Can’t help but remember that I predicted towards the end of last year that the markets were due for a BIG correction. It happened yesterday, when the FTSE suffered its worst fall since 9/11.

And where was I on Black Monday? Um, sitting on my balcony, gazing at a sparkling blue sea and wondering whether to go for a swim. Write my new book, I mean.

Since the start of the year, I’ve done quite well on last year’s favourite stock, Apple…. although I dare say that will change as soon as the US markets open this afternoon, and my long-term short on Citigroup is also making money. (I’ve been stalking Bear Sterns, too, but I think it will probably gap down so far this afternoon that I’ll continue to wait.)

I have also achieved the almost-impossible: Losing money on a SELL trade in a falling market. Which is to say I have been short on TR Property since 9th January (take a look at the chart and you’ll see why), even though it is defying all odds and continues to rise - up 2.9 right now, the little bastard - while everything around it heads south.

If you’re new to all this market turmoil, then take it VERY easy. Don’t make the mistake I’ve made in the past, and think, “Oh, it’ll all go back up in a couple of days.” Let me make it clear, NO-ONE KNOWS FOR SURE WHAT WILL HAPPEN NEXT (although according to the futures market, the Dow will open WELL DOWN). Last time I adopted the Ostrich Position - head in the sand, waiting for my paper losses to diminish, all that happened was that I continued to lose money until I could bear the pain no longer, and fold the trade. I’d have been better off - in all senses - to switch my BUYS to SELLS.

Please, please remember that when the markets are this volatile, positions change very quickly and you need to monitor your positions frequently.

Happy 2008 and welcome to all my new readers. Bets and the City evidently found its way into plenty of Christmas stockings and spent the festive season drifting in and out of the Amazon Top 500 (not that I was looking).

Try as I might, I have failed to put you off spread betting and tons of people have taken advantage of the £50 Finspreads top up offer for newbies. So what advice to I have for beginners? Take a look at this email from Aubrey, as it’s fairly typical:

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Hi Sally

I opened my account with Finspreads a week ago and have already managed to severely dent my original £100 (I was up to £117 last night, but today I’m down to a measly £30) so I’m looking forward to that £50 top up!

I was trying my hand at some quick in and out trades at 10p to start with, but I rapidly moved onto 50p then £1 per trade.  I had an overnight 25p buy on the GBP/USD last night, which was up by £23 at one point this morning. But then the price fell rapidly.  Add some more bad in/out trades this morning where I went completely the wrong way at the wrong time and I was down a few more £20’s!

I’m sure you’re asked this all the time, but do you have any guiding words for beginner – I really want to get into trading, probably taking trades lasting 1 – 5 days in general.  I think attempting to ‘day trade’ was my mistake, but I learnt a lot in my first week!

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So what’s Aubrey been doing wrong? It amounts to a Typical Beginner Mistake that almost all of us are guilty of. In fact, two mistakes.

First off, there’s a reason why Finspreads let you trade for only 10p a point for the first eight weeks: it’s so you can get the hang of the operating platform, along with a feel for how the markets move and their volatility, without putting too much at risk.

So what do we all do?

MISTAKE NUMBER ONE: It all ‘goes wrong’ as soon as you start to WIN. You immediately get overconfident. “Ha!” you say smugly. “This is easy. I’m a natural. Soon I’ll be rich.” So then you increase your stake…. and then you increase it some more….

…and then the markets swing and you start to lose. Your easy-gotten-gains melt away, and unless you act fast, you end up losing everything you won, and then some.

The lesson? Money management is crucial.

If you have £100 in your account, the MAXIMUM you can afford to lose is a tenner. (I try not to lose more than 1 per cent of my trading bank…. this works best when there’s at least £5k in it, but you see where I’m coming from.) You MUST limit your risk.

MISTAKE NUMBER TWO: Most beginners make too many trades. Just do one at a time. OK, two at a time, because this is new and exciting. But not more. (Definitely not more than 3 ) We all overtrade at first. Just try not to be silly about it. And if you must overtrade, do so at 10p a point.

So the Golden Rules for new Finspreads customers: Stick to 10p a point for as long as you possibly can. And if you’ve started with £100 in your account, remember… a £5 loss means you’ve lost five per cent of your starting bank. Try to make that the absolute maximum you lose in a single trade… and if, like Aubrey, you find yourself £23 up, then maybe it’s the moment to take profits.