drop this amount of money down it?
The answer to that gives you your trade frequency.
Stick to those rules and it won’t ever go A over T.
Everything in life is about taking risks. People manage to do this very well, except when they start doing it with money and then they get very greedy and risk more than they can afford. That’s where people go wrong.
Working out what you can afford to risk is the most important key to successful trading. All people who lose, do so because they have comprehensively failed to evaluate their risk capital levels.
Example: bank share is trading on a spread betting site at at 200p(bid) -203p (offer). Buy at £50 a penny at 203p, so each penny it goes up or down you are have/have not 203-current bid price. Similar to having bought £10,150 worth of the share. There’ll be a margin requirement depending on the market – say 10% for a FTSE100 share, so 1015 at the outset.
And remember it is never wrong to walk away.