I am about to start spread betting with D4F very soon and plan
initially to start very small (1 £ pp). I was just interested to hear
how much risk other people are taking. So what size bet are you
I started three months ago with D4F and found that at £1 it was just impossible not to lose money. The market has to move too far too make it worthwhile. I bet £4 now and am much more likely to win. At £1 a point you have to hold on too long and alost inevitably the market moves against you and then you hang on hoping for it to go back - which it doesn't.
The secret lies in the stops and cutting losses in time.
Imran, I suggest you start with whatever feels comfortable, but watch the instrument you are trading (and all the goes with it) rather than your balance - whether or not you are in profit should have no influence on your trading decisions, because if it's about the money then it's highly likely you will come unstuck. It's important that you pick up good habits at this early stage. Best of luck.
I am still on £1 a bet after 3 moinths, reason being I can't find my style for spreabetting, so as said above, staying at £1 until consistently profitable.
When you progress to bigger stakes (and IF I ever do) you might think about the 1% rule - this is that whatever stop-loss you use it shouild not take away more than 1% of your total trading capital. e.g. if your trading capital is a round £10,000 to make it simpler, you would not want to lose more than £100 on any one position. If you're trading an index and you determine not to let the position go more than 20 points against you, that would suggest your max bet size would be £5, so that your max loss would still be 1% of your £10,000.
1% is a figure commonly used. When you get more consistent, you might venture to up it somewhat, but don't lose sight of the ground, it can be a long fall.
Excellent post Tomorton. The key is determining the maximum loss before entering a trade by working out where to position your stop and how many pints away from your entry price this is.
Then, what % of your trading capital you want to risk, divided by number of points gives stake size. You may find on some markets this is £1pp on some others it may be £5pp.
1% is often quoted by pro traders and some talk of up to 5%.
1% is probably unrealistic for small accounts as even £1pp can take you over 1% in certain markets.
Find a % of capital you are comfortable risking per trade and take it from there. The lower this figure is, the longer you will stay around and the more likely you are to be successful longer term. The downside is, you ain't going to get rich overnight! But hey, that life! You could get rich over the longer term.
Dont forget that betting £1 on vodafone is a lot less risky than £1 on Carnival point for point carnival is going to fly about the place while VOD doesn't move........ therefore bigger bets on the lower priced issues adn more on the higher priced ones, otherwise you might end up with very skewed results at the end of oyur testing period.
I realise this is similar to the 1%-5% post below but with SBing the min stake is usually £1 so you mightn't be able to put this into practise.
Finspreads.com do a trading academy where you can bet 1p a point whilst your learning...... might well be worth looking into this until you know what your doing...........keep your tuition costs to a minimum