How do people get it so wrong

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bakoo

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I did spreadbetting for some time ago, 6 months ago i made my last bet and then went to CFD's where i have had a little more luck.

I didnt invest vast sums in spread-betting, but found myself loosing the best part of £100 per week.

I have read many places that only 7% of spreadbetters make a living, and only 12% make money at all.

Spreadbetting to me is simple, you bid high or low, thus a 50/50% change of win or loose, but i have never got my head around why so many loose?

I lost because i made a projection and didnt stick to it.

I said it would close high, and then noticed it going down, had a panic and closed out. Then end of day i would see that my projection was correct, and i just love my nerve.

So why do so many get it wrong?
 
bakoo said:
Spreadbetting to me is simple, you bid high or low, thus a 50/50% change of win or loose, but i have never got my head around why so many loose?
Click to expand...

Just because there are two outcomes doesn't necessarily mean that there each outcome has an equal probability of occurrence resulting in a 50/50 . That's why you lost money.

What you've been doing could probably be equated to throwing a dart at a dartboard, blindfolded, with each section being the chance to roll a severely biased 12 sided dice each with varying amount of sides resulting in profit. Unfortunately you were unlucky.

Sounds to me like you'd be better off in a casino red/black - ing it. It's a lot easier than trading if you don't want to get into it properly.
 
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bakoo said:
Spreadbetting to me is simple, you bid high or low, thus a 50/50% change of win or loose, but i have never got my head around why so many loose?

So why do so many get it wrong?
Click to expand...

It sounds like you are referring to Binary betting. But success in Spreadbetting for normal purposes (ie going long / short on any particular instrument) is really little different from anything else - if you can't make a successful trade it's unlikely that changing to CFDs is going to cure it.

A good trader will be profitable in almost any medium if he puts his mind to it - and if he does that he will aslo choose the most suitable medium for his purposes.

It seems from received wisdom (I don't have any hard evidence) that most people fail at spreadbetting because they haven't mastered trading. It's no good blaming the messenger (ie SB Companies).
 
Technically Fundamental said:
What you've been doing could probably be equated to throwing a dart at a dartboard, blindfolded, with each section being the chance to roll a severely biased 12 sided dice each with varying amount of sides resulting in profit. Unfortunately you were unlucky.

Sounds to me like you'd be better off in a casino red/black - ing it. It's a lot easier than trading if you don't want to get into it properly.
Click to expand...

Have you ever tested trading with the flip of a coin? If you flip a coin you will get a 50/50 probability and able to use this in a market except for paying spread which will slightly skew the odds. In a casino you'll never be able to bet on a 50/50 event.
 
I never said it was 50/50 I said the zero skew is better odds than paying commission/spread on a random trade with a coin flip entry. IMO anyway.

Edit: what I meant to say lol. Just re-read the post.
 
Amazing how many times I hear the same thing....

This 50/50 garbage ??

just because it can go up or down maybe ??

I just do not know where people get this idea from... and roulette is not a fair game... unless nobody noticed there is a Green bay with a white Zero on it ??? what do we think that means !!!

The house wins in the long run... ALL THE TIME.... its a mathamatical certainty...
 
Ah! The old 50/50 :)

A 50/50 chance that the next move will be one way or the other does not equate to a 50/50 chance that you'll make a profit.

When you've tossed your coin the next real move will be up or down (50/50). When that new price prints you're back to 50/50 that the next price will be up or down from that and so on.

' Course you might play a coin toss entry on the open and exit on the closing price. More or less 50/50 if you're a random walk subscriber, but maybe +1 one day and -50 the next. What's that? You'll protect against that by straddling the bet with limit and stoploss orders? Well that only leaves you 50/50 if you have them equal (ie: 1:1 risk/reward) and the spread will defeat you over time.

Mind you, if you are paying attention to the chart you'll see it was never 50/50 in the first place :D

good trading

jon
 
normbeef said:
Amazing how many times I hear the same thing....

This 50/50 garbage ??

just because it can go up or down maybe ??

I just do not know where people get this idea from... and roulette is not a fair game... unless nobody noticed there is a Green bay with a white Zero on it ??? what do we think that means !!!

The house wins in the long run... ALL THE TIME.... its a mathamatical certainty...
Click to expand...

I used to work in a casino years ago and I can tell you the casino makes around 3% of what's on the table per spin. Thats's how they operate. The electronic ones (that aren't hooked to live tables) make a lot more.
 
Let me get this right bakoo. You're saying

Spreadbetting to me is simple, you bid high or low, thus a 50/50% change of win or loose, but i have never got my head around why so many loose?
Click to expand...

but at the same time you're saying
but found myself loosing the best part of £100 per week.
Click to expand...

You started with a wrong assumption, and you came to a wrong conclusion. When someone says the chance of it going up or down is 50/50, then I wonder what they mean. To what level is it 50/50? 10 points up or down 50/50? 20 pts? Or do you assume that at every single instant, even one point up or down is 50/50. If you do think it is 50/50, then the only sensible decision you should make is to quit trading. Because a 50/50 game where you lose the spread each time guarantees that you will lose in the long run. If you can find some places where it is not 50/50 then things might get interesting :)

I lost because i made a projection and didnt stick to it.
Click to expand...
This is one reason why people lose, not sticking to the plan. There are many reasons for losing. Poor money management is another.
 
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My take on 50/50 was not an odds take, it was the fact that you can only go long or short.

It would seem more people loose than win, so thus i know the odds are not 50/50. But what i cant get my head around is why so many people always go the wrong way and loose on a game where you can only go short or long. Its like heads and tails, you will get one or the other.

I know my mistake was to close too early as i lost my bottle.

CFD's i hold me nerve with more, i always trade them with the long term in mind and not doing to bad.

People have to make cash spreadbetting, but my guess would be more loose than win. So what makes winner as with all things there has to be a way to maximise the chances of you going in the right long or short direction.

I can quit thinking of spreadbetting as a 50/50 bet, but what i really want to know is how one can calculate the real odds and make the odds go in ones favour?

I have been told that technical analysis does not really help in spread-betting, but how true is this?

You can only learn by asking questions, and one needs to pray that the answers are the right ones, thus asking on a forum. If two or three members all say the same thing, it has a chance of been the right thing.

I have had too much junk put in my head, and like some famour person said, might be newton, it takes 10 correct inputs to correct 1 incorrect input.

Loosing £100 is no big deal, but whilst my mind set is all wrong at the moment and if i continue with it i will loose more and more, i want to put this right and do what it takes to get the right mind set and technique and get the rights facts so i can make a good go.

So my mind set is all wrong, so please push me in the right direction to put it right

thanks
 
More people losing than winning doesn't neccessarily mean the odds are worse than 50/50: It could be that people are stopping out of trades too late and taking profits too early. I fooled myself into thinking spread betting would be easy as in my demo account I kept positions open until I got good profits, whereas in a live account I would have been tempted to close big losers and small winners. Perhaps it's fear that makes people lose.
 
bakoo said:
I
I lost because i made a projection and didnt stick to it.

I said it would close high, and then noticed it going down, had a panic and closed out. Then end of day i would see that my projection was correct, and i just love my nerve.

So why do so many get it wrong?
Click to expand...
Besides all of the inbuilt imbalances in favour of the SB company that others have talked about on the thread, there is the effect of emotion in clouding one's judgement that you yourself mentioned.

The market knows how to manipulate the forces of greed/fear i.e. what to do to keep you in losing positions until you cannot bear it any longer only to close at a loss or how to draw you into losing positions by disguising what the market's true intentions are.

Try putting yourselves into the shoes of someone who wants to do either of these things to you and work out how that would be reflected in the charts and how you might spot such deception

Charlton
 
Well another way to look at if you think trading is easy, just look over a 5min chart of at the end of a days trading count how many places you could have won a 30pt trades,maybe twice,maybe 10 times.Each intraday trade will probably have a perfect 30 second window to put the trade on, miss that the chances are
the trade will be underwater to start with.So far we have done this with hindsight,so imagine trying to find those perfect trading windows blind folded,because no retail trader knows where the market is going next.Say the trading days is 8hrs,and we have 10x30sec windows = 5 mins.Now imagine a trader blindfolded for 8 hrs trying to find those 10 perfect 30second windows, thats 8x60mins= 480mins/5mins = odds of 1 in 96 and thats only your entry.Bear in mind markets often zig zag back and forth across the same ground, which appears to be illogical to most people blowing stops.
Here's the corker where the 50/50 comes in, is when you've taken all this into consideration you decide whether to buy or sell.Think that makes it 1 in 192 chance plus having a blindfold on plus you still have to exit the trade at the perfect time,still wanna play ball ! Of course this is only hypothetical example.
 
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