Trading mistakes: risking too much on one trade

He says if a trade is going well there’s a temptation to pile in, and while this can work out well when the trade is going with you, the opposite is true if things turn against you because the bigger the stake, the bigger the loss. He says it’s better to moderate the size of each trade and spread the risk.

(Video summary)

The risk of betting big: why trading isn't gambling

In this video, IG client Kassar Khan discusses the importance of not betting too much money during a winning streak, as it can be risky. He advises people to anticipate losses and adjust their bets accordingly.

However, he acknowledges that many people become overconfident after a series of wins and start betting larger amounts. This can be a mistake because the potential for both profit and loss increases and becomes more unpredictable.

The speaker argues that trading is not the same as gambling because in trading, strategies can be used to make informed decisions. Unlike gambling, where the "house" always wins, trading allows for more control over outcomes.

Managing risk

He stresses the need for having a strategy and sticking to it. He also cautions against expecting to get rich quick and emphasises that trading should be approached as a serious business. He believes that trading should be boring and devoid of excitement and volatility. He says that seeking excitement can lead to consistent losses and drain one's finances. Instead, he recommends treating trading like a business and knowing when to adjust one's bets and secure profits. He provides an example of someone who initially bets £500 per point but gradually reduces their bet size to secure profits rather than focusing on potential missed gains.

In conclusion, the speaker emphasises that trading should be viewed as a serious business and approached with a strategic mindset. They advise against increasing bets during winning streaks and stresses the importance of reducing bets to manage losses. He argues that trading involves the use of strategies and is not the same as gambling. Lastly, Kassar highlights the significance of treating trading as a disciplined endeavor, avoiding excitement and unpredictability.