Spread betting - £30k - £60k in 2.75 months

[olivertomahawk]

And so, my initial plan of turning £30k into £60k in a year turned out to be a lot quicker than I had anticipated. I in fact, have doubled my initial stake in less than 3 months.

I am not here to gloat, and I also realise that I have been extremelly lucky with timing the great bull run, and in closing all my bets yesterday so it seems (from today's dive anyway).

I just wanted to post about this, if any of you are interested. I have tracked my progress from day 1 on my blog and have put up a summary of all my bets since the beggining. Check it out at Barefoot Spread Betting

I am now sitting on my £60k wondering what to do. This has been a fantastic experience and I have learnt a lot. I definitely want to re-enter the markets again but am concerened about a big correction and I also want some time out for a bit.

My ultimate goal however it to trade-for-a-living so I will be trading again soon but I feel that all traders need some time away from the markets every now and then.

Thanks for all the comments and encouragement on my initial post; http://www.trade2win.com/boards/home-trader/164684-spread-betting-30k-60k-12-months.html

I will certainly let you guys know if and when I start again.

Oliver

 

[ffsear]

Fair play. What was your max risk per any 1 trade?

Also, you say you want to do this full time. Do you not feel £60k is enough?

 

[olivertomahawk]

ffsear - max risk per trade was £1667.

£30k divided by 18 bets (my max number of bets at any one time)

 

[ffsear]

Sorry i edited my post...

Also, you say you want to do this full time. Do you not feel £60k is enough?

 

[ffsear]

ffsear - max risk per trade was £1667.

£30k divided by 18 bets (my max number of bets at any one time)

Also with this. Did you try to keep your long/short ratio equal?

 

[olivertomahawk]

Sorry i edited my post...

Also, you say you want to do this full time. Do you not feel £60k is enough?

I think I actually need about £125k to trade full time.

This is my thinking:
I was working off a 5.6% risk of my portfolio per trade. That worked and worked well in the current market but for longevity I would rather risk closer to 2%. So keeping the current risk per trade of £1667, that is 2% of £83,350. Then due to the deposit factor etc. that the broker will require, putting £1667 at risk is my risk that I am willing to take but due to market slippage etc. that the broker needs to cover themselves for, they require somewhat more than £1667 deposit (depending on how risky the underlying stock is). On average throughout my experiment I required around £45k in total to have my £30k bets. If that makes sense?

So taking £83,350 and multiplying by 1.5 is roughly £125k !

 

[olivertomahawk]

Also with this. Did you try to keep your long/short ratio equal?

No - I was very bullish and had no short bets at all !

 

[ffsear]

No - I was very bullish and had no short bets at all !

Does that exposure not bother you though? Say some fundamental news one day caused all equity markets to decline. You wouldn't be hedged against that.

 

[olivertomahawk]

Does that exposure not bother you though? Say some fundamental news one day caused all equity markets to decline. You wouldn't be hedged against that.

It does - I really need to think about a hedging strategy but by the time I was getting around to it, my experiment was over!

This obviously was a phenomenal result and I hadn't expected even close to how quickly I would double my money. That's why, like I have said, I consider myself extremely lucky this time but am sensible enough (I hope) not to throw caution to the wind and launch myself back into the market.

I certainly need to ponder these results, analyse my bets and definitely think about a hedging strategy going forward. Maybe a short on the FTSE 250 which is what I was most highly correlated to.

 

[ffsear]

I trade share too, but i try to keep my book as balance as possible. E.g if I had 2 longs and 1 short, my next trade would have to be a short. Problem is that it limits the number of position, but thats fine with me

 

[olivertomahawk]

I trade share too, but i try to keep my book as balance as possible. E.g if I had 2 longs and 1 short, my next trade would have to be a short. Problem is that it limits the number of position, but thats fine with me

Hmmm, interesting strategy. Does this not end up with you effectively hedging yourself though?

Most stocks go up in a bull run and down in a bear run. I know I am over simplifying this but that is ultimately what will happen. It's very difficult to bet against the trend, maybe you get a few right but the majority of stocks will follow the overall market trend. So if you have 2 longs and 2 shorts, the gains and losses will cancel each other out, or I am missing something?
Are you making money like this?

But that said, I do need a hedging strategy - I just feel that I would back the market trend mainly, either long or short and then put the opposite bet on the FTSE 250 itself, a bet that would be smaller than the total risk I have on all my bets combined so at least if the market tanks in the opposite direction, I won't lose everything.

 

[ffsear]

No, It still has to be a valid entry for me. I am a short term trend follower (3-20 day trends) So if the market is in a bull run and I have a long position, I will still attempt to find a stock that's trending down as my hedge. -(e.g Apple has been in a downwards trend while most stocks have rallied) But this does limit the number of possible entries I have.


SO I still expect both my long and short positions to make money.

 

[trade_to_win]

I am very new to this but thought I would add:

"So if you have 2 longs and 2 shorts, the gains and losses will cancel each other out, or I am missing something?
Are you making money like this?"

My understanding it that you would be making money on both the long and short, and in your system you are only entering and making money on bull runs and long trades. If you shorted at the end of the run you would make money on the way back down also. Again - overly simplifying it but meh

 

[Tempted]

And so, my initial plan of turning £30k into £60k in a year turned out to be a lot quicker than I had anticipated. I in fact, have doubled my initial stake in less than 3 months.

I am not here to gloat, and I also realise that I have been extremelly lucky with timing the great bull run, and in closing all my bets yesterday so it seems (from today's dive anyway).

I just wanted to post about this, if any of you are interested. I have tracked my progress from day 1 on my blog and have put up a summary of all my bets since the beggining. Check it out at Barefoot Spread Betting

I am now sitting on my £60k wondering what to do. This has been a fantastic experience and I have learnt a lot. I definitely want to re-enter the markets again but am concerened about a big correction and I also want some time out for a bit.

My ultimate goal however it to trade-for-a-living so I will be trading again soon but I feel that all traders need some time away from the markets every now and then.

Thanks for all the comments and encouragement on my initial post; http://www.trade2win.com/boards/home-trader/164684-spread-betting-30k-60k-12-months.html

I will certainly let you guys know if and when I start again.

Oliver

I would like to trade using your strategy. Would you be kind enough to put me through. Also how much do i need?

 

[Aston1st]

@Olivertomahawk.

First congratulations on your success.

I had a similar success some time back, by turning £2600 into £25,000 within 6 weeks. At that time my account had grown to the zenith of £118,000.00 and my largest one day loss was £62,500. That was the time I broke my own rules.

The lessons that I learned about the growth of the account and loss was the following:

When trading, each time your up divide your profits into :

1/3 personal expenditure

1//3 into a reserve trading account ( up to a fixed sum. then the division could be 50/50)

1/3 remaining in your trading account to grow your size.

If you have a very bad day, take time off before accessing the reserve trading account. If you hit your daily loss limit, then do not take your 1/3rd out until you have surpassed your last high on your account.

The main idea is to realize your paper profits and crystallize them into hard profits, also to benefit from the fruits of your trading.

Get rich slowly. It's the safest way.

 

[timsk]

. . . and my largest one day loss was £62,500. That was the time I broke my own rules.

Ouch!!!
I'm not certain, but that might just be a T2W record - assuming we're talking about real money in a live account and not paper money in a demo account. Anyway, glad you survived to tell the tale.
Tim.

 

[olivertomahawk]

I would like to trade using your strategy. Would you be kind enough to put me through. Also how much do i need?

You will need more knowledge and experience than money!

Sorry, no quick answer here, I don't have the silver bullet that I can give to you, that you could follow, and you become a millionaire (or whatever it is that you want).
it doesn't work like that.

I have done well, partly due to luck and partly due to experience and knowledge.

My advice would be to go and read and then read some more. Learn as much as you can and then try your hand at trading. All traders have different strategies and it's a complex mix of knowledge, psychology, timings etc. What works for me might not, and probably won't, work for you.