Reply to: The Naked Trader

[2BIT]

I assume you mean this:

Overround Thread - Does Not Work!!! Ignore - MoneySavingExpert.com Forums

oh nice one mate was searching for 'betfair' and few other terms - there was a good follow up thread to it as well but it gives me a good starting point

I made a mistake recently when wanting to looking into exchange markets just to learn about them and see if it was something I'd enjoy doing but used barclays and they don't have a demo version - bill came through recently that I'm being charged £12 for a £9 trade, that will teach me to not read things properly but its all a learning experience

the only time I ever made money from gambling was through playing perfect hand black jack but its not really the same thing

[Freamon]

damn can't find the link, was a good read - loads of peeps starting making large bets and then someone comes in and tells them they are all much more exposed than they think they are and well it's quite entertaining!

good example of someone betting on something they don't understand and getting burned!

I assume you mean this:

Overround Thread - Does Not Work!!! Ignore - MoneySavingExpert.com Forums

[2BIT]

that's the dangerous part, knowing about it- there was this post on martins money tips where loads of peeps started doing it but it was clear the didn't know what they were doing and some lost loads - trying to find it now, got the link from here actually

damn can't find the link, was a good read - loads of peeps starting making large bets and then someone comes in and tells them they are all much more exposed than they think they are and well it's quite entertaining!

good example of someone betting on something they don't understand and getting burned!

[2BIT]

As mentioned before I just want to read up on it as I know **** all about it. I'm looking for recommendations on which books to read and which demo SB sites to play with.

that's the dangerous part, knowing about it- there was this post on martins money tips where loads of peeps started doing it but it was clear the didn't know what they were doing and some lost loads - trying to find it now, got the link from here actually

[SimonMac]

As the Japanses Nikkei is tanking I wonder if it would be worth while sticking a few grand in shares of some of the big compaines that have taken a hit and wait for the market to normalise again

[xchaotic]

OK, just wondering.... as opposed to Spread Betting, I wonder if well researched share dealing is still NOT a gamble?
I think it still is very much a gamble, and Spread betting only amplifies that, but is not something opposite.
Even 'safe' investing in sth like bonds or gold, when the market is booming is simply losing money isn't it?
So in a way when you start thinking about your assets as investments and the return they make, not investing is also one of the strategies, usually the least profitable one, isn't it?
Looking at it from such a perspective, I dare say spread betting can be useful addition to the portfolio if you're not spending too much time and money on it.

[Churchill]

If you're going to trade, you will lose money especially in the beginning it's all part of it.

My advice is forget day trading just punt normally on the stock exchange, buy and selling shares.

I invested some money about 10 years ago and within 12 months I'd lost 50%, but I just kept the portfolio and after about 7 years I looked my portfolio was double my original investment. I then put really serious money on the stock market, but I'd learnt my lesson I held back sufficient capital for a crash. My self-invented rule of thumb is to hold back enough cash to double the investment if it halves in value. When the crash came, and I was down by 50% for the second time, I piled in again. Only a few months after the crash the portfolio was back to breakeven thx to the stocks I bought after the crash. I've now got serious profits.

The key is timing, the safest way is to invest regularly over time less during a Bull and more when everyone's depressed. The way I see it you get on average about 10% return. That's my experience anyway.

Also buy dividend stocks, nothing like cash flowing into your account. Telecoms pay high dividend.

Some of my stocks are almost worthless, others are up several hundred percent. That's the good thing you can only lose 100% of one stock, but you can gain several hundred percent in another stock.

Good investments are instinctively hard, because the stocks are down and no-one wants them. Bad investments are easy, just follow the herd and look at the stunning stock history. That's why most lose.

If you are going to do OK out of this you need strong nerves.

As mentioned before I just want to read up on it as I know **** all about it. I'm looking for recommendations on which books to read and which demo SB sites to play with.

[Churchill]

FFS was it you I met a week or so ago in my local pub, boring the arse of anyone who would listen about how much money he _could_ have made last week if his trading-training accounts were live, and how easy it is to make BIG money?

We're all waiting for him to "go live" and lose a freakin' fortune. Trouble is, it's his (besotted) missus's money, not his.

Obviously it wasn't.

Thanks though!

[Peoplesoft bloke]

Er at the risk of getting flamed - The Naked Trader has an excellent explanation of Spread Betting and why writing books about it or being the "bookie" is preferable. After reading the book and the horror stories of a pal of mine I decided not to bother.

[BlasterBates]

If you're going to trade, you will lose money especially in the beginning it's all part of it.

My advice is forget day trading just punt normally on the stock exchange, buy and selling shares.

I invested some money about 10 years ago and within 12 months I'd lost 50%, but I just kept the portfolio and after about 7 years I looked my portfolio was double my original investment. I then put really serious money on the stock market, but I'd learnt my lesson I held back sufficient capital for a crash. My self-invented rule of thumb is to hold back enough cash to double the investment if it halves in value. When the crash came, and I was down by 50% for the second time, I piled in again. Only a few months after the crash the portfolio was back to breakeven thx to the stocks I bought after the crash. I've now got serious profits.

The key is timing, the safest way is to invest regularly over time less during a Bull and more when everyone's depressed. The way I see it you get on average about 10% return. That's my experience anyway.

Also buy dividend stocks, nothing like cash flowing into your account. Telecoms pay high dividend.

Some of my stocks are almost worthless, others are up several hundred percent. That's the good thing you can only lose 100% of one stock, but you can gain several hundred percent in another stock.

Good investments are instinctively hard, because the stocks are down and no-one wants them. Bad investments are easy, just follow the herd and look at the stunning stock history. That's why most lose.

If you are going to do OK out of this you need strong nerves.

[Jog On]

Another thing that results in people losing all their money very quickly is that they tend to assume that the only way to trade is day trading short timeframes.

The shorter the timeframe the less reliable the signal and the more difficult it is to trade. But new people jump straight in to 1 min/5 min/15 min charts and try and chase the direction that price is going in.

It's a good diea to see if you can make a profit (on demo first) using the daily timeframes, then move down to the 4 hour, then 1 hour then 15 min if you have to 'day trade'. Personally I don't like trading anything lower than the daily time frame (1 candle/bar = 24 hours). Mainly because I work during the day and can't sit and watch the charts - but also because shorter timeframes are more stressful, unreliable and involve more screen time.

That's not what I want from this venture. 3-4 high probability trades a month for a 4-5% gain each month on a 6 figure account is my short term aim. I'm learning about longer term trend following styles as well now where positions are held for weeks/months/best part of a year for potentially huge returns. Need a large account and a lot of patience for that though.

[Platypus]

Ok folks I've bought...

"How anyone can make money trading shares"
"The Naked Trader's guide to Spread Betting"

And I fully intend to read them.

What next?

FFS was it you I met a week or so ago in my local pub, boring the arse of anyone who would listen about how much money he _could_ have made last week if his trading-training accounts were live, and how easy it is to make BIG money?

We're all waiting for him to "go live" and lose a freakin' fortune. Trouble is, it's his (besotted) missus's money, not his.

[IR35 Avoider]

Here is a link to an earlier thread on this subject, which might contain useful replies.

http://forums.contractoruk.com/accou...company-2.html

The following is an extract from one of my posts in that thread:-

When you join IG Index, they tell you they don't care if you win or lose, because they hedge their trades in the underlying market. However, when they went public, their prospectus said that they try as far as possible, within the constraints of their capital and prudence, not to hedge their customers trades. This is because they know their customers will nearly always end up losing money, so by taking the other side of whatever the customers do, they will make money. If the previous sentence doesn't scare the sh*t out of you, read it again until the full implications have sunk in. If it still doesn't scare you, find out what the Efficient Markets Hypothesis is, and read "Market Wizards" and "New Market Wizards" by Jack Schwager, which contain a series of interviews with famous traders. Once you've done that, and hopefully gained an appreciation of how difficult trading is, re-read the aforementioned sentence until you no longer feel like trading.

The following blog says what I've already said, at greater length.

Brain drain: The most profound investment strategy of all time?

In "Market Speculating", a book sent to me free by IG Index, the author says that the reason betting winnings are tax-free is because people collectively lose money doing it. If winnings were taxable, losses would be tax-deductible, so it's in the governments interest for winnings to be tax-free.

Some quotes from the Blog, for those with short attention spans.

These star traders seemed to regard the market as a malignant metaphysical entity, an enemy trying to catch them out. One described the markets as a machine that held up a mirror to each trader, detecting whatever particular flaw existed in his character or personality, and using it to destroy him.

A quote along these lines is to be found in an amusing book, "A Fool and His Money." In it, a commodity trader is quoted telling the author, "When I first came down here I was Mr Big Ego. I had a law degree and here were all these ex-cops and truck drivers and people with 200-word vocabularies trading in the pits. I figured I'd make a killing, right? With this competition, how could you lose? Then I get the sh*t kicked out of me. Then I get the sh*t kicked out of me again. You know what I learned down here? Humility. Discipline. You come into this business with any sense of superiority, and you're dead. Sooner or later you find out who you are. That's what this game is about, finding out who you are. People say the market's this or the market's that, and they begin to think they can understand it. They discover they're wrong. They can't understand it. The market is ... the market is God."

In the same book, an expert estimates that 85% to 95% of people who invest in futures and options end up losing money.

[2BIT]

by the way I tried it using Betfair/Horse racing when the craze first kicked off- completely understood the theory and even wrote a little app to help calculate how much I need to bet or lay on any one side of a bet - made almost no money though as I knew nothing about horses at all, similar thing when I used to bet on football - used to do perms on lower div teams but never made any money cos I didn't know enough about the teams

therefore learning your market is more important than anything else i think

[Jog On]

Spread betting is extremely high risk. The rewards can be great or you can lose you entire shirt. Betting on something like the movement of FTSE at a £100 per point could soon rack up into massive win/losses. It seems like a small point bet, but have a market collapse by 300 points and you're £30k down.

This is why retail trading has a 95% failure rate - regardless of people having systems that work..

To risk £30k (if you're even losing a stop loss) you would need an account size of £1,500,000 for that to be a 2% loss.

Any form of trading is risky. How much you choose to risk is up to you. Even if you are right more often than you are wrong and make more than you lose - if you put yourself in the position where you can get wiped out in 1 trade then you really shouldn't be doing it.

But loads of people do just this and that is why you see all these brokers offering account opening bonuses and effectively paying people to open accounts and start trading.. They must be very sure they'll make it back and then some