Spread Betting..is it this simple?

[pboi]

The following is a brain dump based on my experience of spread betting so far..I would very much appreciate your views.

IMO, spread betting is about identifying a trend in your chosen market, and to buy/sell accordingly.


Assuming you have a method of accurately predicting a trend….and the trend continues circa 3 days, and makes some sort of movement in the direction you have predicted..you *will* make money right?

Does this sound too simple, have I missed something here? I myself identify the direction a market is going, and then put a trade down when the trend changes. I have not decided if rolling daily or futures best serve my cause here. I also sometimes to intraday entrys, based on the Camarilla equation.

It all seems too simple to me - if the trend continues you have success..if the market is sideways, you wont make money…and if the trend isnt accurtely identified/market doesn’t follow the game, you will lose money.

If this is correct…the market more often than not follows a trend…so in the grand scheme of thing..you make money?


Is it this simple? I am almost wishing you to tell me no.

 

[cabrito]

you are very right...the general scheme of things is to get on a trend and get off just as it is ending.However to paraphrase'objects in the mirror may appear closer than they appear',its not all it seems,which would neccesitate a lengthy reply.Judging from your questions,futures or SB may not be the right way for you to start off.Try a demo or trade a few shares to get the hang of things first.Oh,and have a look at the Trading Lab too
best wishes all the same
:cheesy:

 

[TheBramble]

pboi - forget the mechanism you're using to trade (in your case, SBing) for a moment. There's an issue of more basic trading methodology I'd like to address.

Identifying a trend that is in progress is reasonably straightforward. However, "a method of accurately predicting a trend" would be a useful skill to posses. Sounds like, let me know if I'm wrong, you're attempting to pick tops and bottoms? Bad move IMO. A far better approach if you're trading the trend is to (a) wait until it's clear these is one and (b) trade it in the direction it's going and then (the tough bit) (c) have a method of establishing when the trend no longer appears to be holding or meeting your trend-is-holding criteria and exit.

If you think all of the above means you're only likely to grab a half to 2/3rds of any trend - you're right.

But you'll have more consistent success, not to mention a far rosier P:L if you do go for this slightly more obvious approach.

Back to SBing.

They are prone (driven?) to slop the spread around and it's not normally in your favour. It's not personal, they're not looking at your bet (unless you're relatively big on size and/or developing a winning (for you) track record), but on aggregate.

If they feel the markets heading up, they'll skew their spread and their prices in a direction to minimise your gain and maximise theirs. You'd do the same.

Why this comment relates to your query is that if you're typically talking about 3-day trends I assume you're trading a daily timeframe? This isn't enough time to cover (a) thru (c) above and even if you could, the SBV would make a monkey, or at least deep inroads, into your Aw.

So my suggestions are:- (1) dump the SB and use a broker. (2) Trade a shorter timeframe than the one you're using to determine what is, in your system, a trend.

hth

 

[Lightning McQueen]

IMO, spread betting is about identifying a trend in your chosen market, and to buy/sell accordingly.

Assuming you have a method of accurately predicting a trend….and the trend continues circa 3 days, and makes some sort of movement in the direction you have predicted..you *will* make money right?

Well i hope so as you appear to be on a similar track to myself although as a newling im not there yet with a plan for this

This thread looks very promising for us indeed if the right people post their views good or bad.

keep up the quest

 

[pboi]

I have been trading with a demo accounts for 4 months or so, and am looking at 600 points or so rough profit, and that is with serious experimenting.

As for picking tops and bottoms..I dont really know what that means but I use them to identify trend yes. Lets say I take 5 days of data, take a value, then see when the value changes its trend. Then I enter..and either take a profit when im happy, or move the stop loss up to lock in profts.

the 3 day comment was just an example, I have traded intra day and I have held positions while they have gone sideways, then dramatically gone in the correct direction after a few days. tbh I really dont know enough outside my realm of experience so far..but it seems to work. I am forever the cynic .

Using a broker, I simply dont have the capital to make it worth while.


it is entirely dependant on there being a trend. I only trade indices by the way..and they have been going up and down forever

I am also of the mind set its not about how many points you grab..its about getting the 'safest 'points you can, put putting more £ per point on it.

am I making sense?

 

[the blades]

I have been trading with a demo accounts for 4 months or so, and am looking at 600 points or so rough profit, and that is with serious experimenting.

As for picking tops and bottoms..I dont really know what that means but I use them to identify trend yes. Lets say I take 5 days of data, take a value, then see when the value changes its trend. Then I enter..and either take a profit when im happy, or move the stop loss up to lock in profts.

the 3 day comment was just an example, I have traded intra day and I have held positions while they have gone sideways, then dramatically gone in the correct direction after a few days. tbh I really dont know enough outside my realm of experience so far..but it seems to work. I am forever the cynic .

Using a broker, I simply dont have the capital to make it worth while.


it is entirely dependant on there being a trend. I only trade indices by the way..and they have been going up and down forever

I am also of the mind set its not about how many points you grab..its about getting the 'safest 'points you can, put putting more £ per point on it.

am I making sense?

Hello Pboi,

It's simply about buying low and selling higher (all trading), but it's difficult to determine low and high.

If you've made money trading indices, make sure you wouldn't have made just as much money on "buy and hold". If you've made money shorting this market, you may be onto something. If you've made money being long, make sure you weren't outperformed by a copy of the financial times and a dart.

All the best,
UTB

 

[pboi]

shorting and longing- its all the same to me in this system. success both ways.

 

[the blades]

Back to SBing.

They are prone (driven?) to slop the spread around and it's not normally in your favour. It's not personal, they're not looking at your bet (unless you're relatively big on size and/or developing a winning (for you) track record), but on aggregate.

If they feel the markets heading up, they'll skew their spread and their prices in a direction to minimise your gain and maximise theirs. You'd do the same.

At the risk (actually, it's way too late for that ) of sounding like a stuck record, I would have to balance Tony's point by referring you to the "cost of spreadbetting" thread. Either I'm the luckiest man alive, or it really isn't the case with UK stocks.

UTB

 

[Splitlink]

On the 3rd I bought to open SN at 507, to see them go up to about 519. Yesterday morning I saw them go down to 508 and was on the point of selling and they recovered to 513. Now they are at 525.

So, what am I? A mug for not selling yesterday before going back into a loss? Or a mug for not adding to the bet? Or a mug for not taking my profits now? Let's just say that I am a mug for something or other.

I am a position trader, but it takes some nerve at times because of the old adage "Don't turn a profit onto a loss" . Easier said than done and, if I had had a stop on just above breakeven, I would have been out of the trade now.

Split

 

[Tuffty]

am looking at 600 points or so rough profit

This could be the result of:-

1) Luck (ie randomness)
2) Skill / an edge

Given this comment:-

Is it this simple? I am almost wishing you to tell me no

I'd say you would be tending to think it's far too easy so I'd put my money on 1). However, don't let me put you off. You just need to be sure in your own mind what's going on.

 

[anley]

You're 100% right pboi, it is as simple as that in THEORY!

But you nor anyone else can predict the future so in turn it's actually a lot harder in practice.

Good luck anyway, start trading very small and then increase your size every 3-4 months. The odds are against you (and anyone else, including me) but that doesn't mean you can't make a fortune.

 

[Persian]

Any tools or sites to recommend or that is usefull ?
Can technical analysis be used for Spreadbetting?

 

[pboi]

then how long should I trade with fake money until I can have basis to calm my cynicism...it seems like a catch 22.

if the theory is right..as we need to do is find a method of identifying a trend in a market. Lets talk solely indices here -they go up and down, they have always done. so looking at the patterns and figures of a market, lets say the DOW.....would it be not out of the ordinary to ride trends, use trailing stops....it sounds like safe money as long as the trend is followed more often than not..which I believe it is?

 

[neil]

then how long should I trade with fake money until I can have basis to calm my cynicism...it seems like a catch 22.

if the theory is right..as we need to do is find a method of identifying a trend in a market. Lets talk solely indices here -they go up and down, they have always done. so looking at the patterns and figures of a market, lets say the DOW.....would it be not out of the ordinary to ride trends, use trailing stops....it sounds like safe money as long as the trend is followed more often than not..which I believe it is?

Try real money ( say £1 a point so you only use money you can afford to lose).
Start with a small amount (£1000) and spreadbet for a year or until you are £1000 down.
Stop talking about it and try it with real dosh to see if you still think it is "easy."

 

[pboi]

1000 £ to a graduate worker, city of london, fresh out of uni, is unobtainable

I dont recall saying anywhere I thought it was easy, I am forever the cynic. Take your uncalled for agro elsewhere.

where is my logic flawed, I am asking for people to point it out! I want to be told this is wrong.

 

[Trader333]

If you are unable to afford £1000 then it is highly unlikely you will be able to survive in my view. Based on this it would be a good idea to paper trade until you have sufficient funds available but whatever you do I suggest that you dont borrow the money to use on spreadbetting.


Paul

 

[the blades]

1000 £ to a graduate worker, city of london, fresh out of uni, is unobtainable

I dont recall saying anywhere I thought it was easy, I am forever the cynic. Take your uncalled for agro elsewhere.

where is my logic flawed, I am asking for people to point it out! I want to be told this is wrong.

Hello Pboi,

Your logic as presented isn't flawed. But you haven't given much away.

You need to know if the results you've had "watching" can be replicated real time. Neil's point ( maybe) is that once you put money on the line, it is much more difficult to stick to your methods - especially if £1,000 means so much (I hope that doesn't sound condescending).

If you can replicate your results, you're onto something. You then need to question how robust your methods are - will they continue to work as the market changes, and can you adapt?

Good luck,
UTB

 

[neil]

Blades comment

Hello Pboi,

Your logic as presented isn't flawed. But you haven't given much away.

You need to know if the results you've had "watching" can be replicated real time. Neil's point ( maybe) is that once you put money on the line, it is much more difficult to stick to your methods - especially if £1,000 means so much (I hope that doesn't sound condescending).

If you can replicate your results, you're onto something. You then need to question how robust your methods are - will they continue to work as the market changes, and can you adapt?

Good luck,
UTB

Thanks Blades - thats exactly what I meant.

 

[pboi]

ok, now I understand. I am thinking of starting a diary on here, not wishing to over saturate the market with them, but maybe it could be beneficial.


and one thing I dont think I will ever get to grips with, is using real money. My short experience doing it, was unsuccessful, and very very stressful !

As for being able to adapt, at the moment i would say no. If the market has trends, I believe I will have success..if the market goes sideways/doesnt follow the trend, i believe I will lose money.


hmm food for thought here.