Risk/Reward & Money Management

spc · Sep 23, 2004

i've Been Spreadbetting (small) For A Year Now, Not On A Daily Basis Though. And I'm Tired Of Losing Out On The Spread. Thinking Of Cfd's Now, Either Direct Market Or Quoted. Any Advice On Risk/reward Ratio Would Be Appreciated. Any Other Advice Would Also Do. Thank You. This Below Is An Example:

My Start Up Capital Is £3000 (leveraged £30000)
Per Trade 1%- 2% Of Capital.
Hold Position For Anything From A Day To 4 Days.

Lets Say I Buy 100 Shares Of Xyz @£3.00 Per Share Which Is £300. Place My Stop Loss @ 2.75 About 7% - 8% (is This Good Or Is It Too Much?)

Lets Say The Trade Goes Against Me And My Stop Gets Hit. Therefore I Lose £25 Plus Commissions And Financing Costs. This Was The Risk Factor Of The Trade.

Now What Should The Reward Be If The Trade Is Going My Way?

When Should I Get Out To Follow A Good Risk/reward Ratio

Tks Again

cj12 · Sep 23, 2004

If you making money on spread betting stick with it. You only paying on avr 2.5 ticks per side. and if you are holding 1 to 4 days that's just fine. it would be a different story if you was day trading using S/P. You would get killed. for day trading you do need a real brokerage account like IB.with only a tick spread. but you got to pay commission and if you are good at making money you got to pay Mr tax man. So for know i would say stick with what you are doing as long as you are holding for more than 1 day. AND WHAT SHOULD THE REWARD BE IF THE TRADE GOES YOUR WAY. look for a 0.5% move then move stop to break even. then look for 1% then mov stop to 0.5% then look for 1,5% and move stop 1.% and so on.good luck

CJ

spc · Sep 23, 2004

tks cj

winod · Sep 23, 2004

spc said:
i've Been Spreadbetting (small) For A Year Now, Not On A Daily Basis Though. And I'm Tired Of Losing Out On The Spread. Thinking Of Cfd's Now, Either Direct Market Or Quoted. Any Advice On Risk/reward Ratio Would Be Appreciated. Any Other Advice Would Also Do. Thank You. This Below Is An Example:

My Start Up Capital Is £3000 (leveraged £30000)
Per Trade 1%- 2% Of Capital.
Hold Position For Anything From A Day To 4 Days.

Lets Say I Buy 100 Shares Of Xyz @£3.00 Per Share Which Is £300. Place My Stop Loss @ 2.75 About 7% - 8% (is This Good Or Is It Too Much?)

Lets Say The Trade Goes Against Me And My Stop Gets Hit. Therefore I Lose £25 Plus Commissions And Financing Costs. This Was The Risk Factor Of The Trade.

Now What Should The Reward Be If The Trade Is Going My Way?

When Should I Get Out To Follow A Good Risk/reward Ratio

Tks Again

Hello spc,

You must understand that spreadbetting is related to daytrading...daytrading is to speculate in wich direction the market will go. So that make it possible to trade without contract shares.

Make an study of daytrading and search for the better en bigger spreadbetting company....mostly the spread is there lower. For example IG index.

Please forgove my bad english.

ciao

spc · Sep 23, 2004

hey winod & CJ,

since spreadbetting is not a zero sum game it's basically us against the bookmakers. 97% of people loose money spreadbetting. Problem with SB is once ur in a trade it's very difficult to get out because you cannot have a stop of 5 to 8%% ofcourse u could do that manually once the trade goes against u but then the temptation arises of hanging on for a few more hrs and then days. IG has a stop of I think atleast 15%. Indices (us) spreads are like 10 to 12 for daily and uk is 6. This is ok if u hold positions for a day to 4 or 5 like I normally do. But since I'm getting more and more into this I'm now looking to sought of day trade or maybe hold for 2 days max.

let me try my dutch now

dank u well
dhak manaer
that must be really bad, wonder if u can even understand it ??

winod · Sep 23, 2004

spc said:
hey winod & CJ,

since spreadbetting is not a zero sum game it's basically us against the bookmakers. 97% of people loose money spreadbetting. Problem with SB is once ur in a trade it's very difficult to get out because you cannot have a stop of 5 to 8%% ofcourse u could do that manually once the trade goes against u but then the temptation arises of hanging on for a few more hrs and then days. IG has a stop of I think atleast 15%. Indices (us) spreads are like 10 to 12 for daily and uk is 6. This is ok if u hold positions for a day to 4 or 5 like I normally do. But since I'm getting more and more into this I'm now looking to sought of day trade or maybe hold for 2 days max.

let me try my dutch now

dank u well
dhak manaer
that must be really bad, wonder if u can even understand it ??

Very good dutch spc, dank u wel!!!

You've right about the figures of losing money and winning money in daytrading.
Also you have right about IG index related to stock trading....spread is a bit confronting, I can understand that.
But for the daily cash, the spread isn't a problem..the movement on the daily cash is big, in european markets about an average of 20-30points a day and US market such the DOW the movements are very big like 50-100 points a day.
So I can really favour you for IG Index . Exspecially for interday traders.

And you can hold your bet for a few days but always use your stopdistance so you will not lose your profit, from the days before.

ciao

spc · Sep 23, 2004

winod said:
Very good dutch spc, dank u wel!!!

You've right about the figures of losing money and winning money in daytrading.
Also you have right about IG index related to stock trading....spread is a bit confronting, I can understand that.
But for the daily cash, the spread isn't a problem..the movement on the daily cash is big, in european markets about an average of 20-30points a day and US market such the DOW the movements are very big like 50-100 points a day.
So I can really favour you for IG Index . Exspecially for interday traders.

And you can hold your bet for a few days but always use your stopdistance so you will not lose your profit, from the days before.

ciao

will check it out mate
cheers

Risk/Reward & Money Management

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