My spreadbetting adventure
 

So, I'm looking for a new junkie form of gambling, this seems perfect.

I'm not sure how much to deposit, but I think the general plan is to long/short any stocks I here are good to long/short. I will be going mainly/purely on tips and speculation.

I will aim to hold positions until I am told I should end the position.

I know this may be mad idea, however to start with I'm only going to deposit $2K.

I'm going to go long on different holdings to start with. They can be anything. From the post on favourite stock picks I will be basing my decisions.

I will be using stop losses on all the positions so that I cannot lose more than $100 per each of the holdings.

I will be using a 20% stop loss and will be leveraging at 5 times. So I am effectively buying a stock for $100, but if it goes down by 20% then I am a gonna, if it goes up by 20% then I double up.

I've always been interested in this and I think it will help me learn. If I lose the $2K, it is no bother. Money is money, and $2K, whilst enough that I will try hard not to lose it (in fact to make money from it) is enough that I won't cry if I lose it.

The long positions:

SKYW
LOW
MYL
ATW
HERO
TIE
yahoo
SBUX
WFMI
GULF ETHANOL
PACIFIC ETHANOL
POKERTEC
ADY
COP
BBBB
JNJ
edit: gold and sugar futures

I haven't included BDAY, CRY or UA as not sure if they are serious or comedy posts.

I've now got to work out how to make these bets.

Re: My spreadbetting adventure
 

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So, I'm looking for a new junkie form of gambling, this seems perfect.....I will be going mainly/purely on tips and speculation.


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Mayeb x-post this to BBV?

Who are providing these tips? I hope you know you'd be better off with a dart-board. Dart boards are also cheaper than tipsters.

I think this will be an interesting thread. i suggest you use it as a trading journal.

Which broker are you using? I hope it's not Finspreads or Deal4Free.

You have a stake of 2K, yet you're risking $100 on each trade? I think 5% risk is way too high, coupled with your portfolio heat and I think you'll end up wiped out with an additional debt to your broker. Depending upon which broker you are using, you can make tiny bets such as 50p per point (Finspreads only saving grace is that they allow 1p/point for the 1st 6 weeks).

How about stop losses? Are you placing them at a sensible point in the market and positioning trades based on risk, or are you placing set trade values and placing your SL at a point you can afford?

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I've always been interested in this and I think it will help me learn

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It certainly will. Even if/when you eventually bust-out, it will be an invaluable financial education. Most successful traders have paid a high price for their education.

Re: My spreadbetting adventure
 

I don't really understand what you're learning if you're basing all your bets off of tips?

Re: My spreadbetting adventure
 

john i would recommend reading reminiscences of a stock operator

Re: My spreadbetting adventure
 

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I don't really understand what you're learning if you're basing all your bets off of tips?

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You'll eventually learn not to use them and do your own dd

Re: My spreadbetting adventure
 

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I don't really understand what you're learning if you're basing all your bets off of tips?

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You'll eventually learn not to use them and do your own dd

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This makes no sense at all. If you want to learn how to do research for potential investments, then do it. In no way does blindly following tips prepare you for later doing your own research.

Re: My spreadbetting adventure
 

[ QUOTE ]
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I don't really understand what you're learning if you're basing all your bets off of tips?

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You'll eventually learn not to use them and do your own dd

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This makes no sense at all. If you want to learn how to do research for potential investments, then do it. In no way does blindly following tips prepare you for later doing your own research.

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I doesn't make sense, but it is a pretty standard path on the road to being successful. It would make more sense to skip the 'don't follow tips' lesson, but this is how most people start off. It is often one of the first lessons learned in a very expensive education.

Many famous traders started following tips before they started working on their own rational strategies. A more sensible approach would be to paper trade tips and not kick yourself when they turn a paper profit.

It's a psychological game, and following tips is psychologically comforting for a beginner trader/investor.

Re: My spreadbetting adventure
 

thanks for all the replies. I fail to see why following tips fails. You are pooling together the research of a number of people and taking the best result (or two) of their research. why would this not work?

For sure the tip will sometimes end out being wrong, but it doesnt mean it wasn't a +EV tip. If you do not put too much emphasis on a one-off tip (i.e. it is only 5% of your portfolio) then I don't see how it can go wrong long term.

So you do not think the average best share advice of a poster on this forum will outperform the market? Based on keeping each share for a set x length of time and each share is equally weighted. If not, fair enough, but I do, and although it is a very small sample, I think the unofficial portfolio helped (maybe effectively reverse implied odds in poker terms) convince me down the tips path.

Re: My spreadbetting adventure
 

as for the portfolio itself, how should i best hedge against the US market falling. would it be too marginal just to short the SP500? as in is it only worth it for a hedge fund with millions doing this, rather than a guy with $2K.

I'm thinking maybe going for 3 commodity futures, 3 non-market based (long on property fund for example), 4 stocks, 2 US, 2 non-US.

so 30% commodities, 30% others, 40% stocks (ideally the stocks section would comprise of about 20 stocks but due to minimumt trading restrictions 4 is realistic, although if this grows then ill introduce more)

Re: My spreadbetting adventure
 

also when i say 'others' ill probably do 1 currency, an interest rate, and something else