I came to spread betting with no previous experience in June 2007. My background is in IT and Business. I trade as a hobby and I don’t stare at charts all day. I enjoy trading and the analysis. And yes, spread betting is gambling no matter what they say otherwise, but I am very strict with my leverage and keep my stake low.
So how did I get started spread betting?
I stumbled into spread betting purely by chance. I came to spread betting with no previous experience in June 2007, at near about the height of the FTSE – 6700. It all seemed unreal then with the FTSE and the Dow making record highs most days and I thought – this cannot continue indefinitely. When such news items appear on the mainstream media it normally means whatever they are talking about is about to reverse. Having traded in shares, I thought there must be a way to benefit from my hunch. Not knowing anything about spread betting I clicked on an advert on the III website and became quickly intrigued. I ‘fell’ into spread betting, and started to read all about it online. I bought books and I opened accounts. I read blogs and forums and half the time i didn’t understand what the hell was going on. On the forums everyone seems to make money.
From there I set up an account with Finspreads (as you could trade for 50p a point with them) and bought a few books. I tried a demo account with WorldSpreads, which was fine – I made some “money” but it just didn’t feel like I was learning anything. It seemed just like gambling – $100 a point DOW to go up, oh, I’m down $2000, never mind it isn’t real. With the thought of “only gamble what you can afford to lose” I put £200 in my Finspreads account and I was off. 2 weeks later I had lost my £200. But some of those days I made £20, sometimes £50. Another day I’d lose £90. Hummm, this is harder than it sounds. If I copied trades that others did on forums I always seemed to get stopped out. I soon learned that a lot of what is posted is rubbish!
True to what I thought at the outset 6700 was indeed the peak on the FTSE but I wasn’t making any money from my hunch. I was gambling, and if I got it right I loved it, if I lost I was like “ah that’s ok its only £30 I’ll make that back on the next trade”. But the losses added up and blew my account. I wasn’t even looking at charts at that point – just trying to guess “up or down”. I was crazy and out of control!
I stepped back and decided that I should really read the books that I bought before I start again. I read “The Naked Trader” as my first book. Then “The Spread Betting Handbook”, then a couple of others which were sooo boring. July 2007 I put another £200 in my account and thought this is it – I know what I am doing now. A week later I’d lost my £200. Hummm, this is definitely harder than it sounds!
Ok, just £100 in the account this time and then that’s it, I don’t want to lose more than £500. We then had the credit crunch and huge volatility – some days with just a 50p bet I’d make £100. My account grew. I was holding onto the winners and my account grew to £500. This is it I have got it now. Little did I realise that these were unique times – and for the DOW and FTSE to just go screaming off 100, 200, and 300+ points in one direction was not a common thing. I set OCO orders and when they caught the winnings mounted. Then it settled down and I ended up losing my winnings by trying to trade every move. I was overtrading.
In those few months I learned a lot about myself and the emotions that run through you as you trade. But I was hooked. I had visions of trading from the beach at £100 a point. Maybe one day, but back in the real world I have cut down the amount I trade, I base my trades on chart analysis, support, resistance and trends.
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