Can you really make money spread betting

[Phil Mibbutz]

Losing £300 isn't really proof that your system doesn't work.

 

[anley]

Losing £300 isn't really proof that your system doesn't work.

Agreed. Nor is losing 9 times out of 10 proof that a system doesn't work. In fact that might be a great strategy. Lose 9 x £1000 and make 1 x £20,000. Often you'll find it's not about win/loss ratio rather how much you lose when wrong but how much make when right.

 

[gle101]

Hi bluedental - The only way to lose the game is to get knocked out. But there are many ways of making a profit, as long as you have preserved some capital to do it with. You need to develop a plan, back-test it, modify it, back-test it more, then maybe paper-trade it to either destruction or profit: if its profitable, trade the plan with tiny stakes (because the game changes when you put real money in), then ramp up your stakes until you're making a decent income. I hope to be doing this myself soon.

Reading the right threads and books accelerates progress but cannot carry you as a passenger. I humbly offer my Rules of Trading for your consideration
The Trade
1. Trade with the trend – no trend, no trade
2. Plan the trade, trade the plan
The Entry
3. Wait for the signal
4. When the signal comes, don’t wait
5. A weak signal is still a signal
6. Trade what you see, not what you think
The Exit
7. Never let the profit go back into the market
The Stop-Loss
8. Set a stop-loss on the entry
9. Always obey the stop-loss
10. Don’t wait for the stop to be hit, close or cut losers early
The Sins of Trading
1. Trading against the trend
2. Trading without a stop-loss

The Rules of Trading will keep you alive, the Sins of Trading can kill you. Don't give up.

Very good, but what about Money Management? The no. 1 rule in my own opinion. Most of the newcomers fail in this regard . Only 1-2% of the capital (included stop loss) on the table. One can manage with this kind of small money. Find a SB or a CFDs broker that offer micro lots. I agree, £1 per bet is definitely too much for a newbie.

 

[tomorton]

Hello gle101 - You're very right to highlight money management. I don't mention this explicitly in the rules but my policy is to follow the 1% rule, such that no stop-loss will lose me more than 1% of my total capital. I can recommend this to anyone - apart from anything else, it will also prove whether you have sufficient capital to trade.

This is a well-known rule but I find that I am often risking less than 1%: this is fine, but means that I am capping my gains. I am thinking the rule ('never risk more than 1%') should have a converse rule which says 'but always risk the full 1%'. Does this sound correct?

 

[gle101]

Hello gle101 - You're very right to highlight money management. I don't mention this explicitly in the rules but my policy is to follow the 1% rule, such that no stop-loss will lose me more than 1% of my total capital. I can recommend this to anyone - apart from anything else, it will also prove whether you have sufficient capital to trade.

This is a well-known rule but I find that I am often risking less than 1%: this is fine, but means that I am capping my gains. I am thinking the rule ('never risk more than 1%') should have a converse rule which says 'but always risk the full 1%'. Does this sound correct?

You got a point there. However, if one is in bad "shape" it might be wise to trade for less than 1%, rising it to maybe 2%, when things are really going well.

I would also like to mention the importance of the hardware setup, such as computers, monitors and an extra ISP, if the one you are using fails. This goes for the brokers as well.

 

[bluedental]

Ok, as a newcomer, should I be looking to say have 10 open positions at the same time and expect the majority to be down but rely on the winning trade to cover the losses? If so, what sort of starting capital is realistic and would forex be a better market to start in rather than shares or indices?

 

[gle101]

Ok, as a newcomer, should I be looking to say have 10 open positions at the same time and expect the majority to be down but rely on the winning trade to cover the losses? If so, what sort of starting capital is realistic and would forex be a better market to start in rather than shares or indices?

I would concentrate on one position. 1-2% of you capital including the stop loss. If you calculate on that, you will find out that you can't use much of your capital in the market at the same time. Why is that, because you will have the leverage and statistical variations that will account for a string of losses. Forex trading will not help you if you are a newcomer.

 

[options]

Ok, as a newcomer, should I be looking to say have 10 open positions at the same time and expect the majority to be down but rely on the winning trade to cover the losses? If so, what sort of starting capital is realistic and would forex be a better market to start in rather than shares or indices?

No, no. no.

In fact no 9 times.

1 trade only.

You need to work on getting the direction right.
How many times had you right direction of whatever it was you were looking at before you started trying to trade with your money?

And I mean from the hard right edge of the chart?

Are you using the right time frame for you?

Where would you be now had you done the reverse of what you did?

Your 300 quid would be worth more.
So yes, you can do it with 300 quid. Although for you, not this time.

Only trade one thing. Say the ftse cash at the lowest amount you can. It will only go up, down or sideways.

But I would say you need to demo trade a bit more before committing any real money. And if you can't get it right with paper money, stay well away.

The chances of getting 1 trade right to cover the 9 that fail are very, very slim. In fact The odds are non existent. You might even get 3 right out of ten. Only slightly better odds.

 

[neil]

Glass bottoms

Ok, as a newcomer, should I be looking to say have 10 open positions at the same time and expect the majority to be down but rely on the winning trade to cover the losses? If so, what sort of starting capital is realistic and would forex be a better market to start in rather than shares or indices?

After a close reading of your situation and aspirations one is inclined to conclude that you would derive greater satisfaction from taking your £300 to a suitable Freehouse and getting pissed by sampling the wares therein

 

[bluedental]

A tempting thought but the advice from the other guys has been great and it seems the best thing for me and any new trader is to keep practising before entering the real market. I'll be honest, I thought it was going to be easier than it is, too nieve!!

 

[neil]

Seriously though.....

A tempting thought but the advice from the other guys has been great and it seems the best thing for me and any new trader is to keep practising before entering the real market. I'll be honest, I thought it was going to be easier than it is, too nieve!!

Seriously though - listen to the guys. The advice is free. Keep practising and asking questions as you go.

 

[gle101]

A tempting thought but the advice from the other guys has been great and it seems the best thing for me and any new trader is to keep practising before entering the real market. I'll be honest, I thought it was going to be easier than it is, too nieve!!

You are smart, you have asked questions before the losses amount to huge figures. Now you can regroup and progress in your trading. The trading experience is not free, one just has to keep the learning cost down, until one is experienced enough to be on the other side of the fence.

 

[Phil Mibbutz]

I'll be honest, I thought it was going to be easier than it is, too nieve!!

Spread betting wouldn't exist if it was easy (for punters) to make money.

 

[bluedental]

That was part of my original question. I am trying to find out whether given time and practice, you can actually make money spread betting as opposed to buying shares and waiting for the price to go up before selling. With my limited experience, I have lost £300 but had I brought shares the traditional way and sold today, I would have only lost £100 but still have £200 in my hand! I understand leverage and the massive gains possible on spread betting but I am sceptical and would love to hear from somebody who is consistently making money on spreads and making a career from it.

 

[gle101]

That was part of my original question. I am trying to find out whether given time and practice, you can actually make money spread betting as opposed to buying shares and waiting for the price to go up before selling. With my limited experience, I have lost £300 but had I brought shares the traditional way and sold today, I would have only lost £100 but still have £200 in my hand! I understand leverage and the massive gains possible on spread betting but I am sceptical and would love to hear from somebody who is consistently making money on spreads and making a career from it.

If you cant make money in the long run buying shares, you will not make it in spread betting either. There is no short cuts in trading. Do not trade with "scared money", you will definitely be on the losing side.

 

[tar]

If u have system that offers u an edge over market then u can make 1000 pound to a million within some time !!! it is all about system , do u have it ? if not look 4 it and u may find it , like warren buffet

 

[Lee Shepherd]

That was part of my original question. I am trying to find out whether given time and practice, you can actually make money spread betting as opposed to buying shares and waiting for the price to go up before selling. With my limited experience, I have lost £300 but had I brought shares the traditional way and sold today, I would have only lost £100 but still have £200 in my hand! :!:I understand leverage and the massive gains possible on spread betting but I am sceptical and would love to hear from somebody who is consistently making money on spreads and making a career from it.:!:

You have, you just completely sidestepped him because he didn't say something you liked or that caught your eye. His name is Lee Shepherd and wrote two posts on the first page of your thread.

Try this one:

:clover:Spreadbetting is easy and can be started off with £300, just by placing pre-market orders and for only 15 minutes work a day you could earn an extra £500 plus per week.
Trading is not as easy as it first sounds but after 2 weeks of hard studying the market, and I mean hard study, like 2 hours every day you could easily pick it up if your willing to learn.:clover:

 

[Splitlink]

Spread betting wouldn't exist if it was easy (for punters) to make money.

Neither would broking, but broking needs much more money than spreadbetting does, therefore the possibility, even probability, of losing more money by the latter means is greater.

As it happens, I do both. My share portfolio varies by several hundred pounds when the price changes by a penny.

Not so my spreadbetting account. It depends what you want from each but, I'll tell you, if you believe that having an account with a broker is safer than with a spreadbetter, you'd better think again. It's true that you hold the shares, I'm not suggesting that the broker is crooked in any way but if he does not want to take them when you want to sell, that is a different story. At least, until the price is right----for him.

Everything is as safe as houses! That's a true saying, isn't it?

Split

 

[bluedental]

Sorry Lee, didn't mean to sidestep you but thanks for the good advice. I looked at pre market orders and spoke to Ig about them. I came to the conclusion that it might be better to place an order to open the night before just before the market closes in order to gain from the folowing days market opeening price.

Any thoughts on that?

 

[normbeef]

Learn by doing...

a good demo will look the same as the real market... the only problem is that you are not testing your NERVE... never forget that how you act and make decisions under real stress is the measure of your worth...

Imagine being asked to land a 747 on a simulator, you would be emotionally different to trying to land a real one !!!

good luck...