starting spread betting

[Mulder_]

Hi everyone, for a while now, I am reading myself into Spreadbetting but I still have some unanswered questions. So maybe I find them here...

If I would start, I would be with £1000 because thats about the amount I can loose without dropping a tear.

I am not sure which markets to trade, recenlty I liked trading gold in a demo account, but I think that gold is too expensive for £1000 starting account, or is it? the reason I think that is because of the money managements golden rule: never bet more than 2-3% of your total funds into a single bet. 3% of £1k is £30, £1 per point is usually minimum, so I would have to place a stop 30 points away, and isn't that a bit tight for gold? Wouldn't a swing stop me out too early?

If not gold, what are beginner friendly markets (if such a thing exists) worth looking into?

I think I understood the basics:

cut loosers short, let winners run:
if a stop is placed 30points away from opening, should my limit be placed 90 points away? Is that a good way? (All granted the chart analysis looks like the position could climb 90 points in the first place of course).

the trend is your friend:
bet with the trend, not against it.

money/risk management:
as above, never bet more than 2-3% of total pot.

What exactly are those secret strategies everybody talks about but no one ever discloses? you don't need to explain your strategy, but it would be cool if someone could expain what *exactly* a strategy is, a simple example would be nice though.

is there a chatroom where people meet to talk about trades?



Thats it... for now, if i miss something, let me know.

 

[kimo'sabby]

Hi,

Remember to always read the market backwards. Never! Try to read the market forwards.

Thanks,

Cecil Drongo (spreadbetting coach).

 

[reksa]

Try a demo account for a bit. A good way to come to terms with the platform you will be using.
Gold is hard to trade as it you always have the feeling its about to correct, like it has the last few days.
But its not something i follow closely so i may be wrong.
I trade the indices mainly if im using a SB account. Its all about finding your entry point, use technical indicators to help and your 30 point stop should have room. As for a 90 point limit, use technicals to exit too.

Risk management of 2% is the golden rule.

People post strategies, so scan the forums and you will get some good ideas.

 

[timsk]

. . . if i miss something, let me know.

Hi Mulder_,
Welcome to T2W.

A steep learning curve lies ahead of you and the thing you need to understand from the off is that the majority of questions that need answering are ones that you have to answer for yourself. Sure, members can tell you straight facts - like what time the equities markets open or the value per tick of the ES e-mini futures contract etc., but the difficult stuff you'll have to suss out for yourself. The good news is that help is at hand to tell you the questions you need to address and to point you in a direction (although not necessarily the right direction for you though).

Start by reading the Stickies and FAQs in the First Steps forum. Once you've done that, you'll be well on the way to answering a good many of the questions you've posed here.
Tim.

 

[Mata Nui]

2 to 3% is a good rule. Most SBs are £1pp min but some like SLM are 10p. 30 point stop on gold/oil etc is a bit tight so if you really want to trade those then you will need to look at something like SLM.

Forget about the SL / TP R:R crap. Your SL should be where price would tell you that you got it wrong. Your exit should be where price (or whatever technicals you are using) tells you the move is over. If that is 3x risk then thats great, if it only works out at 0.25 risk so what, if price says get out then you get out. The only thing i would add to that is if you find your strategy gives way more at less than 1:1 then you may find that it wont make much profit in the long run.

 

[Mulder_]

so many replies already, thanks!

I already had several demo accounts. The two ones that I traded, because they appealed to me most were capitaspreads and worldspreads. Currently run a demo on the latter, its seems a good platform, they offer guaranteed stops (if you want them) and they offer this autochartist tool that looks for patterns, seems good.

I just don't know if i should start with a real account. With these demo account, I can never really say if I would trade like that with real money. I mean, I try to be realistic, but sometimes i just try different strategies and except to lose, just because i want to test several things.

 

[Mulder_]

i've had a look now at SLM. didn't know they were using metatrader platform for spreadbetting, thats awesome, I demoed metatrader for forex before and liked it. also great to have £0.1pp

I thought/believed/read, that if your strategy has a (assumed) 40% success rate, then you need to have more return on your winning trades than you lose on your losing trades, otherwise you are not making any profit. If you only make 1:0.25 (basically risking 4 times more than winning) you have to win 8 out of 10 trades to at least break even. of course, your R:R is never fixed and always depends on the market situation/technicals. this still confuses the hell out of me I read somewhere a good example; if you flip coins and stakes are 1:1 while W/L ratio is 50%, than you wont lose or win anything long term. if your R:R is less, then you would lose long term, e.g. if you would lose a £ for the wrong prediction and win 25p every time you guessed right.