No matter what kind of investor you are, there are several
reasons why spread trading can add value to your portfolio.
1. Make
Money
This
one is probably the most important point here. While trading the market is a
lot of fun, let's face it, the goal of any investor is to make money.
Spread
trading offers some fantastic opportunity in a range of different markets. Want proof? A sample $50,000 account following the trades
on this site from 2008 and 2009 would now be worth $124,883 - and that is after
broker commissions (as at end of April'09*).
Adding
to this, we have a trading method that is NOT
tied to the stock market and therefore provides fantastic diversification and
risk protection, particularly when stocks have been tanking.
It's
not too hard to see the advantages of this trading method over stocks. Just
compare the results.
2. Less
Scary Stuff
If
you have traded only stocks in the last 10 or so years, chances are you would
know all about volatility. Take a look at the chart of the DJIA below. This
shows at least 6 times in the last ten years where you'd wish you were not in
the market.
It
started with the Asian currency crisis (1); then the tech wreck (2); then the 9/11
sell off (3); then almost two years of stagnation (5); and then of course the massive
financial crisis inspired sell-off of 2007 through the 2009 (6).
Spreads
are not this volatile. It is true every market has it their ups and downs once
in a while, but spreads tend to be a whole lot steadier and therefore easier and
less stressful to trade.
There
are a lot of unfortunate stories out there of people losing their hard earned
money in the stock market. Every type of trading has its own risks, but a sound
approach to trading spreads has not shown those risks.
3. Learn
something new
"Take the attitude of a student.
Never be too big to ask questions. Neverknow too much to learn something
new." - Og Mandino
This
simple approach is often the difference between average investors and successful
ones. Someone else once said something like: "if you want the same results,
keep doing the same thing". After looking at the DJIA chart above, you cannot
help but think doing the same thing is not the best of strategies.
Learning
to trade spreads - and this site is designed to help you do that - may just
give you a new perspective on investing in other markets, including stocks. This alone makes spread trading a valuable
pursuit.
Here is another important point: unlike many trading
systems including all those so called forex robots, the ProTraderDigest offers
complete transparency. The site alerts you to trading opportunities and you
make the final decision as to what to do with it. It means you learn as you go.
Also, all subscribers receive full support and assistance
in whatever they need to get going.
4. Develop
discipline
If
you have not read the most excellent book Market
Wizards by Jack Schwager, then go and buy it today. All of the traders interviewed
in this book talk about how important discipline is in trading and investing.
The
best way to develop discipline is to apply a proven method that is easy to understand
and follow. Commit to learning from this method and discipline will come.
5. Get a
life!
Whether
you are a parent, a golfer, a blogger, a fisherman, a skydiver, a Rotarian or
anything else, there are so many things we would rather be doing that sitting
in front of a screen all day, nervously watching the bottom line.
Spread
trading allows you that freedom. Since these trades often last weeks, a quick
check on the markets every day or so is basically all you need to do to
maintain positions.
Further,
subscribers to this site receive optional SMS alerts, RSS headline feeds, a mobile web version
and email alters - all at no extra cost. This way you can keep in touch with
what is happening without it getting in the way of doing what you really want
to do.
If
you subscribe to this site or not, the simple fact is spread trading has some
great advantages. In light of the poor performance in the stock market in the
last 18 months and even the last 10 years, this type of trading stands out even
more as a viable and profitable tool.
Please
feel free to contact me with any questions or comments.
The Guide to Futures and Spread Trading
Earlier in the year I wrote an ebook called “The Guide to Futures and Spread Trading”. Its purpose was to explain the concept of spread trading to newcomers.
I’ve just started laying out plans to build this into a either a printed book or course. I’ll be charging for that. For now however, it’s still free. To get it, just sign up for my free weekly email newsletter here:
