spread betting profitable or waste of time??

[cragzy]

hi,
i have been reading these threads about spread betting and i am starting to get confused.
most of the comments are against SB.
ihave been paper trading now for 8 weeks and have made only one loss out of 12 trades.
could you give me your thoughts on SB because if i was to belive the majority i would be a fool to try my hard earned cash

all comments are apreciated

 

[Skimbleshanks]

As you've done some paper trading, why don't you try SB and see if you like it? But use small bets or, better still, tiny bets. Don't let your 11 wins:1 loss ratio rule your head and make you think that you can bet large.

And let us know how you get on.

 

[donaldduke]

cragzy,

As stated in the other thread 97% of accounts lose money,
this is estimate as exact industry figures are not available,
but the figure sounds about right.

There are 100,000 open SB accounts then 3000 actually
make money ..

So thousands of people are actually making some money spread
betting, this is good to know

What this means it not impossible to make a profit however it
it also means it is very hard to do so..

Now do you think you can be part of that 3000 or so?

The best way to find is simply open an account and place
1 pound (or smaller) bets. Youll then find out if your system
is any good without losing too much money.

Finspread even let you place 1p bets in the first two months
after you open your account.. However you should probably
bet a bit bigger than that so the emotions associated with winning and losing start to kick in..

 

[Rainmaker]

spreadbetting is just a tool. it isn't spreadbetting that loses people their money. it is trader psychology. plain and simple.

 

[User]

I agree with 'rainmaker'.

Its a tool/method of making money in the markets.

Money is not won or lost, it is money transferred from 'winners' and 'losser'.

97% or what ever the figure which I believe it to be over 90%. The simplicity is the rich get richer and the poor get poorer.

Physchology is 97% of this whole 'game'.

I could identify trades which would get 'this many points' and 'that many points' the main part which makes each different from one another is the phschylogical role we play in our trading activity.

Oh and 'cragzy' No one talking SBetting down, however the chances of a newcomer or amateur making money at a consistent level so that they don't get cleaned out are simply 97% against you.

Goodluck. :cheesy: Trade consistently, you'll be fine.

 

[adrianallen99]

The problem with spreadbetting is many people see it as a get rich scheme. You should treat it no different from trading any other way.

You buy/sell/trade/bet a stock/indice/currency because you think it is going to go up/down over a said period. If you make more money than you lose over time you will be profitable.

Where many people fall down, is because they dont have enough money, they risk too much, etc.

I currently use 4 different account, 2 have pretty much been wiped out, 1 is down by about £20 and the other has made decent profits. The profits of the one account outweighs the other 3 losses. But if those account are seen as individuals - 75% have lost money, even though overall I have made a profit.

Dont get too bogged down with statistics, be aware that it is risky and follow a decent set of rules. You can make money, but you may lose money.

 

[User]

It's like with 'anything' you don't know until you tried. The only thing is in this industry you need to try harder then any other to succeed.

Newcomers have got it real tough, and there objective will obviously be to make money but I think it really should be to 'stay alive'.

The longer you keep at it the more you gain in terms of knowledge.

Hear all you want, take in facts not what you want to believe and then ExeCutE!

 

[Glenn]

Cragzy - perhaps a silly question, but I'll ask it anyway.
When paper trading, have you been using the price quotes from the SB company for your entries and exits, or are you papertrading a chart on it's own and using the prices from the chart ?
If you are not using the SB prices, then be prepared for a bit of a difference when you do.
Glenn

 

[TheBramble]

Cragsy - there are a couple of issues.

1. Paper trading results rarely translate into as good a set of results in reality. Slippage, working in real-time, 'real' market action and your response to it etc. all conspire to generally weaken what was a real winning system on paper.

2. SBs do not offer the best deals in terms of spreads (they're normally relatively large); some SBs have been suspected of 'spiking' out stops; some are suspected of running stops (especially controlled risk stops) and if you manage to beat them on a large scale some have been known to make it difficult-to-impossible for you to get a fill.

SBs do offer an 'in' to trading if you're starting out with small capital (which I really hope you are), but use them to your advantage.

1. Continue 'paper' trading, but use your SB account to actually log the prices you would have got filled at when you open and close a position. As if you were actually hitting the button. Do all the normal risk/reward stuff before you enter of course.

2. When you're confident you've got a good system - start small (as many have said already - really small).

When you've done that consistently for a few months - up the ante to the risk level (of your total trading capital) that you plan on using when trading full-time.

When you've got enough in the trading pot in 18 months time - get a proper broker (not a bookie) and trade your instruments of choice with lower spreads and commissions.

Alternatively, you can do what most of us did and just jump right in and join the 97%....

 

[Naz]

Many day trade with spread betting.If you pay the spreads and trade a market that doesn't move then the paying the spreads will cost you dearly.

Many shift to trading the Dow.However they're still paying larger spreads than a level 2 direct access trader who can take the same moves with the Diamonds and at times not pay any spread at all.

Trading is just like running a business.Cutting costs first of all makes good business sense.

A quick way to think is this.How much extra today would i have made if i hadn't paid any or much smaller spreads? With day traders thats their profits going up in smoke day after day.

However, looking for longer moves cuts down the reliance on any spread but most short term traders find this hard to do and grab quick profits and hold on longer to loosers.

Spreadbetting seems to attract beginners who natrually do all the wrong things and pay larger trading costs.This will eventually result in those figures that have been quoted in this thread.

 

[grubs50]

I don't think it is a waste of time as long as u take time to understand the concept of trading and subsequently what suits ur psychological make up................u need a lot of self belief cos there is the temptation to want to follow the 'crowd' instead of doing what suits u as an individual or even be intimidated by all sorts of claims and statistics..................put in all the hard work i.e reading up on the subject of trading and paper trading then decide if it is really 4 u (be true to urself about it!).

 

[PeterTT]

I could have a futures account but prefer spreadbetting mainly due to the tax advantage (no 40% capital gains tax on wins). I am not a day trader as I tend to hold positions for more than a week or so. I imagine that the spreads would be too large for me to daytrade as the moves are not usually large enough.

Peter

 

[cragzy]

thank you everybody some very infomitive replys, i will tread very carfuly and learn over time with minimal risk to perfect my system you have been very helpful