Spread betting
- Thread starter BarryMorgan_Gutters
- Start date
M
MBE1
Tried it for a short time, only for a bit of fun with money that can be lost.
The hardest thing IMO is learning to detatch yourself from the bet, the loss rate can be very high since so many decisions are emotionally made, take your time, only bet when your own rules are met on a bet, never bet too much at once, always set stop losses, and realise another opportunity will come along within a week or two.
I have seen many fall into the trap of chasing their losses that night etc, only to make silly mistakes, it is a human trait, you have to train yourself to ignore these basic programmes you have learnt through your life, and retrain to not worry about losing a bet, it is something THAT WILL ALWAYS HAPPEN, as well as the occassional win.
I might give it another go myself in the future, I am still to emotive at the moment, so will continue to fail until I learn to control myself more.
The hardest thing IMO is learning to detatch yourself from the bet, the loss rate can be very high since so many decisions are emotionally made, take your time, only bet when your own rules are met on a bet, never bet too much at once, always set stop losses, and realise another opportunity will come along within a week or two.
I have seen many fall into the trap of chasing their losses that night etc, only to make silly mistakes, it is a human trait, you have to train yourself to ignore these basic programmes you have learnt through your life, and retrain to not worry about losing a bet, it is something THAT WILL ALWAYS HAPPEN, as well as the occassional win.
I might give it another go myself in the future, I am still to emotive at the moment, so will continue to fail until I learn to control myself more.
Upvote
0
Yep as MBE says you cannot emotionally trade. Best way is to have/find a system which identifies trades based on a set of specific criteria and only enter trades where those conditions are met.
Most common mistake newbies make is getting involved in too many trades (just look rookie poker players play too many hands).
In terms of platforms depends what instruments you want to trade; equities (shares) or FX.
Theres
IG index
city index
cmc markets
fxcm
saxo capital
Too many people are lured by the promise of easy money. Did you see the program on BBC2 the other week; Traders: millions by the minute? Second part focused on those trading from home trying to make money. The reality? 90% will lose and if you are in the 10% then you are basically sat in front of a computer screen for 8/9 hours a day at home on your own. Not exactly fulfilling as a daily existence is it?
Gary
Most common mistake newbies make is getting involved in too many trades (just look rookie poker players play too many hands).
In terms of platforms depends what instruments you want to trade; equities (shares) or FX.
Theres
IG index
city index
cmc markets
fxcm
saxo capital
Too many people are lured by the promise of easy money. Did you see the program on BBC2 the other week; Traders: millions by the minute? Second part focused on those trading from home trying to make money. The reality? 90% will lose and if you are in the 10% then you are basically sat in front of a computer screen for 8/9 hours a day at home on your own. Not exactly fulfilling as a daily existence is it?
Gary
Upvote
0
- Original Poster
- #4
Thank you for the comments and advice. I have opened an account with the look to trade fx only.
I will tell you how it goes.
I traded on the test non-live account and made £4000+ in 24 hrs. I stupidly thought I would be able to do the same on a live account. Different feeling when it is your money on the line.
I will tell you how it goes.
I traded on the test non-live account and made £4000+ in 24 hrs. I stupidly thought I would be able to do the same on a live account. Different feeling when it is your money on the line.
Upvote
0
Just be careful, it sounds like you might be gambling it.
Successful people who spread bet have certain strategies in place that they strictly abide by. If they don't have a strategy that has been tested on past results then they essentially are just gambling.
There is a big difference between outright gambling and betting using strategies.
For instance, let's say you bet on the pound going up against the dollar at £1 per point / tick, have you come up with a plan of when to stop the bet if you are in profit? Have you come up with a plan of when to stop the bet if you are losing? If you don't have a plan at the outset then you are definately gambling and that's not a route you want to go down, you could become addicted to the rush and before you know it you have lost everything including the shirt off your back.
This is why MBE1 has stopped because he can't separate the gambling feeling out of it (the rush and the fall). If you have a true strategy that you know is highly likely to succeed then you shouldn't get that feeling.
Chris.
Successful people who spread bet have certain strategies in place that they strictly abide by. If they don't have a strategy that has been tested on past results then they essentially are just gambling.
There is a big difference between outright gambling and betting using strategies.
For instance, let's say you bet on the pound going up against the dollar at £1 per point / tick, have you come up with a plan of when to stop the bet if you are in profit? Have you come up with a plan of when to stop the bet if you are losing? If you don't have a plan at the outset then you are definately gambling and that's not a route you want to go down, you could become addicted to the rush and before you know it you have lost everything including the shirt off your back.
This is why MBE1 has stopped because he can't separate the gambling feeling out of it (the rush and the fall). If you have a true strategy that you know is highly likely to succeed then you shouldn't get that feeling.
Chris.
Upvote
0
M
MBE1
I stopped mainly because I realised that although I was not betting in a gambling sense, I was also not fully sticking to a system, and until I have found my system/rules and am happy I can stick to it no matter what, then IMO 98% of people will lose money. Fortunately I do not suffer the gamblers rush etc and was more concerned at how easy it is to lose money hard won.
I have been to busy to sit down and do enough research etc so simply decided to stop for the time being. The term spread betting seems innocent enough, but I really can see the possibility of huge losses for anyone not giving things enough thought.
By all means practice with a dummy account, but real money as already mentioned changes all an account holders decisions compared to fake money. Only using your own money brings any reality to the whole risk.
I have talked to several people on the web who claim to make good regular money from spread betting, but am yet to meet anyone in person who actually does.
I have been to busy to sit down and do enough research etc so simply decided to stop for the time being. The term spread betting seems innocent enough, but I really can see the possibility of huge losses for anyone not giving things enough thought.
By all means practice with a dummy account, but real money as already mentioned changes all an account holders decisions compared to fake money. Only using your own money brings any reality to the whole risk.
I have talked to several people on the web who claim to make good regular money from spread betting, but am yet to meet anyone in person who actually does.
Upvote
0
I use spread bets quite often to take positions in companies.
The truth is that it's basically share dealing with borrowed money - or a leveraged buy.
£1 a point is equal to 100 shares. You just pay a small deposit for them 'shares' and the spread company lends you the money for the rest - not litterally but that is how you should think of it. So you can get into a 100 share lot for a few quid and and maybe a few quid is spread fees (equivalent dealing and execution charge in shares would be roughly £10 to buy and £10 to sell) that's a 20 point move before you're in profit Vs a one or two point move on the spread bet.
Give me a dummy account and I could double it in a few hours going long/short on the FSTE100 by flipping a coin and using the martingale system. I could also loose it all in pretty short order too.
Success comes down to discipline and expectations. The best investors in the world compound gains at around 20% over long periods of time. 20% a year on a £1000 account isn't exciting but ultimately not all that difficult to achieve with careful use of leverage. £1000 a year compounded at 20% a year with a £1000 added to the investment pot every year over 20 years is a much more interesting prospect long term - £1/4 million for a £20K investment is interesting. The problem is that it takes a certain kind of person to have the discipline to trade like this over an extended period. Most want big gains on small trading pots very quickly.
Guessing the market moves is the easy bit - allocating capital to trades, managing the capital and sticking to the plan is the hard part.
Money management is the starting point. My rule of thumb is a £1000 account should be trading no more that £1 a point £10,000 for £10 a point etc etc. Never risk more than 2% of the pot on one trade and never be exposed to more that 6% of your pot in potential losses. And keep a detailed record of every trade - include charts, entry points, exit points and reasons for the trade. All good traders do this.
If it's exciting you're doing it wrong.
The truth is that it's basically share dealing with borrowed money - or a leveraged buy.
£1 a point is equal to 100 shares. You just pay a small deposit for them 'shares' and the spread company lends you the money for the rest - not litterally but that is how you should think of it. So you can get into a 100 share lot for a few quid and and maybe a few quid is spread fees (equivalent dealing and execution charge in shares would be roughly £10 to buy and £10 to sell) that's a 20 point move before you're in profit Vs a one or two point move on the spread bet.
Give me a dummy account and I could double it in a few hours going long/short on the FSTE100 by flipping a coin and using the martingale system. I could also loose it all in pretty short order too.
Success comes down to discipline and expectations. The best investors in the world compound gains at around 20% over long periods of time. 20% a year on a £1000 account isn't exciting but ultimately not all that difficult to achieve with careful use of leverage. £1000 a year compounded at 20% a year with a £1000 added to the investment pot every year over 20 years is a much more interesting prospect long term - £1/4 million for a £20K investment is interesting. The problem is that it takes a certain kind of person to have the discipline to trade like this over an extended period. Most want big gains on small trading pots very quickly.
Guessing the market moves is the easy bit - allocating capital to trades, managing the capital and sticking to the plan is the hard part.
Money management is the starting point. My rule of thumb is a £1000 account should be trading no more that £1 a point £10,000 for £10 a point etc etc. Never risk more than 2% of the pot on one trade and never be exposed to more that 6% of your pot in potential losses. And keep a detailed record of every trade - include charts, entry points, exit points and reasons for the trade. All good traders do this.
If it's exciting you're doing it wrong.
Upvote
0
I have done it for ages as I was a broker years ago. It is like having a portfolio that cannot take a 10% hit. You make loads of small gains for weeks and then bang you are dead. 10% losses are normally on a 1% market move. Don't think guaranteed stop losses help. You can have any good idea hit the ropes because of a bad day in the market dropping the share prices everywhere and hitting the stop loss.
say you have £10k on 10 stocks
share price on one is £100. You spread bet and because of the margins needed you put a stop loss in at £95 to save losing the whole thousand you have on that share.
the markets have a bad day or they just don't like oil or the euro or whatever that morning the price drops to £95 before the strategy kicks in and it goes up. You have lost most of your £1000 already.
It is abit of a fun punt but leave it well alone with serious cash.
say you have £10k on 10 stocks
share price on one is £100. You spread bet and because of the margins needed you put a stop loss in at £95 to save losing the whole thousand you have on that share.
the markets have a bad day or they just don't like oil or the euro or whatever that morning the price drops to £95 before the strategy kicks in and it goes up. You have lost most of your £1000 already.
It is abit of a fun punt but leave it well alone with serious cash.
Upvote
0
The main thing I have found with spread betting is you have to have some spare money around to top up your account if you get it wrong and need to bet the other way/bet the same way but for a larger number of points to cover your unrealised losses. It's a good idea to understand the margin, i.e. exactly how it is calculated and how much of your account funds the spread betting company is going to tie up to cover your trade.
Say you bet on the share/currency/commodity to go down and you get it wrong. So you wait until you think it's got to the top of the market for the day and try to put in a second bet, at a higher number of points but still going the way you think the market will go, enabling you to close out both trades, hopefully at a profit, somewhere in between the two on the way back down. If you don't have enough funds in your account, to cover the margin on the existing bet plus the margin on the new bet, the spread betting company can just refuse your trade.
I would recommend having a maximum points bet of half a percent of your pot. So if £20k funds, bet no more than £100 a point, £200 in funds, no more than £1 a point. That way, if the market does go in the opposite direction and you need to bet opposite to your losing bet (i.e. arbitrage), or the same direction as your losing bet but at a higher point on the up tick, you don't find your bet is being refused.
Say you bet on the share/currency/commodity to go down and you get it wrong. So you wait until you think it's got to the top of the market for the day and try to put in a second bet, at a higher number of points but still going the way you think the market will go, enabling you to close out both trades, hopefully at a profit, somewhere in between the two on the way back down. If you don't have enough funds in your account, to cover the margin on the existing bet plus the margin on the new bet, the spread betting company can just refuse your trade.
I would recommend having a maximum points bet of half a percent of your pot. So if £20k funds, bet no more than £100 a point, £200 in funds, no more than £1 a point. That way, if the market does go in the opposite direction and you need to bet opposite to your losing bet (i.e. arbitrage), or the same direction as your losing bet but at a higher point on the up tick, you don't find your bet is being refused.
Upvote
0
Yep. I did them at the same time as I did spread betting (the company I was with offered both on the same platform). I made money doing both but I made more money off binary bets which I found easier to trade. They seem to have tightened up the binary bets system since I last did so my strategy doesn't seem to work any more.
I'm going to get back into share dealing but this time I'm staying well away from spread betting / binary bets. I'm going to do it the traditional way and actually buy the shares this time.
Upvote
0
T
The Byre
I want to get rich without working and I don't want to learn any new skills and I don't want to think about it too hard.
Oh, yes! And it has to be risk free of course!
I hear that spread betting is now being taught at the Wysuckie College for the Totally Dumb, is this the right course for me - or should I stick to my original plan to become a pop star?
Oh, yes! And it has to be risk free of course!
I hear that spread betting is now being taught at the Wysuckie College for the Totally Dumb, is this the right course for me - or should I stick to my original plan to become a pop star?
Upvote
0
I did this about 8 years ago.... it wasn't my finest moment to be shorting the Dow & rolling over every day for one of the the Dow's longest ever run of consecutive UP days ...I lost over £6,000, then I lost my bottle so I stacked my hand only to watch the Dow begin its tank two weeks later (which stung way more than the £6k loss). I knew the market was in trouble but when the US market is in full on bull phase, stand well back. As the saying goes..."the market can stay irrational far longer than you can stay solvent".
Upvote
0
The problem with spread betting is that you don't actually own anything and the bets have expiry dates. However with shares you actually do have something so it's better to buy and sell shares than it is to spread bet.
Buying and selling shares is more about having a good all-round business sense and have a good prediction of what's likely to happen in the furture. Just like you might see an old car for sale and you might think 'that's going to go up in value in a few years time' well buying shares is very similar, yes you can't guarantee that they will go up but if you know a thing or two about business and can study the wider markets then you have got a good chance of spotting a good buy and stand a good chance of making money.
Spread betting is about odds and probability and coming up with a strategy using odds and probability based on statistics. You can't use the above share buying method as the bets have an expiry date so you are time limited. Shares don't have the time limitation.
Trying to predict share prices short term is near on impossible so using business sense with spread betting just won't work. Trying to predict long term is perfectly possible but it is a lot of work combined with a very strong wide market business sense.
Chris.
Buying and selling shares is more about having a good all-round business sense and have a good prediction of what's likely to happen in the furture. Just like you might see an old car for sale and you might think 'that's going to go up in value in a few years time' well buying shares is very similar, yes you can't guarantee that they will go up but if you know a thing or two about business and can study the wider markets then you have got a good chance of spotting a good buy and stand a good chance of making money.
Spread betting is about odds and probability and coming up with a strategy using odds and probability based on statistics. You can't use the above share buying method as the bets have an expiry date so you are time limited. Shares don't have the time limitation.
Trying to predict share prices short term is near on impossible so using business sense with spread betting just won't work. Trying to predict long term is perfectly possible but it is a lot of work combined with a very strong wide market business sense.
Chris.
Upvote
0
Hi
I have spread traded shares and commodities for over 20 years. I do it alongside trading options. I spent the first year not trading but learning and that has been the key to my success. I understand from the LSE 95% of all newcomers who trade lose their initial stake. I will not give tips on trading except to say if you need to earn a living from trading shares of any sort don't do it. The emotional pressure will guarantee failure
Mike
I have spread traded shares and commodities for over 20 years. I do it alongside trading options. I spent the first year not trading but learning and that has been the key to my success. I understand from the LSE 95% of all newcomers who trade lose their initial stake. I will not give tips on trading except to say if you need to earn a living from trading shares of any sort don't do it. The emotional pressure will guarantee failure
Mike
Upvote
0
Latest Articles
-
The Most Dangerous Moment in Business Is When Everything Is Going WellThey Saw It Coming. They Did Nothing. The Lessons Every Business Owner...- Ozzy
- Updated:
-
AI and Your Business: Useful Tool, Not a Magic WandThere is no shortage of noise around artificial intelligence right now...
- Ozzy
- Updated:
-
Companies House WebFiling security incident: what happened, what to check, and what to do nextCompanies House has confirmed that its WebFiling service suffered a...
- Ozzy
- Updated:
-
Spring Budget 2026: A Quiet Update for UK BusinessesChancellor Rachel Reeves delivered the UK’s Spring Statement on 3 March...
- Ozzy
- Updated:
-
Practical Ways to Make Your Small Business More Resilient (Especially When the Unexpected Happens)Running a business means juggling plenty of things you can plan for and...- UKBF Editor
- Updated:
