An interview with highbury fx

Would you please make a quick introduction about yourself ? Thanks .

I started in the interbank market whilst on a gap year in Sydney in 1987 with Prebons on the spot aussie desk. Moved back to London couple of years later with Prebon London before going to Tulletts both in London and New York, then moved to a broker in Luxembourg half owned by Tulletts and spent a few (very) happy years there doing usd/dem went to IG then another spread bet company in London and finally to where i am now, a fca and cysec regulated stp spreadbetting and cfd company. I run the company as ceo - we're busy and profitable and continuously struggling to stay compliant in this ever increasingly difficult industry. i don't bet (except poker).

Previously said no to Timsk when asked to do an interview because i don't want my identity to be known. I've seen people i know step out of the shadows on trade2win and get shouted down and i don't want that to happen to me but i'm happy to answer what i can, when i can.

thanks.

Thanks , no thats not a typical interview just a few questions about the industry , simple answers will do .

How many traders use stops ?

How many traders scale-in/average down ?

good question.

We took a look at all of the open positions we currently have and found that 74% of them have a stop loss order attached and 77% have a limit order attached.

leave this with me.. we'll figure out how to extract this info and i'll update you once we have it.

Hi highbury

Have you ever heard of anybody paying tax on spread betting winnings?

Thanks

Great much appreciated , thats generous of you .


How many traders with small accounts are constantly profitable ? or whats the percentage of small accounts are constantly profitable ? Difficult to answer that one now maybe but a ballpark will do .

Whats small ? lets say few grands max .

yep.

the key always used to be what you declared as your occupation on the spreadbet application form. if you put down 'trader' or similar then the revenue may have considered it to be your source of income and taxed you regardless of how little you may have won.

I knew of someone about 10 years ago who spreadbet fx for a living and done very very well but paid an estate agency £25k to put him on their books as a salesman so he could declare that on the application form.

I think the key thing here is if you are not spreadbetting profitably or not making a decent wage from spreadbetting you should not put down 'trader' as your occupation. You could create some problems further down the line for yourself.

I don't think spreadbetting profits will be taxed to the mainstream any time soon simply because spreadbet losses will then have to be tax deductible. You don't need me to tell you that more money is lost spreadbetting than won.

Have you came across an account thats grows exponentially - compounding - ? for example from 2K to 50K . And not by a one lucky trade .

Is it rare ?

if you're talking life changing money its super rare but its amazing when it happens.. you're seeing someones life change in front of your eyes.

typically they would need to go on an amazing run for a few months and have balls of steel. I had a guy deal with me for about 8 months who turned £40k in to over £4m. he was picking tops and bottoms for fun every day for months. think about this though, at some stage he had turned his £40k in to £100k and then £200k and then £600k and then £1.7m... not everyone has the courage to not cash out along the way. he was trying to get to £10m to start a foundation but never made it and done the lot. it was not nice seeing the downfall.

enough people manage to turn £5k in to £25k+ but they don't walk away, they keep going and that's what you need to remember, that we have the spread on our side and more often than not that's what tips the balance our way. if someone has run 5k to 25k and not cashed out then inevitably they end up giving it back. lots make money at some stage but not many withdraw and walk away.

Cashing out is important

How many super active traders you have ? What i mean by active is trading 100s of times per day . And are they profitable ?

lets look at accounts for the first 9 months of 2016 that came directly to us and funded with $1,000 to $4,999 in their account. we saw that the leverage they used was typically 11:1 and they won 54.98% of their trades. Unfortunately only 12.27% went on to be profitable during the life of the account.

this shows that retail traders are good, no one denies that, were it not for the spread a lot of spreadbet firms would really struggle to survive, but it also tells us that our clients losing trades lose more than their winning trades win even though they may win more often than they lose.

don't move stops.

How spread traders are doing ? Are they better than the rest ? What i mean by spread traders : brent vs wti , calendar spreads , fixed income spreads - non directional betting - .