SB account replaces my pension.

[Salty Gibbon]

I opened an account with Fin Spreads about 8 months ago and deposited GBP 5,000.

At the time I was new to spread betting and just took wild punts on various of the major indices. Within one month my account balance was GBP 3,600 and things looked bleak.

But then I got wise and adopted a very simple SB strategy with the result that today my SB account balance is in excess of GBP 11,000 and now beginning to grow rapidly as I compound.

With another 16 years to go to pensionable age I reckon I can convert my GBP 11,000 to a very large number indeed.

So I now regard my SB account as my pension fund because I can make it grow very quickly and I can see it grow on a daily basis.

With my simple strategy I have not lost a bet for around 3 months and I have had 84 consecutive winning spread bets since my last loss.

All I do in this long-term uptrend is to keep my eyes on various indices ( DOW, FTSE, DAX, CAC, NIKKEI, NASDAQ ) and watch for the dips. I enter long on a dip and rely on the underlying uptrend to carry me to profit. I ususally take it after 50 points and then wait for the next dip. And so on and so on.

Trades can last minutes, hours or days but with so many indices I see opportunities on a daily basis and capitalise on them.

If the underlying trend reverses and we go down, I will just do the same thing in reverse.

Lots of fun, nothing complicated and I can see my pension growing before my very eyes.

 

[options]

Well done Salty.

That is the ideal way to trade with the SB's

Keep going son, and good fortune.

 

[Salty Gibbon]

Thanks Options.

 

[JonnyT]

Lets get real!!!

Sorry guys but when you start putting/making serious money the SBs won't deal with you fairly.

If you are lucky you will get telephone quotes.

As to the strategy, can it cope with a September 11th, a Black Monday, or an Oil Crisis? i.e. is your money management sound.

JonnyT

 

[Salty Gibbon]

Jonny T

I have considered all the points you are making.

There is no shortage of SB companies and if one's account balance gets too large, then it is very easy to open another account and spread your funds.

I would envisage having several accounts open in the future. This would probably preclude me from making really large bets but I don't want to be in that ballgame anyway. I am not looking to make millions - just enough to make my retirement very comfortable indeed. I certainly do not envisage building up an account to GBP 1 million, for example.

At a certain level I would withdraw excess profits and either use them to open another SB account or invest them in something entirely different like my Direct Access Brokers account for example.

As to money management, my policy is simple but very clear to me. I have tried to apply some disaster planning to this by never having the bet size too large in relation to my capital. I have also looked at the economic recovery which comes after a disaster because there is good money to be made there also.

All in all I am happy with my approach and will just forge ahead.

My apologies for taking so long to answer. My wife made me a very delicious plateful of Liver, onions, peppers and boiled rice. It was a superb lunch and I am glad that the USA is closed today because I feel like a sleep now.

 

[options]

Swinging is not too much of a problem JT.

The shorter the time frame trading wise and larger amounts will get them screwing you around.

Get a little line out with smaller amounts and watch it compound. Get out or scale out at quiet moments.

 

[Salty Gibbon]

Of course, spreading your funds also spreads your risk.

 

[m_eoin]

Salty,

a quick question on how do you decide where to put your stops? Like the strategy b.t.w. Simple and rewarding.

Keep it up.

 

[jsd]

just a point i notice your trades can last mins,hours,days etc what has been your biggest drawdown to date ? whilst waiting for your 50 point target to appear. the last few months has been an excellent climate for your method of buying dips into a one way medium term uptrend but when the market action turns from non trending to maybe irratic you may have to consider a method for that rather than relying on the trend trading method .

well done, but look to the horizon, start planning now...

jd

 

[Salty Gibbon]

m_eoin

I risk a maximum of 3% of my capital on any one trade.

Stops are placed at 1ATR +25% ( nothing scientific about this - just seems fairly sensible ).

Bet size = (Capital*3%)/(1ATR+25%)

 

[Salty Gibbon]

jsd, by drawdown do you mean how far has the market gone against me in any one trade ?

My last post shows that I generally use 1ATR plus 25% as my stop level.

In my last 84 trades I have never been stopped out. BTW, I do not always wait for 50 points. If I think the short-term uptrend has run its course I get out and wait for the next dip.

I guess that answers your question.

 

[Salty Gibbon]

When the market goes into ranging mode as opposed to trending mode, then I will just look very carefully to see how the market is behaving and continue to buy the short-term troughs and sell the peaks or as near as dammit to it.

I do not expect to trade every day - I have time to study this thing and conclude as to market behaviour before I jump in.

 

[donaldduke]

Well done for making a profit in your account.

But there is an old saying: "Dont confuse genius with a Bull
Market..."

 

[Salty Gibbon]

I do not ever rate myself as a genius. Just a cautious and sometimes shrewd investor. I have been around long enough to know that these markets can make a fool out of the very best.

And I am nowhere near the very best. I am just a journeyman trying to make a buck or two.

 

[donaldduke]

I have had 84 consecutive winning spread bets since my last loss.

In my book you are a genius... And you should be proud of it...

 

[bracke]

Salty

1 What constitutes a dip, do you use a % basis?

2 If your trades can last mins, days etc I assume you use the most distant futures month.

3 Where do you get you atr data from?

Regards

bracke

 

[Salty Gibbon]

Bracke

My dips are entirely subjective. I just look on the chart and if I like what I see I just get in. It is nice if the index dips down past my last entry point but this does not always happen.

At the moment I will be trading the February or March index month. This gives the trade plenty of time and a good chance to win if there is a temporary setback.

My definition of ATR ( this may differ from other peoples' ) is the simple average of the high/low spread over the past 14 trading days. I calculate it myself from EOD data that I collect after the close each day.

 

[darrenf]

Hi Salty,

very impressive to have so many consecutive winning trades.

I don't know if you read the reward:risk thread recently but this was discussing the merits of high win rate but low reward:risk ratios v lower win rate and high reward: risk ratio's.

I would be interested to know what your average reward:risk ratio is to acheive so many consecutive winners. ie for every trade which risks 3% of capital, what is your average return as a multiple of the amount risked?

 

[jsd]

ok 3% per trade, now what is your bet size ie how many points for instance in the dow is your 3% exposing you to ? ie 150 points @ 2 pound a point = 300 pounds being 3% of 10k etc... or say 60 dow points @ 4 pounds per point giving 75 point downside risk etc. i always tend to think in those terms

jd..

 

[Salty Gibbon]

Approx 0.4 to 0.5 at a guess.

I don't maintain records of this.