Can you really make money spread betting

[pit pony]

hmm i think you can...im currently demoing the CMC platform. I really enjoy it, the gui is great. While watching bloomberg they were talking about the increase in gold and what not...So i put £50/pp that the price will go up. In a space of 30mins i made over £380

Im still getting to grips with it all, so im probs talking out my ****. But i can see the enjoyment out of it "when you get it right" I guess. From what i have learnt in a few days, is practice and practice with a decent demo account. I am currently using 3 platforms. SpreadCo / City Index / CMC / to see which one i prefer. Just takes time i guess. Knowledge is power and all that.

Paul

everyone to their own, but i used to use 2 of those you are testing, when you constantly make money evrything will change regarding re quotes and slow fills.
As i say up to you, but i recommend ProSpreads, its fast with instant fills, i think that may be better for you specialy in your size.

 

[Angry Squirrel]

Sounds like you need to work out your Reward Vs Risk management, Using stop losses and a target sell/buy price (buy/sell limit). I was told only ever risk 1-2% of your trading acc on any trade. Let the profit compound, allowing you to put more on per point. I'm making profit every month but I'm letting the acc balance compound before starting to pay myself.

 

[leonarda]

It's taken me two years to consistently (read monthly) generate a return. That may sound a lot of time given the 2009-1010 equity bull market, but I run a portfolio on a long/short basis & market neutral (+/- 10%) with the aim of generating low volatility - as I like sleeping at night and dislike spending my time behind a screen watching prices.

I can't talk for you if your approach is based on Technical Analysis, as mine is 80% fundamental. Spread-betting works fine with me because I don't day-trade/scalp but keep positions open for a few weeks / months looking for anything between 5% to 25% profit. I obviously check the L2 prices elsewhere before I deal.

My setting is fairly modest and low-cost:
1 yearly subscription to the FT
1 yearly subscription to Investors' chronicle
1 diary where I write down a summary of the day's news as well as expected events.
CNBC & Bloomberg TV over the internet, ransquawk, BFM radio (live French biz news)
2 pay-as-you-go mobile phones and recorders to record conference calls that aren't webcast/can't be replayed
2 computers with wireless headsets

I 100% agree with your methodology, I trade using fundamentals and TA, with positions from 1-3 months. For example I would never go Long a stock that had bad fundamentals, instead I look for a Stock that has growing dividends, good revenue, low net-debt, good last "Report", promising outlook and be in a strong sector, etc.. along with good price action. Only go with the long term market trend, and confirming price action, etc.. Works well, typically gain between 5-30% on good moves, similar to you, and losers I cut at typically -5%.

 

[potshot]

The secret to making money spreadbetting is discipline. You make your rules and stick to them and I believe the biggest contribution to people losing is moving the stops so they are not knocked out, and then they move it again and again and then realise a big loss instead of a small lose. I have heard people say they lost a whole months profits on one stupid trade and it is something what no trade should let happen.

When I make money there is no way I am giving them back more than 5% of my profit in a month

 

[jtrader1001]

I have to admit many of the traders I speak to have lost money, especially over the last year in spread betting. Discipline in going in and out of trades is key however for the novice it is extremely difficult. Sometimes the worst situation is when you start off by making a profit which often goes to your head and your next few trades are perhaps a bit rash and with wide stop losses or none at all- this can wipe out your positions!

 

[costaricachris]

I have to admit many of the traders I speak to have lost money, especially over the last year in spread betting. Discipline in going in and out of trades is key however for the novice it is extremely difficult. Sometimes the worst situation is when you start off by making a profit which often goes to your head and your next few trades are perhaps a bit rash and with wide stop losses or none at all- this can wipe out your positions!

I agree with the sentiments here. I'm curious to what time people think is the best for trading. I must admit I usually go for between 8:30-10am, i'd be interested to know what time you guys usually trade.

 

[jtrader1001]

You have very little room for price movement with £300 which you need for short term trading. With broker fees included a small movement will tick you out quickly.

 

[pit pony]

You have very little room for price movement with £300 which you need for short term trading. With broker fees included a small movement will tick you out quickly.

I agree with just £300 in your account its a game, never going to make any good money out of trading just lose as you will be getting stopped out all the time.

 

[Ross Spur]

I agree with just £300 in your account its a game, never going to make any good money out of trading just lose as you will be getting stopped out all the time.

Not necessarily true, if you went long on oil a few days ago.

 

[pit pony]

Not necessarily true, if you went long on oil a few days ago.

If they would let you into the trade that is.

 

[twicebitten]

This is how I lost my money. I would look at FTSE 100 shares that had crossed their 40 day moving averages. Then I would look at the MACD to confirm the movement in that direction. I would then look at the candlestick chart for confirmation and also a guide to where to put the stop loss. Then the trade was placed and hey presto, it goes the other way and I lose!!

A friend of mine has been trading for years but will not spread bet, he says it is safer to actually buy the stock and then sell at a higher price and reckons the best way to lose money is to spread bet.

Any thoughts on this and my useless chart analysis method?

Having been in Financial services the whole of my working life I would make the following comments.

Unless you are trading in large volumes and have extensive resources you are unlikely to make money over the short term out of buying and selling shares.
They are considered to be a five years + investment

They differ from spread betting in as much as if the company is in profit it will deliver a 6 monthly income known as the dividend
If you hold the shares long enough the dividend will ultimately pay for the cost of the share

Spread betting is gambling on a market trend not an investment at all

I would echo other comments pracitise ,practise, practise on a demo spread betting account

If you can't make money on that why go live?

I have lost £1,300 in earlier ventures and have have now been practising on a demo for 2 years
It is actually good fun as it is not your own money but I carefully regulate my positions and at last starting to make a profit

I personally have not made money out of long term positions but have on daily trades

Market movement is generally much more active at the start and end of the trading day and it is easier to spot a trend

Be careful you don't get addicted!!

 

[Pat494]

Be careful you don't get addicted!!

I think most of us have tried different time frames. I am currently on a 1 minute tf as my patience won't suffer any more waiting around. Longer tf then greater stops. One can watch the 1 min as it rarely goes over 20 mins and even play without a stop but MUST have a plan of when to close if it goes wrong or suffer the " bunny in the headlights" syndrome !

 

[gamma]

Spreadbetting is merely another medium, a conduit to the market.

People lose at spreadbetting because of their own inadequacies and limitations
there is a more than likely chance, that if you lose at spreadbetting, you will also lose whatever means you use, to get to the market.
A 1 minute time frame should only be used for timing a good entry and exit, at predefined points,
same goes for the stop loss, there is no need to have large stop losses, if you find good entries.
The stop loss should be used, as a breathing space at a good entry point and no more.

I do wish there will be a better word used for "spreadbetting"
It paints a very negative picture of the whole industry

 

[twicebitten]

Spreadbetting is merely another medium, a conduit to the market.

People lose at spreadbetting because of their own inadequacies and limitations
there is a more than likely chance, that if you lose at spreadbetting, you will also lose whatever means you use, to get to the market.
A 1 minute time frame should only be used for timing a good entry and exit, at predefined points,
same goes for the stop loss, there is no need to have large stop losses, if you find good entries.
The stop loss should be used, as a breathing space at a good entry point and no more.

I do wish there will be a better word used for "spreadbetting"
It paints a very negative picture of the whole industry

There must be alot of inadequate people out there!!
How do you define a good entry and exit strategy at pre defined points.
I ask this only to learn. I have made money on shares unit trusts and OEICS over a 5 to 7 year period but cannot crack spreadbetting.

You are not holding a tangible product with spread betting. It is defined as gambling as the tax man does not tax any profits you might be lucky enough to make. Hence why it has the word betting in its title.

Don't get me wrong I am not against it. I have had a go and have accepted the risks. I have lost money thus far. I like many others I suspect are trying to find out where I am going wrong and would appreciate any constructive advice.

 

[tommac]

There is one main reason the so called "90% of retail traders fail" and that is a lack of information. Remember, the Institutions talk to each other. The brokers also have an idea of positions held.
I used to trade forex for a large IB and now trading from home it is mainly guesswork .All the T/a in the world isn`t going to help if one of these guys decides he wants to dump x or take a position in y to balance his book.
That`s why there are 1000`s of posts on bb`s like this trying to find the answer.Rant over !!

 

[twicebitten]

There is one main reason the so called "90% of retail traders fail" and that is a lack of information. Remember, the Institutions talk to each other. The brokers also have an idea of positions held.
I used to trade forex for a large IB and now trading from home it is mainly guesswork .All the T/a in the world isn`t going to help if one of these guys decides he wants to dump x or take a position in y to balance his book.
That`s why there are 1000`s of posts on bb`s like this trying to find the answer.Rant over !!

I think you have made a very important point there . If you are a professional you have information streaming in from all angles. Working from home it is not the same you can really only anaylse one set of information at a time. I have noticed at certain times the volatile markets like oil or US 30 suddenly move rapidly for no explicable reason.

If you are on the site at the time you can make an immediate gain. if you chase the same route again 5 minutes later you make a loss.

Thanks for your input.

 

[thurstan]

My first attempts at trading was on the Daily DOW/IG a good ten years ago, overall I lost and from that point I have been on a trading journey. To jump into trading the DOW as a newbie was ridiculous to say the least but without a shadow of a doubt it highlighted my inadequacies, for the past five years I have been trading the pre-race horse markets on Betfair and has enabled me to really get to grips with trading psychology, money management, discipline etc etc...
I think the pre-race markets are arguably one of the hardest to master and the financials seem p*** easy to trade now (forex), I just grab a few ticks here and there, no more than 10 ticks at a time and I trade purely with TA...........

Just my two bobs worth.

 

[hoodoo man]

Spreadbetting is merely another medium, a conduit to the market.

People lose at spreadbetting because of their own inadequacies and limitations
there is a more than likely chance, that if you lose at spreadbetting, you will also lose whatever means you use, to get to the market.
A 1 minute time frame should only be used for timing a good entry and exit, at predefined points,
same goes for the stop loss, there is no need to have large stop losses, if you find good entries.
The stop loss should be used, as a breathing space at a good entry point and no more.

I do wish there will be a better word used for "spreadbetting"
It paints a very negative picture of the whole industry

This is a great post.

I agree with just £300 in your account its a game, never going to make any good money out of trading just lose as you will be getting stopped out all the time.

Only if you treat it like a game. A good trader could run a £300 spread betting stake into tens of thousands within a year.

Why "just £300"? That tells us a lot about how you view the value of money and how much respect you have for it. £300 is only a game to you? You would trade better with £30,000? £300,000? You get the idea.

 

[Truth Seeker]

You can win at spreadbetting, but first you need to find your style you're happy with (swing trading/day trading/scalp trading). Then you need to implement good money management (only risk a certain % of account on each trade, say 2%).
Then you need to find a half decent sb company. Now this is where it get's even harder as they all profit on your losses no matter what they tell you as you're trading their market, not the real market.
CMC are one of the worse for dirty tricks in mine and thousands of other traders experience. FXCM are not too bad but go over £30pp and the slippage begins.
GFT are about the same as FXCM. I never touched finspreads personally because of nightmare stories. Can't say about the rest, but the point they work against you should give you the idea. What I do is whack in loads of smaller orders (£10pp) X10 etc when firing off trades, it seems to work more often than not. SB firms are really hard to scalp, they hate them, so go careful that style.

 

[s3ba5t13n]

I have recently started spread betting having spent months studying the subject. I started with £300 and within 1 week had lost the whole lot! My best position was £5 in profit. The rest just ran at losses even though I studied the charts for ages. I am concerened about putting more money into this without knowing if it really is as good as the companies say. I read on msn a recent survey of the spread betting firms that said 90% of traders lost their money and that companies such as IG index are seeing massive growth in their profits. Is there anybody out there actually making money spread betting?

Seriously, I think it's possible ,I have invested £200 during the first hours i made £600 main problem , greed! i wanted more quickly and was playing without any stop loss ( I know Silly) you can imagine the result. the best way for me : spend time in demo mode (a lot) ,fallow the market activities, don't fallow too much tracker choose few currencies, future and commodities, you like and stick on it. you will know how they react, some stock react quickly than other.
£200 /£300 is not enough to start really better if can its to start with £2000 ( I sincerely think and i'm like you a rookies), Avoid to put your eggs in the same basket !


I don't feel ashamed to loose £200 , just feel silly and purely incompetent !