Spread Betting for a living

[Tileman]

"Also be careful about overnight bets, particularly with U.S. stocks, where extended training can often result in significant drops at the opening bell (witness eBay and Yahoo recently). Guaranteed stop losses can avoid this."

I think you will find guaranted stop losses on US stocks are along distance from the trading price which wont help you much ebay 8 t0 9 dollars with D4F.Spreadbetting companies are not going to take the risk either.

 

[nicolas500]

When you say access to relevant and reliable information, do you have an 'inside' feed or do you mean the news?

I'm interested if it's the generally available news to find out (before the markets open this morning) how you feel M&S will respond today. I don't trade UK stocks, but I did wonder last night how quickly (a) how quick would be the reaction to the bid withdrawal and (b) which net direction would win out.

As with all news, I think it can go either way. In M&S' case - either power down as the withdrawal of Green's offer is interpreted as a 'bad' thing for investors long term or (b) move on up as punters feel the current board will have to pull out all the stops to make the shares worth more than Green's offer over the long term.

I don't have an inside feed, as such, although I do subscribe to the "Professional Series" of The Oil Trader. From my experience, they do seem to get information before it's really seeped through to the main market. In any case, following their advice, I've covered the subscription costs and made money. For currencies, I refer to www.forexnews.com, which is free and I've found to be reasonably reliable, at least if measured by whether I made money.

In terms of M & S, I believe that the price will gradually drift lower, after the inevitable sudden drop, following Green's withdrawal. Recent trading figures were poor and if it hadn't been for the euphoria around the bid, I believe that M & S would probably be trading lower than at the time that rumours of Green's bid began to surface. In terms of Rose's responses (i.e. giving money back to shareholders), I suspect that this will only affect the price when information about such a release of funds is made available. Overall response seemed to be a knee jerk defensive one. I would have thought that extra funds would have been better used on improving the business. All imho, of course.

 

[PeterTT]

I have never had a problem with financial spread betting companies. Ok, the spreads and margin requirements can be quite large, but for my style of trading (not day trading!) the important thing for me is the tax free profits. I have accounts with 4 different companies .. I like Cityindex for their online order system but their spreads are wider than most, IG index seem to cover the most markets, Finspreads are good for US commodities and close spreads, Deal4free have a great front end system and some close spreads on bonds. I am tempted to try Capital Spreads as they seem to have some closer prices on some instruments I trade.

Peter

 

[nicolas500]

"Also be careful about overnight bets, particularly with U.S. stocks, where extended training can often result in significant drops at the opening bell (witness eBay and Yahoo recently). Guaranteed stop losses can avoid this."

I think you will find guaranted stop losses on US stocks are along distance from the trading price which wont help you much ebay 8 t0 9 dollars with D4F.Spreadbetting companies are not going to take the risk either.

Good point. Wasn't aware that the guaranteed stop loss was so far away on eBay. I suppose that the other alternative is to close bets daily with more volatile stocks. Since they usually move 50+ points, per day, shouldn't be too big a deal and if it means avoiding 400+ point overnight swings, all the better. Of course, you won't be too happy if the swing would have been in your favour but it's more important to preserve your capital in my opinion.

 

[Creech]

There seem to be some people here pretty stong against SB. Of course using what the pro's use would be great but i guess most of us here are not yet pro's or do not yet have the capital that they have or have access too! I just think SB is a good start for someone starting out - and i agree especially for swing trading.

At the end of the day if you screw up and make a wrong decision you will lose whether you deal direct or with a SB IMO. Eveyone who seems to dislike SB doesnt give any concrete reasons as to why they are so bad? Ok apparently they try and cheat you, but so do the "top high street named brokers/houses...That's basically how the financial markets work - always have, always will." (anley) What other reasons are there? But dont start blaming the tools/systems!

Also, what others platforms do you use?

 

[andrewmooton]

agree, SB's are geared more towards swing/position trading & can form an important part of a traders (collective) arsenal....but I guess it comes down to the instrument(s) you trade as to whether it's possible to attain consistant gains via this method....as with any platform, it's the 'tradesman' not his tools which will determine the outcome re: profit/loss.....I use SB's as well as brokers for my intraday play's on the Forex, as do one or two others on a regular basis. They're simply another tool in the kitbag, and utilised sensibly (with a proven & workable strat), offer good consistant profit potential.

good post buk!

 

[andrewmooton]

Is there anyone here who does actually make a living from spreadbetting?

If so, i'd love to know how they do it.

 

[JonnyT]

You need a method that looks to capture a days major trend else a swing trading methodolgy.

I am trading my own Cable Trader system via Deal4Free as it has historically produced 20 pips+ per day.

JonnyT

 

[stevet]

does "historically produced 20 pips+ per day" mean that you have actually made 20 pips a day from trading the system - that is real money profit - not theoretical?

 

[anley]

Creech

We're not all putting the boot into spread trading per se, rather saying that you goal of making 10 points (on average) a day using spread bets is basically unobtainable in real-time trading.

The main gripe however with SB is that they're actually very expensive to trade in relation to the cash products or CFDs and futures. And as the cost of doing business is one of the most dominant factors of successful trading, trading the cheaper products is normally the most successful route to take.

However I agree with you that for anyone starting out, spread betting because of the small trades one can do is most probably the best learning ground.

 

[PhilHughes]

10 points easy - not me!

I thought 10 points - no problem every couple of days -thought I should be able to take 10 points on stocks in the FTSE 100, using TA & following news feeds.

Haven't really got anywhere - lost a bit, not as simple as it seems!!

I'm new to it but it's easy to mis-interpret the situation.
My advice have a go, make sure you start off small though !

Can anyone tell me what cable trading is ??

Cheers

 

[Buk]

I guess you're referring to Jonny's comments re: 'cable trader'??.....it's a system he uses to trade the GBP/USD (referred to as 'cable') on the Forex.

 

[anley]

Phil

Don't worry you're just travelling the same road most of us have been down.....

But I agree with you, have a go (it's often the best way of finding out, and of course you learn a lot as well), but as you rightly point out, do it with small money. You can always bring the big guns out at a later stage.

 

[Creech]

Dont get me wrong i appreciate all your comments - im still learning after all! And im just trying to create a more in depth discussion on this subject.

At the end of the day i just need to know and find out what the best platform is for a someone just starting out. 10 points is what i need to make to get by and i hope i can! If it doesnt work out then i have to put my thinking cap back on!

I just really want to to find out what the best route is for someone like myself. Should i start with SB and if that works out progress onto something else? If so, what platforms exactly should is use after SB? Any advice on this would be much appreciated!

 

[stevet]

assume you will only lose money for at least the first year

you can assume otherwise - but that will just cost you more money

the first skill to learn is how to control your losses - then you can think about breaking even and one day - maybe - think about making a profit

p.s if you want to make money spreadbetting - start a spreadbetting company! otherwise spend time just finding out what professional traders do and use

 

[anley]

Creech

This is what I'd do.

Open an account with Finspreads.
Deposit £500
Risk no more than £20 per trade
Get trading the markets, a few punts, a bit of TA, maybe follow some system etc. In effect you're not looking for any style in particular just trying many different ones out
In 6 months you'll have a good idea what kind of trading style you're comfortable with
Then if you feel more confident pay in £2000
Trade this money for another 6 months
At the end of the year you'll have an even better idea of what works and what doesn't
If you still think you can make good money then move onto CFDs etc
Also throughout the whole exercise keep a close eye on the costs involved (bid-offer spreads etc)

 

[MysticalTrader]

Amazing. That is exactly the strategy I have developed recently, after losing money for a year, I am now making money. The £500 is crucial, I found when I had £5000 in the fund I got seriously reckless... and lost money as a consequence. I am now very much more careful, and hopefully will be able to gradually increase stake and profit.

I SB at the moment and it suits me for a number of reasons. Later on - who knows?

MT

Creech

This is what I'd do.

Open an account with Finspreads.
Deposit £500
Risk no more than £20 per trade
Get trading the markets, a few punts, a bit of TA, maybe follow some system etc. In effect you're not looking for any style in particular just trying many different ones out
In 6 months you'll have a good idea what kind of trading style you're comfortable with
Then if you feel more confident pay in £2000
Trade this money for another 6 months
At the end of the year you'll have an even better idea of what works and what doesn't
If you still think you can make good money then move onto CFDs etc
Also throughout the whole exercise keep a close eye on the costs involved (bid-offer spreads etc)

 

[Gordon Gekko]

not having a strategy is the best chance anyone starting out has of being successful - since even if you were handed "a gold plated 100% cant get it wrong it strategy" on a plate - you would still screw it up when you are starting out

the only way to stand a chance of being successful is to accept that you dont have a clue about trading and its gonna take one to two years of full time day in day out market analyis and trading to get to a point where you might be able to make it - you should be making breakeven/profit in year 2 and making money in year 3 - if not - write your losses off and go for an easy job - like a brain surgeon - you wont make as much money as you would trading - but its a lot easier to learn to be a brain surgeon - all the best!

And Steve, I presume you're saying this based on your experience of trying to learn brain surgery by buying a few £40 textbooks and visiting some brain surgery chat rooms and taking advice from fellow enthusiastic teach yourself brain surgeon wannabes who have impressed others with their self-proclaimed surgical skills and vocab like middle cerebral artery, basal ganglia. Or perhaps you've even attended a seminar or two organised by Mr Darren Winters, Consultant Brain Surgeon at St Gullible Hospital. And maybe in a year or two or maybe 3 like you say you could be operating on a few brains.

 

[Creech]

Thanks anley. Yeah i guess ill start off like that with SB and hopefully if things work out ill move on from there!

 

[stevet]

Gordon Gekko

yes, i got tired of my old job, and i wanted to make more money, so i thought i would give brain surgery a chance

i decided to give it a year to see how it would go. So, i got a few books, found some kind people on the internet to let me pay them for a day or two training (they promised me real brains to operate on, but had to make do with a lettuce, but the trainers were real nice people, were only doing the training as they liked to help people, and assured me they did brain surgery everyday).

anyway, realised i could not get into private health surgery straight out the trap, so decided to try being a vet first, my daughter still cries over that "bloody" cat now, but i kept a bit of its brain for the selfish kid

a bunch of animals down the line (maybe i should have bought real instruments and not used that knife and fork, but i thought as i was starting out that i didn't need professional instruments) - i decided to have a bash at trading instead - so here i am - all hyped up and ready to take spreadbetting companies to the cleaners!

one strange thing though -all the kids working in the spreadbetting companies dont seem to have any interest in trading after seeing how it works -and all want to become brain surgeons -mmmmm - maybe i should become a brain surgeon trainer