Spread betting - thoughts?

Fred Cryton

So since the lockdown began in March i decided to try my hand at a spread betting account - a demo virtual one mind you.



Thing is, i seem to be quite good at it. I have a model for predicting the movement of oil at 8am each morning based on overnight trading and previous days performance. I make a single trade each morning with a stop loss set around 5% of capital, and the model works around 75% of the time. Over the past month for example i made €9,500 in "virtual" profits at 10 per point.



Am i missing something? It can't be this easy to make huge profits. Anyone with experience would appreciate your thoughts before diving into it with real money.

Pinsnbushings

I wish I'd been as sensible as you, I've managed to lose pretty much exactly the figure you've won in the same time frame in a live account.. I hadn't a clue what I was at made every error you could think of.
I've no doubt if you are clever about it manage your risk, have sensible stops aren't over trading and have a system that is working it could be very profitable.

SteelyDanJalapeno

Pinsnbushings wrote: »

I wish I'd been as sensible as you, I've managed to lose pretty much exactly the figure you've won in the same time frame in a live account.. I hadn't a clue what I was at made every error you could think of.
I've no doubt if you are clever about it manage your risk, have sensible stops aren't over trading and have a system that is working it could be very profitable.

Very humble to admit your loses, not many on boards do.
In the grand schemes of thing its not a big deal, but it might be a sign to close this chapter and move on, maybe Investing is not for you

daheff

If you have a model that works, then go ahead...just start slow. I have a suspicion that the demo systems work a little different to the live system and is easier to profit from.

Pinsnbushings

SteelyDanJalapeno wrote: »

Very humble to admit your loses, not many on boards do.
In the grand schemes of thing its not a big deal, but it might be a sign to close this chapter and move on, maybe Investing is not for you

Yes I mentioned it on here a few weeks back and was given good advice to take what was left of my account out, which thankfully I've followed. Going back to basics stick to what I know and maybe revisit investing on a much smaller scale for the time being. I have a smaller amount of money in a degiro account which is in cash at the moment and I will keep it that way until I've done my research much more diligently..
Like you say not going to be the end of the world for me in the grand scheme of things but a steep learning curve and there are cheaper ways of learning.
If you have any gambling weaknesses steer well clear.

Timmaay

Fred Cryton wrote: »

So since the lockdown began in March i decided to try my hand at a spread betting account - a demo virtual one mind you.



Thing is, i seem to be quite good at it. I have a model for predicting the movement of oil at 8am each morning based on overnight trading and previous days performance. I make a single trade each morning with a stop loss set around 5% of capital, and the model works around 75% of the time. Over the past month for example i made €9,500 in "virtual" profits at 10 per point.



Am i missing something? It can't be this easy to make huge profits. Anyone with experience would appreciate your thoughts before diving into it with real money.

You've paper traded a very small window through one of the most volatile periods of oil price history, you definitely should back test a much longer period of time 1stly. And if you still want to proceed make sure you start with a very small amount of money, and build up slowly if by some miracle you've stumbled upon some sort of holy grail. And 5% SL on each trade is too much, let's say you have 8 losses in a row (very possible across time), that's straight up a 40% drawdown, mentally very hard to recover from the likes of that ha.

dartboardio

So far so good but you should practice on demo for more.

10 per point amounts to 1.00 lot size on average, so i think you'd generally be recommended to have 10k in your account to comfortably place 1.00 lot sizes or as you say 10 euro per point/pip.

you should try with lower risk and see how much you make, you may not find it as crazy then.

How much would you be thinking of investing in real money?

I know the MT4 Demo account moves faster and has different prices by about 20/30 pips so I dunno how that affects you.

What kind of strategy have you developed?

I try to focus mainly on price action and support and resistance areas, i find the difficult part is my emotions. hah!

Actually what I would say is , its easy to make money on the demo account because no emotions are involved. You don't care if you leave a position run for 8 hrs and it's in €1000 minus, and later its in profit.

If you're starting out you may not be as patient or level headed when using real money, people freak out and close positions early etc, enter at the wrong time and get stopped out..etc

I have started trading a few months ago, and gone back to using demo for now as need to 'master the psychology' , made 4k on the demo in the last 2 weeks with the same strategy i use on real. why? because nothing can prepare you for when you're doing it with real money, you have a total different set of emotions for sure.

One More Toy

Stay away from it trust me, look at the disclosures of people who lose money investing in cfds/spread betting

elgriff

https://www.ig.com/ie/ways-to-trade/spread-betting

I would tread very very carefully personally. Look at the typical disclaimers.


Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Options are complex financial instruments and your capital is at risk. Losses may be extremely rapid.

Professional clients can lose more than they deposit.

FinTrade

Trading demo and real are two different things.

There are many cases where people do well on demo but fail miserably with real money.