Financial Spread Betting – End of Week 1 – Up 6.6% (£6.59) – UPDATED

So those of you that have been following my twitter account will know that over the past few weeks I’ve been obsessing over teaching myself the ins-and-outs of the stock market.  Overall I’ve found paper trading to be a very enjoyable experience, mainly because of the learning involved, but also as it allows me (with little money) to apply knowledge and skill in a way to quickly make more money, something my entrepeneurial side is particularly attracted to!

So what did I learn after a month of paper trading?  Here’s my summary..

• FOREX markets (particularly GBP/USD or “Cable”) are particularly nasty
• The Capital Spreads platform is nice, but their demo platform doesnt excute orders (such as stoplosses) correctly
• I’m better to trade in just one market – such as the FTSE100
• Always read the chart before making an entry, dont just go with your gut.

So after analysising my wins and losses with capital spreads (which overall was a loss of £3k – but most of that was due to a cable movement without a stop loss, if I took FOREX out I was up £900!), I decided to look at entering the market for real.  After reading Bets and the City: Sally Nicoll’s Spread Betting Diary (which is a great book to start with – but she tends to ramble on about useless junk for half the book), and reading the spread betting dicussions on the trade2win forums I decided to sign up with FinnSpreads, for 3 reasons;

• They let me trade at 10p a point for 8 weeks – which is awesome as it lets me learn at much lower risk
• They’re part of City Index, so once I’ve finished with Finnspreads I can move to the City Index platform and use their iPhone app to trade and monitor positions
• Sally Nicoll said theyre’re ok – and shes a girl so it cant be that hard.

Unfortunately their trading platform, like soo many others, is flash based, and tends to pretty much nuke any computer you run it on.  Plus they trade on non standard points, which if you’re behind a corporate firewall means you’re constantly having to refresh your page to stop the connection dropping to “Poor” (you can still close positions, it just never recieves confirmation from the server).

So here’s what I’ve learnt in a week with Finnspreads;

• Binary bets are awesome as they act as a “multiplier” to current market conditions (ie the FTSE may only move 15points, but you can quite easily make 30-40 points with a binary over the same movement)
• I have to monitor all binary positions minute by minute, as one loss can wipe out a days trading
• That “Wall Street” has up and down cycles that take around 20-25 minutes to complete, which means if you enter an UP binary with 40 minutes to go, dont expect it to be up after 35 minutes!
• Always read the charts – especially when entering binaries!
• Have I meantioned, binary bets are awesome?
• That going “long” on up trending stocks works well – but you need to define your exit point well
• That other currency markets are OK, if you know what you’re doing!
• That the biggest gaines / losses are in the first hour and last hour of trading.

I think thats about it for this week.  As you can see I’m a fan of the binaries, although you have to monitor these carefully as you cannot set stop losses (of course with binaries these are self regulating).

After all that action and 5 days of trading, I’m happy to report I’m a whopping £6.59 up, with open positions in the GBP/EUR, US Crude Oil, BA. M&S and BT.  All going nicely (even if their platform did stop me trading before it should have!).

Now onto next week! Wish me luck!

UPDATED: I’ve been informed (by a reliable source) that IG Index also offers a two week 10p per point trading period.  Seeing as their platform is vastly better than many of the others I’ve seen, AND they do a mobile version for iPhones, I will most certainly be trying this in the coming weeks! – Thanks Adam!

Tags: BA, BT.A, captial-spreads, financial-spread-betting, finspreads, FTSE, GBPEUR, ig index, ig index iphone, igindex, M&S, Oil, spread-betting, stocks
Posted in Stocks-And-Shares