If only...

[mias]

Hi Folks,
Here I am looking into the world of trading and I wonder why isn't it as easy as it seems...??
I've just been looking on the business pages of my ISP and guess what, 3 companies are putting out profit warnings after dissapointing X-mast sales and another one is talking of good results...
Now is it just me or does Fundemental laws tell me/us that of these 4 companies, 3's share price is about to drop as we have seen with all the other companies that publish Profit Warnings and the other 1's share price is about to increase because yet again, Fundamental laws tell us that everybody wants a piece of a winner.

Now is it just me, being a complete beginner but is there THE POTENTIAL of making a small bet here...
As far as I understand, and correct me if I'm wrong PLEASE, but I can place spread bets on the 3 going down, as well as on the one going up...

Is there another way?

 

[Trader333]

One thing you can be sure of and it is that results whether good or bad can make a share go up or down. If the results are in line with expectations then the price will already reflect this. It is only when results come out that are not as expected that the price may change and you would need to be very quick to capitalise on this.

Why not just see what happens in this case and you are correct in that trading is just not that easy. If it was then everyone would be doing it and all would be making money whereas most people lose money so it is not that easy.


Paul

 

[FTSE Beater]

Hi Mias

Welcome to T2W

The problem with that is, as soon as the news hits the market (which is normally a lot earlier than we get it) the big boys move in to move price to reflect the news
That's not to say that it can't be a profitable way to pick the shares to trade that day, but I wouldn't necessarily trade in the "most likely direction" - Things like market expectations come in to play. For instance, Tesco might come out tomorrow and report 20% rise in earnings, but if the market expected 50% rise, then it is likely the price will fall - usually too quickly for you to trade it

You can spreadbet and make money on the way down

Sorry to sound negative

<Hr>
Great minds T333

 

[mias]

if only

Very good points both of you have raised and as a rule of thumb I except that the boys in London with there fingers on the pulse would by now have reacted to this.

Paul,
I'm defenatly going to be doing a load more homework before I use my hard earned money on anything...
I am going to move on to paper trading shortly to see how I get on


FTSE Beater,
I read on these boards somewhere that spread betting is like betting on a two horse race,
I love that :cheesy: but when you take into concideration the spread that these bookies take, I suppose you need to be sure that any bet will move by quite a bit either way to make a profit?
I mean, with normal share buying, you have to keep in mind that you pay commission on trades + a certain spread, but with Spread Betting, there is a spread as well, what about commission there and from your experience, which is the better? Or is it different courses for different horses?


By the way, are we allowed to mention company names on these boards?

thanks
Mias

 

[FTSE Beater]

Hi Mias

It comes down to what your trading. If your trading a FTSE 100 stock, then the price offered by the spreadbetting company should be the same as the current market value, so your only paying a small spread. With normal share buying your paying for the spread + commission + Stamp duty (in the uk)

Spreadbetting falls apart though, when you try and do something that it wasn't designed for, like trading US stocks or indicies on a short term basis

To sum up: Trading is a 2 horse race where the odds offered by the bookie are practically 50 / 50, but with the right knowledge you can have a more than 50 / 50 "chance"

By all means mention the names of companies, but advertising is strictly forbidden

HTH

 

[nheath100]

Hi FTSE Beater,

You mentioned that spreadbetting doesn't work well with US stocks. Please could you tell me why you think this?

It's just that I have just opened up a new account with finspreads and am looking to trade the US stocks as I have a 9-5 job. This will allow me to trade a couple of hours a day.

I'm interested in your view as I am a newbie and need all the advise I can get!!

Many thanks