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

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).