Hi All

Looking to gain a small following for an experiment, gonna spreadbet 1,000 of my own hard earned with a view not to stop until I hit 25,000 or lose the lot!!

It'll be across a range of Index, equity & FX trades starting small and building the pot (or lose the lot) will be using flat stops and running profits with trailing stops.

If you want to follow every trade and watch the spiral up or down feel free to follow me on www.twitter.com/eyetrader - where I'll be simply be posting each trade as I click the mouse

BTW this is not spam, I'm not selling anything, I dont want any donations, more of a personal challenge that I'm going to conduct in public!!!! I'm hoping to see a few tips on here as well as my own strategies and ideas.

Lastly I'll be donating 5,000 of the profit (if/when I make it) to charity

May the slaughter commence :)

Eyetrader

Good luck with that!

What's your expected timescale?

From Monday 15th to ??? either 25,000 or Zero balance -

I'll be stopping trading my usual account for the duration of the challenge, i've spreadbet for around 12yrs and have been a steady kind of short term trader never running any silly losses, this will be a little different and the I plan to up the risk level somewhat, thanks for the vote of confidence :)

Good Luck!

Thanks Chris

eyetrader - No problem! I applaud your thinking, personally having been told a thousand times 90% of spreadbetters get banjaxed (which is true if approached with a blindfold and pin approach) in these market conditions the odds are more favourable to trading than investing blindly in the 'Buy and Hold (or should that be hope) Scenario'. A worthy challenge and I wish you every success!

There are so many studies so many types of trading style that I felt I'd give this ago using a mixture of all that I know (and have a small belief in) I've come to the conclusion that I'll be mostly trend trading but also looking at the short term sentiment. I've put my first trade on the order book in the hope the ftse has a short rally at open as the dow rallied around 90/100 points in the last hour of trading. As Monday is presidents day in the US my view is a positive figure come the end of the day also watching USD/NOK for those big spikes up and then follow the spike down. Stops will be tight so no chance of going bust on day one ;)
eyetrader

Sounds like a plan:o)

I wonder if this guy is still going - no updates since Feb 17th.

That opening post bit about "..until I hit 25,000 or lose the lot!!.." appears to imply that losing the lot (ie the 1000) is the worst-case downside. It isn't. It is possible to lose far more than the starting sum and slip thousands of pounds into debt unless very VERY carefully monitored and managed.

Eyetrader's Twitter link still shows only one week of trading, back in February. Can we presume it didn't work out? Will s/he be coming back here to let us know?


PS: I have my own spreadbetting exercise under way at the moment. Running for 12 months from yesterday morning (1st Oct) to 30th Sept 2011, starting with 14,000 and hoping to generate gains totalling 19,500 during that time. Logging my trades for everyone to see is far too laborious - especially as I started off with a portfolio of 40 stocks and will be constantly adjusting stakes. I am using non-guaranteed trailing stoplosses.

Those 40 stocks tie up about 57% of my 14k at present. That will vary, but I will always hold about a quarter of the pot as cash. Most bets are longterm ones (expiring March or June 2011) at minimal stakes. A few are bigger bets. From time to time I will place additional short-term bets at bigger stakes (for hours or a few days) to capitalise on particular opportunities when they arise.

Although I'm not going to display all activity, I think I might set up a blog someplace, for progress reports and observations. Or to announce that it didn't work!


PPS: Although the bets are mostly placed with distant expiry dates (and accordingly cost me a bigger spread than shorter term ones would), I will quite often be stopped out within days or weeks, and will be switching to other replacement stocks. This is not the most economical way to run a spreadbet portfolio - but it happens to suit my particular approach and is something allowed for in my costings.

14,000 plus 19,500 is 33,500 which might sound ambitious. But that is a multiple of about 2.39 which is way short of the 25-fold increase that eyecatcher was gunning for.


PPPS: One day is hardly of significance - but just for interest, Day One ended at 14,075. That's about half a per cent up. And flukily, 75 per day, were it happen every day (which it won't of course) is exactly on track. (75 x5 = 375 per week x52 = 19,500), and is the rough daily figure I used to arrive at that target in the first place!

Hi Juzzle, good luck with your endeavour.

I'm sort of doing a similar thing, which started June 16, but on a smaller scale. My daughter is planning to marry in 2013, so with the expected huge costs of this in mind, I've stuffed 3k in a dedicated spread betting account with no particlar target in mind, but a return of 10k would be quite acceptable!

The account will have at least one risk stock, with the potential to multi-bag, without crippling the account if it tanks and the remainder low-medium risk. I'm also looking for short term momentum plays and will jump onboard BB hyped stocks for a quick return if I can spot them early enough.

I kind of got carried away on Friday and quickly realised I had tied up 100% of my capital which resulted in binning a profitable high risk trade (GOLDPLAT) which I think I will regret, in favour of smaller lower risk positions. I now have a 35% cash position which I intend to maintain unless something with quick potential pops up. I'll also be looking to scalp trades on FX/Indices if I can spot a decent opportunity.

The account got of to an awful start when my first high risk trade (DES) hit a duster, but has since recovered.

Thus far 9 trades have resulted in a net profit of 1426.20 (7 winners / 2 losers) with a further five open positions (one of which is an AIM dog, but has a decent return potential or a 350 loss).

Like you, I'm not going to list every trade, but I certainly have high hopes for AFR and assuming all goes well, I'll be trying to build a significant position (50pp at the moment - Edit: Stop at 97p)

Again, good luck to you :-)

Thanks pt. Good luck with yours too.

In my case the logic behind the starting size and target is related to the needs of a friend who is watching. She is being made redundant in a couple of months time, and will be getting 14k, but is expecting to have difficulty finding a replacement job. She is reasonably experienced in sharedealing and spreadbetting, but has not regarded it as more than a way to enhance her savings. She asked me if I thought she stood any chance at all of generating a partial income from such a small capital sum, as a supplement to a part-time job, instead of seeking fulltime work. Or even achieving a fulltime living income. I suggested the latter was over-ambitious, but we nevertheless picked a notional requirement of 20,000 pa gain, which would be 384.615 per week (that would be enough to not need any part time job).

In her case she would be taking this kind of money off the table every week on average. To stay ahead of the curve and maintain that 14k capital whilst withdrawing what amounts to about 2.75% from it each week(!) is a pretty severe challenge. For simplicity we rounded off the target to 75 gain per day (375 per week). That would generate 19,500pa, which equates to about 139% gain over the year, at 2.68% per week non-compounded. (Compounding gains and working with whatever larger sum that created, would obviously be a darn sight easier - but I'm working on the assumption that she would be withdrawing gains almost as fast as they are made).


PS: There may be weeks in which no gain is made, in which case maintaining the weekly average would involve making more than twice the target in other weeks. And an even greater performance if having to redress weeks that show a loss. I might be able to do that in this exercise, but she might not be able to in reality, as her requirement for a routine income would mean attacking the capital.

Hi Juzzle

Clearly your challange is greater than mine! As you've pointed out, meeting your target only will not increase the capital and therefore limit the opportunities compunded gains would provide. Also, losing weeks, which are probably inevitable, will further reduce the capital and thus the margin available for re-investment. Ideally, you could do with a cracking start, which would provide a buffer against those eventualities. What is quite clear from your post is that anyone seeking to earn a living from trading needs more in the pot than that which has been calculated to provide an income (even based on realistic returns).

Yes. I need to hit the ground running and make gains in the early weeks, otherwise the shrinking capital makes it harder to continue. Though even if I achieve that, there is no saying that the market will be similarly friendly in whatever month she starts.

And this is probably a bad time to start - after such a good September. Especially as October is so often a month of turmoil! There is every likelihood that people will be cashing in their recent good gains at the slightest hint of a market fall.

Good luck guys and keep us all posted! Personally I never trade (spreadbetting) more than 3 stocks at a time and unless it's a no brainer stay away from Indices and Forex trading. This works for me trading stocks that I know well.

skinny - re eyetrader, hope I'm wrong and he's made a fortune but the impression I got from the few trades he actually posted was that he got wiped out in the first week :O)

Chris - I guess the same! I wish you chaps all the best with the sb venture. I use it mainly for index trading and to offset real positions. I'm not convinced you can "earn" a living from that method of trading - but am looking forward to both of you proving me wrong!

Certainly not trying to make a living out of SB'ing Skinny, but a hefty return would be nice. By using a dedicated account for this particular venture, I can keep the daughter appraised of progress, or lack of! She isn't going to lose out whatever happens.

I think eyetrader is now selling the Big Issue

Just two trades today (one FX & one DJ) resulted in a small profit of 50, so total profit thus far now 1476.20, representing a 49.21% return on capital.

It's probably worth mentioing that although I started this venture June 16, I didn't actually place a second trade until Sep 14.

Average return per trade (11) 134.20.

Currently four open long positions, which despite a down FTSE day are flat in comparison to Friday's close, with a paper profit of 107.58.

it's much easier to turn 25k into 1k!

Off you go then Ricardo, demonstrate how it's done!

i did much better than that several years ago - made myself a most generous benefactor in redistributing many many pennies

would you have expected anyother sort of answer from mr cyners???:))

i'm afraid it's true ...... hindsight's wonderful, and i genuinely don't think i would have blundered as badly (blind and unbridled greed and stupidity) today as i did then .... at least i avoid CGT for a long time to come!

LOL same old cyners dryer than ever but he makes a valid point.

Can you make a living from 14 grand starting pot...... yes but you have to be able to goth both ways in the market ie, short aswell and I would probably stick to stocks only.

Strict discipline aswell more than anything, easier said than done.

Big problem coming up with stops, ie do you use them or do you risk being wiped out totaly if we get a terrorist attack.

My rules are something like this.....

- dont touch oilys and miners plus biotechs...too risky

- try and stay away from volatile stocks unless you are intraday trading

- never play a stock with a beta of one or higher

- make sure stop if used is far enough away from morning spike

- go for a target of 20% profit or higher if resistance is further away

- use level 2 for entry but if you havent this buy a stock when the spread is tightest and probably when a bout of selling has just taken place, try to get off to a good entry start, this helps to not play catch up later.

- dont go for a big spread stock where the bet size entry is bigger than your acceptable loss. you wont catch up in most cases

- never use more than 2% of your whole pot on one single bet, ie, thats as much as you are allowed to lose on your stop loss so position it accordingly

- make sure you dont overtrade and risk a margin call

- be carefull which 1/4trly bet you go for. If theres only a few weeks to go before expiry pick the later quarters bet even though you pay more in spread

- make sure you have a grasp of charts and TA

- always use ATR average true range on your charts..... this gives you idea of volatility

- read up on the companys results dates, ex divi dates trading statement dates etc etc.

- flog a stock before the news comes out day

- stick to a system and tweak it if needs be

- take a few days break and close out entitre portfolio every now and again

- dont get caught up in data watching or you will be panicked out of some positions

- cut losses fast and let winners run

- use trailing stops after a profit is established and move the stop in tighter , not too tight though

- at all times try to preserve capital base, your still in the game that way

- read as many books on trading as possible but dont over do it or youl end up with hyper tension and producing too much cortisol

- last but not least follow all goldfingers tips...... they are ace.

ps, keep an eye on inter market relationships.

remember we are a global economy now.

Goldfingerthats one hell of a rule bookmine is a little less complicatedback more winners than losers.lol

oooooooooops sorry yep forgot about that.

cheers.

Why do you need to have more winners than losers?

You dont do you.

Sometimes 2 or 3 will be enough if you cut losses quickly. (out of 10)

Goldfinger- Spot on! By the way take a bow acted on your HGM tip @ 100, closed @ 162, excellant call :O)

Exactly. As an example, you could average 40% winners and you would still make money overall if the average win size was more than 1.5 times the average loss size.

Yep spot on.

Probably missed other points in that list aswell hilary.

Im finding now that paying attention to intermarket relationships is a big big biggy.

more seriously .... because it is human nature to avoid biting the bullet so losses continue to mount .... also, stocks fall a lot quicker than they rise, so it's easy to be caught out ..... and finally, it's a truism that we take profits too early - even if, as i often say, no one ever went broke taking same

Yep excelent points cyners could you please add that to the char thread.

First time you have ever taken me seriousyou plonkers!!!

Probably a no brainer but also take into account spreadbetting companys spread and charts on entry and exit points from real time.

And avoid Tabbys horse tips

tab. i knew were you were coming from.

Cheers.

Goldfingerfrom my own perspective...I believe the key to success is research[risk accessing]conviction and disciplineI have nothing against trading as I have done it many years as a Bookmaker[when Jeff understandshe might make money on my selections] you also have to do your research but the conviction and discipline are totally differenthow many times do I hear on these bbs that a profit is a profitobviously true but you need that every time you are posed with constant changing circumstances that involve very small %squick decisions for a fast bucknearly all my investments are long termeither property or stocks or other collectables I use the same systemit has made me luckyI am not clever just follow a clever systemI have had a large punt on blnx @12p thanks to two peoplenow a full grown idiot could not have lost money on blnxbut? I know a trader that has achieved this on several occasionsits a tough game and one that I am not sufficiently smart enough to attemptI will stick to being a lucky thicko

Dont look a thicko to me tab, looks like you know what your doing well done.

Must say I have both a short term and long term portfolios and my investing methods are far different to my spreadbet metholodgy.

Now trading full time rather than investing part time after retiring at 50 a couple of years back.

Keep up the good work.

cheers.

Post from across the road at scrazie from sister thread re- to 14 grand trading account.

GF, I don't think 14k is enough to live off. Would be too much pressure for me to "get it right", to much pressure to over trade, I can't bring consistent returns throughout the year.

For me it would depend largely on other factors: does he have other income sources to cover food and living expenses, is he single, accommodation sorted, if so, then yes, I think 15k is plenty.

Personally I would want to own my own home and be running some other business on the side before going full time.


I would add to GFs list:

- Don't blindly follow tips, DYOR

- Tight spreads are crucial, esp when spread betting

- Get comfortable with charts

- Get comfortable with cash flow, reading general accounts etc (you might as well if this is going to be your job).


Possibly controversial and counter to GF:

- don't worry about beta, lots of money to be made on certain oilers, miners etc, esp when markets fall through support

- always use guaranteed stop losses for spread bets

- always use price alarms for stock positions, never trust the stop loss in your account

- always have a mobile device that can trade, use price alarms(!)

- never be 100% long

- if your fully leveraged and invested, stay very close to the screen and start taking profits

- don't invest everything in stocks

- set your entry, stop loss and profit targets before trade entry, make sure minimum 1:2 risk/profit ratio, use trailing stop loss

- don't overtrade, if you like a trade, use price alert to only buy at support and sell at resistance

- if the profit on your account looks too good to be true, it's probably time to take it, immediately!

- keep a record of trades, reasons opened, give the trade a rating betweem 1 and 10 how sure you are, give reason for closing, evaluate your trades some days later

- make sure the majority of your trades are with the market (trend is your friend)

- don't read individual stock threads,

- do read international press- int herald tribune or my preferred is FT

- use sentiment indicators to help spot turning points and qualify what you read and where you interpret the general market going

- never bet more than 2% of your account: except when the no brainers come along

- bet big on the no brainers (but remember they will not come around more than once maybe twice a year, it will likely be due to a macro trigger)

- don't be scared to get out of the market for weeks or months at a time

- another opportunity will always come, so don't worry if this one doesn't happen

Why does it need to be so complicated with loads of fancy rules? Whatever happened to kiss?

Well it is Spread betting with more risks than your normal broker account hilary.

My experience, Goldfinger, is that the risks are normally self-inflicted by punters who over-leverage small accounts and run stops which are unnecessarily tight and easily gunned.

You don't need a list of 100 rules to avoid those mistakes imo.

A relative of mine is a great investor, makes heaps of money, but is a hopeless spreadbetter, and has never made any money at it - he reckons the mindset is different with s/b'ing, and it seems to be to do with timescale, and as Hilary says, over leverage of accounts, no matter what the size.

FWIW I don't think the instruments you trade matter much, whether it's indices, Fx or stocks, as long as you get the leverage right. It's taken a long time for me to realise this!

Lots of similarities in your rules and mine, goldfinger.

I avoid exploration stocks (oils, mines) and risky biotechs. I usually bank profits on the eve of Results (as even if Results are good, they can be accompanied by some unpredicted corporate action). I keep stakes small in relation to overall pot. I occasionally cash in everything and start again - or reduce stakes take a few days break and close out entitre portfolio every now and again. I use trailing stops. I use charts but in a very simplistic way - the fewer indicators the better.


Too early to report progress on my 12 month mission - three days is nothing. But by last night's close (Day 3) my 14,000 was 15,384 which is nearly 10% up (9.89%). The portfolio now has 43 stocks in it, and is 45% cash.

fully agree with Hilary too - it's about capital management and not being over-exposed ie thoughtful risk-management. That means fully understanding the risk rather than just recognising that there is one. I'm very much a kiss man too. My own S/b experience began very slowly with too much caution I suppose, but it did mean that by trading very small positions, I learnt a technique with which I was comfortable and that was profitable overall. I spend far less time p*ssing about with the markets these days as I'm very busy in my profession, but I took 5 years to turn in a 2,500% profit after an original aim of beating the bank's interest rate. I have to say though, that it was easier to do a few years ago, what with less sophisticated trading software and lax rules from the s/b companies. Level 2 was rather easier to read too which made for easier bot-prediction!

and



equals



It's all that the likes of JP Morgan and Rothschild, etc ever had before they invented those computer thingies. They somehow managed to do OK.

I used to draw my own charts on graph paper updated manually every day. Didn't have a computer when I first traded shares - just teletext prices and a dial-up automated sharepricing service. Then got a computer and joined ESI (which some here will remember)

i just use a chequebook!

I've forgotten how those work.

mine don't :-(

this is a nice thread that i enjoy reading.
h
now this is just by eyeballing but i particularly like thsoe three angels represented by the rule, the pencil and it's shadow.
regards
jkd

Good work Juzzle :-)

Nothing much happening in my small portfolio of three stocks, AFR / SBT and the gold dog, ANGM, although the latter is now at b/e despite the rather stupid (but anticipated) large spread!

50% in cash at the moment, so scouting around for a sure fire winner - Lol

Some good stuff posted on here (none of it mine!).

This 'cheque stuff'....

It's 'insurance time' for the tenants of some of my commercial properties - so we send them an invoice for the premium. We give them all the bank details for a bank transfer or online payment, for them to do the remittance.

However, they ALL send a cheque.

OK it gives them a bit of time and a bit of extra cash flow. I'm pleased they ALL pay promptly, which tells me they sensibly give this kind of thing some priority. It also tells me their cash flow isn't too crap.

But they are ALL a bit 'living in the past' with the making of their payments. I feel it's quicker to do it online. I would guess cheques give them at least 6 days in time benefit but the interest they earn is quite minimal.

Does anyone disagree?

PS. Watching a few things make higher highs, I'm pretty much a 'commodities man' at present, myself.

And the fact your tenants pay by c/q has got exactly what to do with the thread subject?

pth: post 51 et seq is the context, I guess.

Binned SBT today at a loss of approx 275, which on reflection is a bit more than I should have tolerated, also indicates to me that the initial bet was too large. rationale for opening the trade was a chart breakout and adjacent results, unfortunately, the results seemed not to inspire and the SP now appears to be trying to fill a gap. Broker downgrade today probably didn't help very much.

Taken a smaller position in AGLD, which seems to have slipped under the 'gold rush radar.' Initially a nice rise of 8% but fell back during the afternoon to +4%, in any event not far from b/e.

My big hope for a really nice return, AFR, has slipped a little today and may test support at 110p; if it bounces from there may well add.

BRK, SLS and WEIR have been my most consistent upbets so far. And ZEN the best downbet. I got stopped out of WEIR today, but it remains on my list for possible reopening (I had temporarily tightened my stops while away).

Came across this excellent appraisal of IG Index, listing good/bad points on their spreadbetting service:

http://www.financial-spread-betting.com/Igindex-review.html

SBT are a joke outfit imo pt , steer clear.

Saw the breakout myself but due to my own experience with them (I'm limited to placing 16 on an evens favourite and less than a fiver at odds over 5/1) then they obviously have a problem with anyone that ever wins with them and for the record I've only placed about 200 of bets with them in 6 months. If I remember right they also had an offer on that would have increased turnover just before period end with refunds / free bets not being credited til following period. 888sport did something similar.

eyetrader - any chance you might include this link in your header?

http://www.financial-spread-betting.com

It is an exceptionally useful information source for anyone looking at spreadbets for the first time, as well as for the more experienced spreadbetter seeking greater guidance on tactics and strategies.

This character looks a bit dodgy! :-)

This one looks just as bad.

I wonder which of them would win in a fight?

In the days when I dealt via Cantor Index, the officials they chose to show photos of in their brochure were people whose images they presumably thought might impress. They had the opposite effect on me - an offputtingly sharp-looking lot. The kind of people I shy away from shaking hands with.

Dil, interesting stuff, I have no first hand experience of SBT, so always useful to hear of how others view their service. If they can't pay out it doesn't bode well for their future. Having got that particular trade wrong I have little interest in having another go!

Juzzle - I agree that is a good site. I personally (FWIW) have had few problems with Capital Spreads, tried all the others, occasionally use Cantor Index. The main reason I prefer CSpr is the KISS principle and ease of moving stops. The charts are good. Only downside with the charts especially in volatile markets is the requirement to refresh frequently. I only use them for spreadbetting, no knowledge of there CFD platform.

Latest update:

3000 is now 6327.49

Quite frankly, it should be quite a bit more, but haven't maximised profits.

Shares trades are the profitable part of the exercise with 14 of 20 showing a profit and it could be argued that two of the losers were a small part of a bigger position.

The negative aspect are the indicies and FX trades (54 in total of which 33 have been profitable, 16 have been losers and 5 closed flat).

Clearly there are two conclusions to be drawn from the above:

1. I am much better at share trading than I am with the more volatile markets.

2. Despite having more winners than losers with the Indicies & FX I was not cutting losses early enough nor letting winners run; additionally, I know that with some trades the bet size was a little ambitious. Having said that, I was aware this was the case and have been working hard to rectify these aspects.

In fact the last month or so the account has had 21 winners and just 4 losers in this category, showing a profit of 741.45, so perhaps I'm learning!

Hope you're doing ok Juzzle.

well done peter ..... over how long a period?

The first trade was placed in June, but the second not until Spetember, so strictly speaking I've only been active during the last two months or so.

The 14k mission is enduring a bit of a bashing over this past 10 days, and it would not have delivered the planned 375 per week in two of the seven weeks so far without cashing in some positions that I chose not to do. But still looking OK.

I am running a spreadsheet that I wanted to display on a blog - but I am told that my chosen format prevents me doing so. And I'm in the process of very slowly moving house, one carload at a time, so while I have been able to trade, I've not had time to bother with updating a blog. Coming up to the end of month 2, and with several positions banked or stopped out, I now have bets open on 18 stocks, the riskiest one being Avanti (AVN). They are launching a satellite tomorrow evening, the successful or failed outcome of which be reflected in Monday's share price. Unfortunately guaranteed stoplosses are not available on that one - and it could easily move either way by hundreds of points.

Eight quid Monday Juzzle and a tenner by xmas are my conservative estimates for AVN so good luck.

Nice trading pt ... you subscribing to sln2 the sure fire multibagger ? :-)

Dil,

Yep, can't wait to get my sticky paws on some XGEL shares. As proven since the early days of BTL it's a sure fire winner, it made huge amounts of money before finally delisting and going into admin. Oh, hang on a minute, the only people who made money were the founders and all the subsequent scammers; perhaps I'll have to rethink my strategy!

Having a wee punt on AVN, let's hope that feckin rocket doesn't go whoosh in the wrong direction. The launch can be watched on Arianne's web cast tomorrow night. Nice to have a bit of interest in proceedings. I guess if it does go wrong in any way, my SB account is going to get a right good twatting!

My 14k mission (see post 10 & 12) has not gone well enough in recent weeks. Were I dependent on taking the intended 75 per day out of it, the overall total would be down. At present I am on track for a 33% gain for the 12 months. Needed to be doing much better than that.

Hi Juzzle

Sorry to hear not going quite according to plan, however, a 33% gain is probably much better than most funds achieve!

I don't have my laptop with me at the moment, so not too sure where I stand exactly, but think I'm somewhere close to 11,000 representing a 367% increase on the original pot. Curiously, I have not used the profits to any great extent to increase position size or number of trades. The maximum deposit in my SB account at any one time has averaged 4k, although currently 6.5k.

Juzzle - Well Done on your 33% gain! If true that 90% of spread betters get stuffed then you are in the 10% club of winners. We all have different methods of trading/investing thanks for sharing yours and good luck!

I don't see why that 90%-10% thing should be true. Spreadbetting is the same as any other type of investment in that you take a position on the future SP of a particular company and your success depends on the accuracy of that position.

Ok, the spread will be a little wider with spreadbetting, but no so much that a significantly higher proportion lose money compared to any other form of investment.

Where did that statistic come from anyway?

Can I make a very basic observation on that point (post #77)?
Firstly, the Spread betting companies make much of their profits from punters who get it wrong. Hence, if most got it right, they would change their trading rules. Secondly, the Chancellor doesn't tax S/betting for much the same reason. I'm not sure if CC's %age is correct, but his principle argument must surely be correct?
Very interesting thread and tempted to dip my toe into s/betting, but have a natural aversion to trading on margin, so happy to watch for the moment.

ValueMax - .......Better explain.... I first heard that 90% theory five years ago when I first started trading/investing, have heard it quoted many times since, no idea where it originated from or if indeed it is a true statistic. When I first heard it I took it as a direct challenge :O). In hindsight perhaps it should be re-phrased to 90% of the people who try Financial Spreadbetting with either no knowledge, experience ie buying/selling shares, forex,Indeces,technical analysis etc lose. Which unsurprisingly was true in my case five years ago. Got Banjaxed! Today 90% of my trades are spread bets long and short on shares that I either own or have experience trading.

The comment regarding we all have different methods of trading/investing was a reference to Juzzle's method of spread betting ... 14K pot with a portfolio of 40 stocks. I can only aspire to reaching that level. The comfort zone for me is only to have a maximum of three open spread bets at a time. I accept that five years is nothing experience wise, that is why I like this thread. The main objective is to enjoy it, avoid sleepless nights and make a few bob.

Harry - Go for it :O) You have a lot of experience, your predictions and technical analysis on EMG and BA. for the last fourteen months have usually been spot on, all my trades on same have been spread bets, cocked up a few times but have made a few bob on both.

Chris, I believe the 90% figure more accurately relates to day traders and may be as high as a 95% failure rate.

Personally, I don't see spread betting much different to investing through a nominee account, the charges are nearly identical (spread v dealing charges & stamp duty) but with the added bonus of nil tax on profits.

I would suggest anyone considering leveraged products should have sufficient investing experience already in the bag (of the successful variety). Remember to use stop losses based on the overall position and don't use all of your margin, keep some in reserve; unless your timing is perfect every time, some trades will go against you to start with.

ptholden - I agree completely, sorry forgot to thankyou for your posts appreciated, good to see you doing well to!

Chris, doing better with this account since I decided to leave FX and the indices on the back burner, I suspect that is where Eyetrader came unstuck. Also doing a bit more reading to re-learn some lessons of the past. Read most of the Naked Trader over the holiday period and whilst there isn't much in there a seasoned investor won't know already, still some useful info to put into practise. His website is also quite illuminating with a list of his trades over the last few years, which just goes to show you don't need a ten bagger every trade to make good money.

ptholden - Indices and FX a no, no, for me to, fingers well and truly burned in the past. Never say never mind.

Been a follower of Robbie Burns since 2006 attended his Dec seminar in 07 money well spent, got both his books and the new spreadbetting book, that's how I came to trade AFR on the back of it, good chapter. Guys a genius, I quickly learned not to copy his trades though usually up + 20 by the time he posted them :O)

I believe the correct percentage of traders who lose money is actually 96%. Trading is a 3-player zero-sum game where one player (the house) wins every time, provided it doesn't break the game rules.

with enough experience and patience yes it can be done in less than 3 years.

For what it's worth I did it in 14 months - March 2008 to May 2009 - the British Government and I had a falling out so it was partly tax-avoidance research. Plus, so many people had asked me about starting trading with very small amounts of capital I thought I'd try it myself. I hadn't seriously spread bet before then. Those were great times for trading because the markets were really volatile, I imagine it would be a harder trick to pull off now, for me anyway. Having done it I really wouldn't recommend it - and that's what I tell people who ask me these days.

Hilary is spot on with that 3-player game comment. The number of times I read people who are thinking about getting into trading questioning the 90% statistics on the principle that for every trader that wins there must be a trader that loses is frightening. The house is often the big winner and people don't factor that in to their thinking about winners and losers.

That 90% figure is broadly correct - at least as far as the academic research is concerned. Once I hunted down and read the original paper. It exists and it's not an urban legend. As I recall, 5% made money, 5% broadly broke-even, and 90% lost. But it's just a study - there's nothing to say that it's entirely accurate. I strongly suspect it is though. I believe one or two of the spread betting/CFD houses have let slip similar customer statistics on occasion in their unguarded moments.

Actually, K, it's far more than a study. Under NFA rules, US-brokerages are required to make certain disclosures about the state of their clients' accounts. It's from that data that the 96% figure that I quoted above comes from.

Shame about that. Ah well, back to the Ponzi scheme . . .

Either that, DelBoy, or (1) try to work alongside rather than trade against the house and (2) try to ensure that house winnings are kept to a minimum.

And if that fails, you could always re-brand The Concorde Method ....

This from a Wiki page on spreadbetting:

"..According to an article in The Times dated 10 April 2009 approximately 30,000 spread bet accounts were opened last year, and that the largest study of gambling in the UK on behalf of the Gambling Commission found that serious problems developed in almost 15% of spread betters compared to 1% of other gambling. In addition a report from Cass Business School found that only 1 in 5 punters ends up a winner. As noted in the report, this corresponds to the same ratio of successful punters in regular trading..."

Maybe it's just the yanks who are cr@p then.

:o)

Three of the best performers in my sbet portfolio at present are BRK (which broke upwards again today after a long sideways dawdle), Andor (AND), and City Natural Resources HY (CYN).

My 14k mission (post 12) had not gone well enough when I last reported, but is going better now. At present (by close yesterday) I am on track for a 65.75% gain for the 12 months. Needed to be doing better than that, but more comfortable with it now than I was at Xmas.

Got round to checking my account and 3000 is now 11227.71, so my previous guess wasn't too far off the mark.

Two positions currently open, one decently in profit, one showing a small loss. If both positions were closed as I type, I would be precisely half way to 25k.

Update on my 14k mission (see posts 10 & 12)

With 5 months gone, the 14,000 I started with on 1st October is now 18,215 (ie, up 4215 = 30%). Had I been withdrawing 375 per week, those withdrawals would have taken 7875, which would have made too big a dent. So that aspect of the original test would not have worked (and was always a very ambitious idea). Henceforth i will merely continue with growing the 14k pot to whatever level.

Since January 1st I've also been running another pot, starting with 3000 and spreadbetting along similar lines but less actively using barely 20% of the pot at any given moment. That now stands at 3839 (ie up 28% in two months).

Not much change to the SB account since I last reported two months ago. Managed to side-track myself back into FX for a few weeks in January with very poor results, but offset by profits in CEY and AUL and an excellent DJI long today; also took a small loss on RGM.

End result, 3000 is now 12,080.

Must admit, I've been feeling quite nervous about opening new positions since the New Year and have hardly traded at all. Actually, that's probably not a bad thing, apparently the biggest SB losers are those who trade too often.