Spreadbetting Companies Want YOU to Lose? Any Thoughts - You Tube Video Link

This is a discussion on Spreadbetting Companies Want YOU to Lose? Any Thoughts - You Tube Video Link within the Spread Betting & CFDs forums, part of the Commercial category; [QUOTE=Jon41;2349146] Originally Posted by highbury fx I'm sure that if I knew the secret to quick riches I would share ...

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Old Jun 19, 2014, 1:32am   #17
Joined Sep 2013
charlesD started this thread [QUOTE=Jon41;2349146]
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Originally Posted by highbury fx View Post
I'm sure that if I knew the secret to quick riches I would share it all with you rather than spending my time on the beach
Are you being sarcastic? There's no secret to getting rich in the market, anyone can learn how to trade, there is no secret formula, but if you want a helping hand there's someone with years of experience to give you a head start, rather than reading all the books from scratch you can have someone teach you and you just listen. Sitting on the beach not telling (or teaching anyone) how you got rich on the markets isn't going to stop other people getting rich on the markets is it? By the way, if you really were rich enough to not have to work, it's true, sitting on your backside all day will soon get boring and tiresome, you'll need to preoccupy yourself whether its a recreational activity, running a business, or anything else to prevent yourself getting piles from sitting on your backside all day!
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Old Jun 19, 2014, 9:59am   #18
Joined Mar 2014
[QUOTE=charlesD;2349536]
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Originally Posted by Jon41 View Post

Are you being sarcastic? There's no secret to getting rich in the market, anyone can learn how to trade, there is no secret formula, but if you want a helping hand there's someone with years of experience to give you a head start, rather than reading all the books from scratch you can have someone teach you and you just listen. Sitting on the beach not telling (or teaching anyone) how you got rich on the markets isn't going to stop other people getting rich on the markets is it? By the way, if you really were rich enough to not have to work, it's true, sitting on your backside all day will soon get boring and tiresome, you'll need to preoccupy yourself whether its a recreational activity, running a business, or anything else to prevent yourself getting piles from sitting on your backside all day!
I didn't say that. The quote wasn't from me.
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Old Jun 19, 2014, 12:34pm   #19
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charlesD started this thread [QUOTE=highbury fx;2349682]
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Originally Posted by charlesD View Post

I didn't say that. The quote wasn't from me.
I don't believe you did. It was Jon41 said that. On top of that, thinking about it, what he said is contradictory. If you were rich enough not to have to work, why would you try to get a job with a broker anyway?

All things beside, I wouldn't sign up to his course anyway. I went to one of Greg Seckers seminars, at the end of which they try to get you to sign up for this weekend course costing £5000+!

I started spreadbetting with less than half of that, even though I lost it all, at least the people who signed up for that course lost even more than me before even placing a trade! And you can only learn by actually trading. I feel sorry for them to be suckered (Seckered) in like that, they could have taught themselves by reading books or online articles. It might have taken a little longer and more effort to learn but it is still available free.

And my conclusion after doing 1000+ trades, and blowing my account? Most of it is down to behaviour and psychology rather than actual technique, they can teach you technique but they can't teach you behaviour as easily, and these are traits that will determine your success, and no one can change a person's behaviour over a week-long course, they'll just have to learn to control it themselves and can only learn by losing money.

From the 1000+ trades made on my small account, at least half my losses must've been lost through the spread alone. As an hypothetical example say you start with £1000, make 5 trades a day 5 days a week for 40 weeks at average of £0.50 spread cost per trade, and after 1000 trades or 40 weeks (5x5x40) say you managed to break even after all those trades, you'd actually be down from £1000 to £500 as you've lost £500(£0.5x25tradesx40weeks) through spread costs on each of your trades!!! This is something I noticed, that overtrading amounts to losses. Now I doubt you'll learn stuff like this at their courses? Unless they tell you that the number of trades you should aim to place each week is 1-5?

I'll be starting again soon, so watch this space! Next time I'll be a winner! I've lost but haven't given up (yet)!
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Old Jun 19, 2014, 1:13pm   #20
Joined Oct 2013
[QUOTE=charlesD;2349800]
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Originally Posted by highbury fx View Post

I don't believe you did. It was Jon41 said that.......


And my conclusion after doing 1000+ trades, and blowing my account? Most of it is down to behaviour and psychology rather than actual technique, they can teach you technique but they can't teach you behaviour as easily, and these are traits that will determine your success, and no one can change a person's behaviour over a week-long course, they'll just have to learn to control it themselves and can only learn by losing money.

From the 1000+ trades made on my small account, at least half my losses must've been lost through the spread alone. As an hypothetical example say you start with £1000, make 5 trades a day 5 days a week for 40 weeks at average of £0.50 spread cost per trade, and after 1000 trades or 40 weeks (5x5x40) say you managed to break even after all those trades, you'd actually be down from £1000 to £500 as you've lost £500(£0.5x25tradesx40weeks) through spread costs on each of your trades!!! This is something I noticed, that overtrading amounts to losses. Now I doubt you'll learn stuff like this at their courses? Unless they tell you that the number of trades you should aim to place each week is 1-5?

I'll be starting again soon, so watch this space! Next time I'll be a winner! I've lost but haven't given up (yet)!
Hi Charles D

Re the cost of trading and overtrading - another myth to explode

I average 10 -20 trades a day - and have taken over 15k live trades over the last 7 -8 yrs

OK - I want low spreads and commission for sure - but the fact that my win ratio is between approx 62 % and 87% on batches of 100 trades - I never bother about my costs - as long as they are competitive - as an ex accountant - look at what it makes you - not just what it costs

For example i would prefer to pay a broker say $10k per month - and make say $20k+ net - then pay a broker only a third say $3k but only make 4 times as much net ie $12k

For me - if I ever pay my broker say $25k per month - I would be delighted - i should have had a really great month

If however i only pay him $4k a month - then - not so good

5 trades over a trading session of say 5 -10 hrs is nothing

I would not say scalp 50 -100 trades a day - thats too tiring and costly with diminishing returns

However if you are full time and put in over 6 hrs a day over say a 10 -12 hrs a day then anything from 10 -15 trades is acceptable. Over 25 trades - yes you might be overtrading unless you are a pure scalper

If I have 1- 4 bad trades a day for minus 1 to 5 pip loss - its no pressure - and part of the costs of doing business - just like your broker cost

Regards


F

Last edited by Forexmospherian; Jun 19, 2014 at 1:14pm.
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Old Jun 19, 2014, 1:58pm   #21
Joined Sep 2013
charlesD started this thread [QUOTE=Forexmospherian;2349814]
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Originally Posted by charlesD View Post

Hi Charles D

Re the cost of trading and overtrading - another myth to explode

I average 10 -20 trades a day - and have taken over 15k live trades over the last 7 -8 yrs

OK - I want low spreads and commission for sure - but the fact that my win ratio is between approx 62 % and 87% on batches of 100 trades - I never bother about my costs - as long as they are competitive - as an ex accountant - look at what it makes you - not just what it costs

For example i would prefer to pay a broker say $10k per month - and make say $20k+ net - then pay a broker only a third say $3k but only make 4 times as much net ie $12k

For me - if I ever pay my broker say $25k per month - I would be delighted - i should have had a really great month

If however i only pay him $4k a month - then - not so good

5 trades over a trading session of say 5 -10 hrs is nothing

I would not say scalp 50 -100 trades a day - thats too tiring and costly with diminishing returns

However if you are full time and put in over 6 hrs a day over say a 10 -12 hrs a day then anything from 10 -15 trades is acceptable. Over 25 trades - yes you might be overtrading unless you are a pure scalper

If I have 1- 4 bad trades a day for minus 1 to 5 pip loss - its no pressure - and part of the costs of doing business - just like your broker cost

Regards


F
Hi, well it seems you are doing way better than break even, but had it not been for the spread, you probably would've made twice even thrice your 15K? You must be a valued customer to your broker generating a lot of commission for them.

In regards to placing 10-20 trades a day, you must be using 5 pip stops, with a 10-20 pip limit? rather than placing 10 trades with a 5 pip stop and 10 pip sell target, for total profit of 50 pips, I'd much rather place one trade with a 40pip stop and a 90 pip profit target - much less work and effort.

I've tried micro stops too, and I have traded in excess of 10-15 per day, but for me this is a losing technique, If it works for you, then fine, but I doubt I'll go back to this method. A 5 pip stop on the Dow at say 17000 represents only a 0.029% movement in the underlying, it's just too close and you always get stopped out very quickly within the minute from volatility, unless you're lucky to hit a turning point which is rarely. Plus regarding micro stops I found too that if you're going to place 20 pip or 25 pip stops on Dow, you might as well save money by setting them at 10 because there isn't much difference, and you just lose money less quicker.

In fact setting stops has been a crux for me, I have yet to find an optimised level to set the stop, all that is true so far as I can tell, is the further you place the stop, the longer you stay in the trade. I've been thinking a stop representing a 0.25%-0.35% movement in the underlying was about right, which for the Dow at 17000 would be a stop of between 42.5 to 59.5 pips, but I have not fully tested this strategy out yet because with a small balance and even using the minimum stake size, the 42.5 pip stop would be risking too much of my account balance, but having also traded the Nasdaq100 a 10 pip stop represents a 0.26% movement in the underlying at say Nasdaq100 at 3800, so whenever I trade Nasdaq100 risking the same 10 pip amount, I tended to stay in the trade longer than the Dow. I too have most recently only been placing 10 pip stops, I sometimes tried 5 pips but always got stopped out almost instantly, I sometimes stretched to 15 or 20, but found I just lost money quicker than sticking at 10. (mostly on the Dow).

Next time I'm starting with a slightly larger starting balance so I can set 30-40 pip stops on the Dow, while only risking 3-4% of my balance, see if it gives better results, while only placing 1-5 trades per week.
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Old Jun 19, 2014, 3:36pm   #22
Joined Oct 2013
Hi Charles D

I have only traded FX - so have no knowledge on other instruments - not even Gold or Silver

With regards to I'd much rather place one trade with a 40pip stop and a 90 pip profit target - much less work and effort.


Well I certainly would not - ie its inefficient and takes too long to make a RR of 2

You are talking maybe 2- 8+ hrs to make those pips in FX - and the same RR I can make in under 15 mins - ie efficient and can therefore make more trades with more money

I only trade to make money - not bothered about number of pips really - only pound notes - so for me a 13 pip move on say 6 -10 lots in 10 mins - is the same money wise as a 80 pip move on 1 lot - with a similar risk

My daily target is 50 pips - for years it was 25 and then 30 pips - but I then realised with 30% stakes left on with stops in profit - can make me more pips and money in many cases

Stress is not really a problem nowadays - as long as I keep under 10 lots - on 20 -25 lots yes had palpitations and sweaty hands and worry

But after well over 4000 scalp losses - you get used to the down side - and just play probabilities with advanced MM and normally everyday - you make money - well 95% of the days.

Stress for me would be swing trades without stops in profit - they are just "set up " for the market to take your money

I have no time for the Banks and commercial world of trading - its too inefficient for me and outdated as far as I am concerned -

Retail trading is another ballgame - and we have so many advantages compared to the large players - even though we can really only follow

Good Luck on your journey and if you want more tips and methods etc on FX - well no problem - just fire way

Regards


F
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Old Jun 19, 2014, 3:56pm   #23
Joined Mar 2014
[QUOTE=Forexmospherian;2349814]
Quote:
Originally Posted by charlesD View Post

Hi Charles D

Re the cost of trading and overtrading - another myth to explode

I average 10 -20 trades a day - and have taken over 15k live trades over the last 7 -8 yrs

OK - I want low spreads and commission for sure - but the fact that my win ratio is between approx 62 % and 87% on batches of 100 trades - I never bother about my costs - as long as they are competitive - as an ex accountant - look at what it makes you - not just what it costs

For example i would prefer to pay a broker say $10k per month - and make say $20k+ net - then pay a broker only a third say $3k but only make 4 times as much net ie $12k

For me - if I ever pay my broker say $25k per month - I would be delighted - i should have had a really great month

If however i only pay him $4k a month - then - not so good

5 trades over a trading session of say 5 -10 hrs is nothing

I would not say scalp 50 -100 trades a day - thats too tiring and costly with diminishing returns

However if you are full time and put in over 6 hrs a day over say a 10 -12 hrs a day then anything from 10 -15 trades is acceptable. Over 25 trades - yes you might be overtrading unless you are a pure scalper

If I have 1- 4 bad trades a day for minus 1 to 5 pip loss - its no pressure - and part of the costs of doing business - just like your broker cost

Regards


F

It's not a myth. its your cost.

if you do 10 round turn trades a day on a 1 pip price in £5 per point you are paying £50 in spread. You now need to make 10 points of spread to break even. If you don't you're losing money, if you do, you're making money. You don't need to be an accountant to work that out.

I don't know you but I don't need to in order to tell you that 20 trades per day is overtrading. It's too many trades and you are paying more spread than you need to. Even if you are making a good return it wouldn't be much different than if you entered in to a position and put your stops and limits a fair distance away and hope that your punt it correct. if it is you make good pips on your limit if it isn't you lose your money through the deal being wrong and not because you're paying a lot of pips.

I don't understand why you'd not be happy making a ROI of 4:1 on a £3k investment but would be happy making a ROI of 3:1 on a £10k investment. Use the first model but up your stake.

Firms like WorldSpreads and MF Global went bust because they couldn't get enough clients and ultimately had to dip in to segregated client funds to bank roll their operations. Both MF and WorldSpreads (and Cantor Index) offered Spread Free products in the months leading up to their collapse as a last ditch effort to acquire clients. It didn't work because they then made it too difficult for clients who picked good levels to trade, they kept on being rejected and put on manual intervention. Spreadbet firms make most of their money from the spread (you wont believe this but its correct) they need to quote a spread in order to retain the advantage when clients deal. The good s/b firms will have plenty of clients dealing on spreads that give both the s/b firm and client a chance to make money fairly. Offering a spread free product makes a good headline but the dealing desk wont be giving money away for nothing, they will use tactics that will give them back the advantage they have lost by not charging a spread.


CharlesD made an excellent comment in his previous post where he mentions that during the life of his account he has pretty much just lost the spread he has paid. This is fairly typical of spread bet clients but it is testament to the skill of the retail trader that he would hold his own when it comes to trading were it not for the cost of the spread he has to pay.
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Old Jun 19, 2014, 11:13pm   #24
Joined Oct 2013
[QUOTE=highbury fx;2350028]
Quote:
Originally Posted by Forexmospherian View Post


It's not a myth. its your cost.

if you do 10 round turn trades a day on a 1 pip price in £5 per point you are paying £50 in spread. You now need to make 10 points of spread to break even. If you don't you're losing money, if you do, you're making money. You don't need to be an accountant to work that out.

I don't know you but I don't need to in order to tell you that 20 trades per day is overtrading. It's too many trades and you are paying more spread than you need to. Even if you are making a good return it wouldn't be much different than if you entered in to a position and put your stops and limits a fair distance away and hope that your punt it correct. if it is you make good pips on your limit if it isn't you lose your money through the deal being wrong and not because you're paying a lot of pips.

I don't understand why you'd not be happy making a ROI of 4:1 on a £3k investment but would be happy making a ROI of 3:1 on a £10k investment. Use the first model but up your stake.

Firms like WorldSpreads and MF Global went bust because they couldn't get enough clients and ultimately had to dip in to segregated client funds to bank roll their operations. Both MF and WorldSpreads (and Cantor Index) offered Spread Free products in the months leading up to their collapse as a last ditch effort to acquire clients. It didn't work because they then made it too difficult for clients who picked good levels to trade, they kept on being rejected and put on manual intervention. Spreadbet firms make most of their money from the spread (you wont believe this but its correct) they need to quote a spread in order to retain the advantage when clients deal. The good s/b firms will have plenty of clients dealing on spreads that give both the s/b firm and client a chance to make money fairly. Offering a spread free product makes a good headline but the dealing desk wont be giving money away for nothing, they will use tactics that will give them back the advantage they have lost by not charging a spread.


CharlesD made an excellent comment in his previous post where he mentions that during the life of his account he has pretty much just lost the spread he has paid. This is fairly typical of spread bet clients but it is testament to the skill of the retail trader that he would hold his own when it comes to trading were it not for the cost of the spread he has to pay.

Hi Highbury FX

There is a cost to every trade yes - but you are not looking at it in a correct perspective

If Trader A has say at 70% success rate and his average RR on wins is 2 - - then if he takes 10 trades over say 3 days - his average result would be - 7 wins x 2 and 3 losses x 1 - net result then 14 - 3 = 11 - so if he uses a 1% stake - in theory he increases his capital by 11% - over 2 days

If Trader B is a scalper with 70% and takes say 20 trades in a day - but his average RR is 1.5 and not 2 - his average result in just one day will be 14 wins at 1.5 against 6 losses at 1 net result - is 21 - 6 = 15 - so 1% stake in theory he increases his capital by 15 % - in one day

The extra trades costs are already included in the RR's and are really minimum

ie I dont mind a cost of 30% if I make say $20k - thats better than having a cost only 10% and only making $10k - ie NET $14k against less trades and lower cost - NET $9K

Costs in trading are not just linear - i dont know whether I might on make 7 pips with a 1 pip cost on one trade - or 30 or 300 pips on a 1 pip cost - because only my stops are fixed - never my targets

Net cash is King - not just low costs - but with lower receipts as well

Would you now agree with that ?

Or would you prefer to think just 1- 5 trades a day are good ???

There are so many other advantages of multi trading - but rarely am I in more than 2 trades at the same time

I might agree with you 20 -25 trades a day ( manually ) could be looked upon as excessive and over trading - but last time I made 24 trades in day on July 4th 2013 - I made 409 pips

On average I probably do 13/14 trades a day - and if I have a good AM session and do over my target I might only do 8 trades in say 4 hrs and stop.

The markets are dynamic - a trader needs to be dynamic - no fixed targets - only fixed stops - no fixed number of trade - all depends on the movements etc

Back to this cost myth

To repeat - I would prefer to be paying a broker 30% cost of my trades and make a higher net figure - than pay only 10% costs and only make 50% or 70% of the higher net turnover.

ie which company would you sooner have

Company A - all costs only 60% of turnover - but turnover say $1 million

Company B - all costs 90% of turnover - but turnover $50 million

Cost in isolation can be wrong used to make an incorrect point - and I am sure you know that.

Here we have swing traders with stops of 40 -70 pips and win rates of only 45 -60% and taking days to make 100 pips - and then they worry about a 2 pip cost of trading - when every loss they are down by say 50 pips or so- and have wasted 2 -10 hrs finding out

So inefficient

I want to know when I am wrong within 1 - 5 mins normally

How many books and guru's etc tell you that ? because I have not read many as normally traders do not have business and accountancy backgrounds - and just listen to basic - "keep cost as low as possible" -

Sometimes the bigger picture - like in trading is important - but please dont think a trader should only take 1- 3 trades a day - NO as far as I am concerned it inefficient and wrong.

But that's just me - and i am different to 90% of all other FX traders...........

Regards


F

Last edited by Forexmospherian; Jun 19, 2014 at 11:23pm.
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