everyonerich
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sorry i didnt mean that.
sorry i didnt mean that.
megamuel
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Hi Klastica,
So basically you are saying for every 20 points the FTSE goes down you will put another small bet on... Goes down 20 points again put another bet on etc etc...? With the hope that it will go above where it is today and you will be in profit on all the trades? I see how you are thinking, I've tried to think of things like this many times before. However, what if the ftse gradually went down for 2 years to 2000 or so. Doubt it will happen but what if it does? You have made 110 bets, each one loosing money eating into your margin. You might not make any money for 2 years in this case, and you might run out of capital, in which case, you'll be screwed! Not wishing to cause any offence but I find it hard to believe that someone who can't spell ridiculous could have £500,000 to play with. I'm guessing it was a hypothetical question and not something you are planning on doing? If not, maybe you are better giving that £500,000 to me to trade! Hate to break it to you but everytime an idea comes to your head and you think "Thats an easy way to make money, great!" I'd put money on it not being possible or having serious flaws (I've just come out of that phase after months and months of trying to find the easy way!). You need to spend your time developing a more comprehensive strategy if you want to make money trading. Best of luck,
Sam.
So basically you are saying for every 20 points the FTSE goes down you will put another small bet on... Goes down 20 points again put another bet on etc etc...? With the hope that it will go above where it is today and you will be in profit on all the trades? I see how you are thinking, I've tried to think of things like this many times before. However, what if the ftse gradually went down for 2 years to 2000 or so. Doubt it will happen but what if it does? You have made 110 bets, each one loosing money eating into your margin. You might not make any money for 2 years in this case, and you might run out of capital, in which case, you'll be screwed! Not wishing to cause any offence but I find it hard to believe that someone who can't spell ridiculous could have £500,000 to play with. I'm guessing it was a hypothetical question and not something you are planning on doing? If not, maybe you are better giving that £500,000 to me to trade! Hate to break it to you but everytime an idea comes to your head and you think "Thats an easy way to make money, great!" I'd put money on it not being possible or having serious flaws (I've just come out of that phase after months and months of trying to find the easy way!). You need to spend your time developing a more comprehensive strategy if you want to make money trading. Best of luck,
Sam.
HI Sam
Thanks for your time.
If the market dropped gradually over 2 years that's not that bad. On the way down there would be plenty of oppotunity to make money with the peaks and troughs of decline. The system (if it is a system) doesn't rely on the market completely returning back to square one to make money.
If you start with enough money to cover every bet down to zero any money made could be utilized to do additional bets or higher staked bets.
I have been paper trading this over the past 2 weeks using the CAC and I have made £5k in two weeks in a falling market.
If I was working with the FSTE which is slightly more volatile than the CAC I could have made 6k in two weeks. 3k a week works out to be about 150k a year which means at the end of 2 years I would have £300k which could be placed on higher staked bets at the lower end of the market.
I know this is all a bit simplistic but you have quoted a worse case senario and in reality it wouldn't be that bad. People on here have also said things like 'what if the market went to zero u'd lose everything?' Money would be made all the way down to zero and some hefty down bets on the market moving decisions and world events that took the markets down.
A favourable CATCH 22 situation.
If the markets fall much more there will be really good reasons for it. AND those reasons I would trade along with (probably in another market - Wall ST).
I'm not saying this is great or anything. I have come on here to ask people to pick holes in my first thoughts into beating the market. YES it's not original. BUT with no trading experience I believe I have something that in all senarios would make some money each week. Not the most efficient way of using £500k i'm sure but none the less something that would turn a considerable profit over time.
Hi Klastica,
In these troubled times there is a lot of difficulty in investing at a good interest but, if I were you, I would look for somewhere to put the main bulk of the 500k and trade with the interest or with a fraction of the main capital.
Averaging down has been thought of before and there are plenty of books that will explain why it is wrong. This is the first time, however, that I have seen such a large amount---it must be that I am getting older and money is losing its value!
One of the problems why I find your system wrong is because it is a plan that, once started, you cannot get out from, without losing a lot of money. You are not taking into consideration that your circumstances may change over a long period. It is worse than a 120% mortgage and I should read up Murphy's Law.
Everything seems bright and rosy in the beginning and I'm not saying that you are not right, only that to be wrong is a disaster. Calculate your risk/reward before you go into it ---
Regards Split
In these troubled times there is a lot of difficulty in investing at a good interest but, if I were you, I would look for somewhere to put the main bulk of the 500k and trade with the interest or with a fraction of the main capital.
Averaging down has been thought of before and there are plenty of books that will explain why it is wrong. This is the first time, however, that I have seen such a large amount---it must be that I am getting older and money is losing its value!
One of the problems why I find your system wrong is because it is a plan that, once started, you cannot get out from, without losing a lot of money. You are not taking into consideration that your circumstances may change over a long period. It is worse than a 120% mortgage and I should read up Murphy's Law.
Everything seems bright and rosy in the beginning and I'm not saying that you are not right, only that to be wrong is a disaster. Calculate your risk/reward before you go into it ---
Regards Split
barjon
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Hi, Klastica
Four points:
1. If it was a good idea then everyone would be doing it including the professionals and institutions. The fact that they don't should sound the clearest warning bell of all.
2. Your couple of weeks paper trading has been aided by current volatility and it's what happens during a sustained and continuous fall that is likely wipe you out.
3. If you are spreadbetting you haven't included the costs in your calculations. If you got a sustained fall you will have a very large overall position running and the overnight charge for holding it will be mightily significant.
4. You talk of "making money on the way down" to soften worst case scenarios, but how? Yes, there would be plenty of opportunities but no-one lacks for those - it's taking advantage of them that people find difficult!!
good trading
jon
Four points:
1. If it was a good idea then everyone would be doing it including the professionals and institutions. The fact that they don't should sound the clearest warning bell of all.
2. Your couple of weeks paper trading has been aided by current volatility and it's what happens during a sustained and continuous fall that is likely wipe you out.
3. If you are spreadbetting you haven't included the costs in your calculations. If you got a sustained fall you will have a very large overall position running and the overnight charge for holding it will be mightily significant.
4. You talk of "making money on the way down" to soften worst case scenarios, but how? Yes, there would be plenty of opportunities but no-one lacks for those - it's taking advantage of them that people find difficult!!
good trading
jon
megamuel
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Ok so lets say you go long now (tomorrow) at about 4200.... and then it drops to 3800.... You go long again at, it goes to 3830 and you take your profit. If your going £2 p/p thats £60 profit on second bet but your still holding a £800 loss from the first bet. How do you expect to make money like that? You talking lots of small profits and holding on to or taking large losses. You'd be better off just going long and leaving it for 2 years. It sounds like your dead set on trying it anyway, in which case best of luck and don't say you haven't been warned! In some ways its good because doing something and stuffing up is often the best way to learn. Not saying you will stuff up mind but keep us updated on your progress!
Sam.
Sam.
I'm not dead set on doing anything yet. But people saying it wont work cos it wont. Or the best traders don't do it so it's rubbish. These kind of comments don't help.
You don't seem to have the figures correct. I bet everytime it falls 20 pts not 400. Yes if it continues to drop I have a loss position but I can wait til it comes back to claim.
Also the overall position needs to be taken into account. The markets have dropped considerably over the past 18 months and although it could drop further there is probably a limit on how far it will drop.
In my opinion the markets could drop 20/30% in the next year but they will do so (if they do) with an element of volatilty. And in my opinion even if they drop the markets will come back to some extent by the end of the year. The Bear market is due to end before the end of the year.
If the markets dropped 40 50 or even 60% al bets would still be live and a reasonable amount of money would have been made in that timescale. Thus allowing for Bigger bets at the lower end of the scale.
Hold on to it untilit turns to profit
N Rothschild
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why dont you just learn to trade?
if i had a 500k acount i would be up over 100k for wed/thurs/fri day trading on a 2.5% risk basis.
if i had a 500k acount i would be up over 100k for wed/thurs/fri day trading on a 2.5% risk basis.
Are you saying you would make £100k a week with £500k?
N Rothschild
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i would have done last week yes, doesnt mean that would happen week in week out..but i would like to think so... i was 11 for 0 last week
megamuel
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Klastica,
If the ftse went down 400 points like it did on 15th Oct and you put a bet on every 20 points it went down, you'd be sitting on a £8400 loss! It went down 600 points on the 29th of Sept! Sh1t the bed! Over time you could accumulate lots of big loosers when only taking small profits. Thats a very bad thing! Maybe Genics will tell us all how to do it properly 😉
Sam.
If the ftse went down 400 points like it did on 15th Oct and you put a bet on every 20 points it went down, you'd be sitting on a £8400 loss! It went down 600 points on the 29th of Sept! Sh1t the bed! Over time you could accumulate lots of big loosers when only taking small profits. Thats a very bad thing! Maybe Genics will tell us all how to do it properly 😉
Sam.
If you was anywhere near that return on a weekly basis your yearly return would be quite spectacular. How do u trade? Do you spread bet?
I know the figures
N Rothschild
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yes i do but i dont like to..would much rather trade futures but then i dont like to pay tax..bit of a dilema..
Correct me if I am wrong but if margin for Footsie is 200 times bet size and you go short at 4100, when it has gone down to 3900 you will have to place more margin for that bet. In addition, by then you will have opened 10 other bets, with the necessary margin and which, as they go down, will be subject to their own margin calls.
I'm not going into the sums, that's for you to work out, but I suggest that you do not go down that road. There are better ways to make a living, especially with that much money.
You say "in my opinion even if they drop the markets will come back to some extent by the end of the year" Trading is done on the law of probabilities. What do you think the probabiliy is? I won't trade overnight except on very rare occasions and only then when I am in profit at the end of the day.
Can you explain the margin thing again. Not really sure what you mean but it does sound dangerous
FXSCALPER2
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The probability of the market coming back to give him 20 tick profits (and allowing him to make lots in the short-medium term) is extremely high, while the probability of him losing all his money trading decent size with stops, indicators and the like is much higher.
