My Spread Betting Lessons....

[bhupe]

I would love to know your spread betting or trading experience.
I will share some of my mine:

1) Never use spread betting for scalping with tighter stops.

2) When putting stop-loss going into earning reports, do not just put stop loss but put guaranteed stop loss level. Any gap down can wipe your account or reduce your trading account massively.

3) It is better to take consecutive small losses than regret later for a large loss. A 50% wipedown would mean you will need 100% gain on the next position.

4) Always let the trade come to you so do not rush to a trade. Maybe create price alerts so when a particular price hits you can decide to take the position. Check support or resistance level but the ultimate guide is the actual price action.

5) Price come before news, and not the other way around. Do not trust what you read about the market. Observe the price action, and then decide.

6) They say trend is friend, but in my experience the best risk to reward ratio comes on trend reversal. But finding a trend reversal sometime means a lot of small losses. But eventually with proper risk management one big winner pay for all the losers and then some.

7) When spreadbetting, do not just use stop loss but use guaranteed stop loss - it would mean paying a little extra when you are stop-loss level is hit but it is also peaceful to know that the maximum loss on a particular position.

8) Never become cocky, be fearful, be paranoid. It will keep you grounded.

9) Accept losses are part of the game. do not try to do revenge trading. (I am still to master this...)

10) Do not just trade for the love of profit, but enjoy the process of trading.

my two cents...
regards,
bhupe

 

[bhupe]

Guranteed stop is slightly costly but when I take into consideration that I do not pay commission (i know it is in the spread.) and there is no capital gain tax then the stop loss is worth it.
Also from my experience, I have realised that actually when taking the slippage factor into consideration, the guranteed stop loss is more effective.

Also, the guaranteed stop loss is dependent on the volatility and type of stock.
It is ideal for swing trading but I would not recommend it on other forms of trading specially scalping.

In regards to risk to rewards, I am happy to take a 2-10% percent reduction in my overall reward. I see it as an insurance and the primary aim of a trader is survival first and then hunting for profits. It is peaceful to know that you do not have to worry about the slippage factor which in a volatile market or sudden bad news can wipe you.

Regards,
Bhupe

2 and 7, how will that impact yr r/r, as guaranteed sl is costly

 

[Splitlink]

I don't like Nº6. Spotting the tops sounds fine, in theory. Getting in on a trend is safer.

 

[bhupe]

I agree getting on the trend is safer. It's just that some traders like to spot the trend before it becomes a trend.

At the end, it's a zero sum game. I win sometimes, and I lose most times. But as long as my net p/l is up, I dont have any complaints....It is like that story of a princess where she needs to kiss a lot of ugly frogs before she meets her dream prince. The only thing is to not let those frogs eat away your money dramatically.

regards,
bhupe

I don't like Nº6. Spotting the tops sounds fine, in theory. Getting in on a trend is safer.

 

[hacks]

3) It is better to take consecutive small losses than regret later for a large loss. A 50% wipedown would mean you will need 100% gain on the next position.

This wouldn't always work. If you set your stop too tight, you'll get a large number of consecutive losses, when added together, will add up to one large loss.

 

[bhupe]

You are right that it does not always work. But concentrating on high probabilities set-ups, instrument's volatility and proper position sizing, then 2/3 out of 10 trade will also give me a net positive p&l.

I have experienced while trading that when I cared about the penny, I lost the pound so I I also factor time now - if my intended position do not go where I intended to go in certain time. I take small loss and look somewhere else as they do in 'The Apprentice' - You're fired i.e. the stock is replaced.

This wouldn't always work. If you set your stop too tight, you'll get a large number of consecutive losses, when added together, will add up to one large loss.

 

[luckystrike23]

check out http://www.financial-spread-betting.com/strategies/strategies-tips.html

 

[bhupe]

Thanks Mate

check out http://www.financial-spread-betting.com/strategies/strategies-tips.html