New to Spread Betting Help Me Pls !!!

[dpelliott]

Hi i have just started virtual spread betting on indicies mainly Ftse 100, DOW and NASDAQ and occasionally look at individual stocks.

I am now deciding which company to use.

I am not look to trade big as dont want to get burnt big , so probably going for a deposit account and put between £200 - £300 max in and bet at a few pound a point at most + want to use stop losses to limit my risk.

I have won quite often using the virtual trader on cityindex and after 3 days i am up £100 approx.

Any ideas which would be best as the spread seem to vary alot with some following the market and some not. I am trading from charts and using technical analysis so the spread being close to the charts is quite important to me.

Any ideas

David

 

[dpelliott]

I am planning to use stop losses so i can only lose approx £40 a trade and was hoping at £2 per point that should be ok.

What do you guys think??

 

[axthree]

Capital Spreads seem to be well thought of. Their prices are in the main pretty close to the underlying.
If you are going to SB I wold echo the advice to use someone who allows VERY small positions.
I started a while back at £1 per point with a start up of £500.
After some stupidity on my part I lost half of it in two trades
I then topped the acct. up to £1500 BUT STAYED AT £1 PER POINT.
The extra margin meant that I could take two or three positions at a time.
I suffered some drawdown on that but could stay in the market.
I left it some time before I started to increase my stakes.
IMHO, stay small, the losses sting less. Don't take a position just because you want to be in the market. SB is not the road to riches but if you can make a few pounds that way for a decent amount of time you could be in a position to increase your stakes, with increased stakes come bigger losses when you get it wrong, which you will do sometimes
Follow these boards. You'll get lots of info. and encouragement from some. Once you start you're on your own but remember that you can lose your own money far cheaper than paying a fund manager to do it for you.

 

[zarif]

my friend imho - I say Capital spreads as they are very good and also a friendly person at the end of the phone unlike other sb co's arrogant staff.

 

[ben_catt]

If I were you I would wait before trading for real.

Your problem at the moment is that you have way too little capital to start trading at £1 per point. I would suggest you start saving to get a £1000 to £2000 pot to start with. In the meantime, keep on practising with your virtual account to get an idea of the correct kind of trading style for you.

I know what it is like to be eager to start trading with a small amount of money. Believe me, with a starting pot of only ~£300 you will be wiped out pretty quickly.

Why not use this money to buy a few books and read up on the subject first? You can always sell them on later to get some of your money back....

 

[ben_catt]

Another point to consider:

The Turtles made an average of 80% compunded interest per year.

If you could do the same starting with £2000, this is what you would have year-by-year.

0 2,000.00
1 3,600.00
2 6,480.00
3 11,664.00
4 20,995.20
5 37,791.36
6 68,024.45
7 122,444.01
8 220,399.21
9 396,718.58
10 714,093.45
11 1,285,368.20
12 2,313,662.76
13 4,164,592.97
14 7,496,267.35
15 13,493,281.23

So, there you go. A millionaire after 11 years, £13.5m after 15.

Basically, what I am saying is - don't rush into it. Get a decent pot of money together at the beginning, put it to one side and think of it as "fun" money. Don't go jumping in at the deep end and trying to trade for a living.

What does everyone think? Is 80% return per year a reasonable figure for spread betting or is it way too high?

 

[aussietrader]

ben_catt,

If you are going to be a long term trend follower, then achieving an average return of 80% is easily achievable. Of course there will be years where you make less and others where you make a lot more but it can be done.

Since I have been trading spreads with my own trend following system (since 1998), I haven't had a losing year yet and have had very good return rate. Still another few years to get to 15 million though!!

IMHO if you are prepared to be a long term trader then spreads are the best way of trading because are tax free and easy to manage risk by bet size.

Cheers

AT

 

[stevet]

aussietrader

i suspect you dont mean trading spreads - which is where you to trade the diffence between two different contracts - and where there is a direct or indirect connection

i think you must mean spread bettting?

but yes - trading spreads - you make 100's of percent return due to leverage which is even greater than outright futures trading positions due to this hedged type of trading

i doubt any percent return on significant captial is possible with spread betting - but thats only becuase the spread betting companies tell me that they dont have any clients who make money over time - maybe they are lyingt to me - the *******s!

spreadbetting is of course tax free if you did make a profit on spreadbetting, since the tax man gets to see the books of the spreadbetting companies and he knows that he would not make diddly on profits of the punters - thats why he likes to take his money up front on the value of the bets placed - at least in the UK

ps hows the book selling going?

 

[aussietrader]

Stevet,
I did mean spread betting but also understand what spread trading is. In Aust, I refer to it as spreads trading because betting is such an ugly word to the uninitiated.

I figure that most SB traders are day traders or such and no one should use such wide bid/offers to day trade. It is madness.

However, I can assure you that there are people who make money from spread betting - perhaps they trade so infrequently (or maybe in small size) that the co's you speak with don't even notice them. Or maybe they trade with other companies - spread betting (and CFD's) are suddenly getting very popular around the word and new shops are springing up all the time.

Have a great day!

AT

BTW - my football team finally won a grand final after 24 years of trying - have a dinner tonight to celebrate. Will try not to **** post ( kinfd of like drink dialling on you mobile - who, what and where!!) later but no promises! - AT

 

[stevet]

aussietrader

yep - i guess 80% on one $1 trade a year is possible!

buy us all a drink when you get to that $15million - one thing about you down under people - you know the right temperature for beer!

 

[anley]

Go with Finspreads and risk pennies a point.

Risking £40 a trade at £2 a point will mean you go broke for sure, well maybe not for sure but certainly up in the 90% range. Remember to factor in the bid-offer spread which is I think 4 points these days in FTSE, so that actually reduces your 'tick risk' down to 16 points.

'Tick risk' is a word that I've just made up but I think you can understand what I'm saying!

 

[ben_catt]

To risk £40 a trade, I would probably bet 40p a point.

Finspreads would probably be the ideal betting platform in that case but the problem with this is that they do not allow you to place stops unless you are bidding a minimum of 50p a point so in a severe market move in the wrong direction would mean you may end up losing a lot more than £40.

The best thing to do would be to wait and save till you have about £1000 and then you can afford to risk £50-100 per trade without wiping out all your capital in one or two trades.

 

[anley]

Ben, good point about the stops and Finspreads I hadn't thought of that.

dpelliot - Perhaps it's wrong to think of your spreadbetting as a real money making adventure with a small bank. %'s don't really come into play unless your capital is large. For example 10% on a million is a lot, 200% on £200 is not that much.

However a few hundred pounds as a stake can set you up for some excellent profits over the longer run because if you can make 'good' money as a % then look to get a bigger bank and then the £'s will come even if you make less of a % return.

 

[debs]

Hi i have just started virtual spread betting on indicies mainly Ftse 100, DOW and NASDAQ and occasionally look at individual stocks.

I am now deciding which company to use.

I am not look to trade big as dont want to get burnt big , so probably going for a deposit account and put between £200 - £300 max in and bet at a few pound a point at most + want to use stop losses to limit my risk.

I have won quite often using the virtual trader on cityindex and after 3 days i am up £100 approx.

Any ideas which would be best as the spread seem to vary alot with some following the market and some not. I am trading from charts and using technical analysis so the spread being close to the charts is quite important to me.

Any ideas

David

Hi David,

You say that you have been 'mainly' practising on the indices (DOW, NAS and FTSE). However, I do not think you will be able to trade these for real if you only have a £300 deposit account. The margin required by finspreads for the daily cash DOW is £250 for each £1 stake. You would barely have sufficient funds to cover the margin. The margin requirement for shares is alot less but you say above that you have only "occasionally" looked at shares.

I agree with other posters here that you need to do a bit more research before risking your money. After that it would be a good starting point to open a Finspreads account, where you can trade as low as 1p a point for the first 8 weeks. This will give you more time to learn about how spreadbetting and trading works. If you request an application form from Finspreads, you will receive a booklet that explains how margin, spreads and stake sizes etc work.

Best of luck, Debs

 

[PeteA]

Hi David,
If you are new to spreadbetting, I would recommend starting with FTSE350 shares rather than indices, as statistically beginners have been shown to have more chance of success this way. People get drawn to the indices because the spreads are narrower, but IMHO it is far harder to predict where the FTSE100 index will go than an individual share. Remember, most people loose in this game. Suggest best to pick 2 or 3 shares you have good knowledge of - then you at least have an advantage to start with.

Personally I find Capital Spreads the best to use. They have narrower spreads than most of their competitors, a straightforward easy to use platform and staff that are both helpfull and friendly.

 

[stevet]

hi PeteA

could you kindly post the link to those statistics or else let me know where its possible to access them

 

[PeteA]

stevet,
I am not aware of any actual statistical figures on this, but remember this comparison in reference to day trading using spreads from an article in the Times sometime last year and somewhere else in print which I can't remember. All a bit vague, I'm afraid. I have also come across several traders who have come to the same conclusion. My personal experience of spread betting is very limited. But I have done 20 years part time traditional investing and a couple of years more or less full time position trading.

It's worth mentioning that Simon Denham from Capital Spreads said in the Capital Spreads board in this forum (post 707):-
"For day trading (apart from FX and daily shares), it is difficult to make money consistantly in spread betting".

Can anyone with more experience of trading spreads let us know which has given their best results - indices or individual shares? Length of time held would also be usefull.

 

[Trader333]

PeteA,

Can you clarify what you mean in your post because trading spreads is not the same as spreadbetting ?


Paul

 

[stevet]

PeteA

your comment

"as statistically beginners have been shown to have more chance of success this way"

does not seem to be supported by this next comment of yours

" I am not aware of any actual statistical figures on this"

and as has been pointed out - you seem to have confused a specific and potentially very profitable type of trading - spread trading ( which can only be done with an index or corportate debt -not stocks, except possibly pairs trading, but is a bit of a long shot to call this spread trading ), so you seem to have confused spread trading with spread betting?

you also commented

"Personally I find Capital Spreads the best to use. They have narrower spreads than most of their competitors, a straightforward easy to use platform and staff that are both helpfull and friendly."

but then said

"My personal experience of spread betting is very limited" and asked for more experienced views

so you may want to qualify these points further

but anyway - my own experience of trading spreads would confirm that it is ****ing great with indexes( indicies for those in the know) and i dont do corporate debt - so cant confirm its relationship to stocks - but i personally would not touch corporate debt

and i do understand from spreadbetting personel - that no one makes money over time trading financials, be it indexes (indicies) or stocks ( i dont know anyone on the sports side)

hope this helps

 

[zigglewigler]

Hi i have just started virtual spread betting on indicies mainly Ftse 100, DOW and NASDAQ and occasionally look at individual stocks.

I am not look to trade big as dont want to get burnt big , so probably going for a deposit account and put between £200 - £300 max in and bet at a few pound a point at most + want to use stop losses to limit my risk.

Any ideas

David

Two words jump out at me, 'started' and '£300'. That's £300 of good trading books that'll give you more valuable experience that sp**king your small pot.