Caution In Position Sizing For Spread Bettors

Online, August 4, 2013 (Newswire.com) - Online spread betting resource and broker comparison site Independent Investor has suggested that appropriate position sizing plays an important role in protecting capital and managing the risks of spread betting, in recommending traders adopt a cautious approach to apportioning their capital.

Position sizing plays a central role in determining the potential profit or loss of a spread betting transaction, given position size is the variable that is multiplied by pointage movement to calculate the outcome of spread betting trades. Smaller position sizes hamper profit but prevent capital damage when leveraged, creating an important balancing act for traders to get right.

Through a more cautious, thoughtful approach to sizing their positions in spread betting and other leveraged trading styles, traders can achieve better results from each transaction while preserving their capital for the longer term, according to IndependentInvestor.co.uk.

A spokesperson for IndependentInvestor.co.uk suggested that through taking a cautious approach to sizing positions and thinking about the possible long-term impact of trading too much capital, traders can establish a better platform on which to build a sustainable trading account.

"The size of position you choose to take in any given transaction determines the amount you can generate in return, and also the speed with which losses will rack up should the market move against you. A temptation amongst new traders is to ramp up position sizes too quickly in a bid to chase more significant gains. However, by falling into this trap, traders expose far too much of their capital to potential risk, and threaten the integrity of their capital. By being more cautious about position sizing, traders can start to build a profitable, manageable portfolio."

"At Independent Investor, we're driven to help traders become more successful with financial spread betting. That's why we recommend being cautious when sizing up positions, and to take a greater degree of care to ensure you know what you're doing before backing up behind a highly leveraged spread betting position."

About:
IndependentInvestor.co.uk is an online broker comparison site, providing financial traders with a central resource for contrasting the different options available to them in spread betting brokerage. Independent of the leading brokers, we provide reviews and opinions that are free from bias, alongside the relevant facts and figures necessary to help traders make up their mind on which broker best suits their needs.
Aside from offering in-depth comparisons into the web's leading options for spread betting brokerage, IndependentInvestor.co.uk also provides training materials and knowledge for investors of all experience looking to better their financial spread betting outcomes. Complete with strategies, trading how-to's and industry secrets for more success, IndependentInvestor.co.uk is a one-stop solution for everything you need to know for successful trading.