"You want to get into financial spread betting?" (Part I)

Part I

I’ve been involved in the financial markets (off and on) for over 20 years as a private investor. Over this period of time I’ve had some successes and off course failures. Everyone has failures and I’m no exception to this rule.

Over the years I have traded (with my own hard earned cash) many different markets. These have included:-
Stocks and Shares on the UK markets (including investment trusts and unit trusts)
Futures (on the UK and US exchanges)
Commodities (on the US exchanges)
Options (UK and US exchanges)
Spread betting
Warrants, CFD’s, Listed Securities
Horses (I’m joking!!)

To a lot of people, this may be hairy stuff. Commodities? You'll loose your shirt I hear you say. And I guess that could be true if your not disciplined.

What got me thinking was that whilst being financially aware – I’ve not managed to make serious money. I wanted to get into that elusive league somewhere close to those super traders that we’ve all read about – I guess all of us want to get into that league.

Above I stated that I’m reasonably financially aware. I would say that I have intermediate knowledge of the financial markets – I’ve read loads of books on technical analysis, company analysis, books on commodities, futures, etc. But with all this knowledge so far, I’ve not made the money to retire on – which, lets face it is a dream that a lot of us aspire to. Quite frankly, I’ve got bored of reading these books as I’m not finding that I’m getting much more out of them.

What’s the point of me writing all of the above? Well I still believe there can be money made from the financial markets and given the current volatility of the markets, there are probably a mass of opportunities out there. What still attracts me is spread betting. I like this because any money that you make is free of all taxes at the time I’m writing this (Jan 2009). I’ve read about the super spread trader’s who have made millions in a very short space of time (usually less than 3 months). This I have found amazing because I know in theory you don’t need that many trades to ramp up some serious wedge.

Well, off course in my own trading I have tried this myself and have a few successful trades and then "wallop" a trade goes wrong and I’m back to square one.

Also, I’m no fan of leaving my hard earned money with fund managers – my own experience has shown that they are no better than just picking a share from the ftse list blind folded. What’s more, these so called professional investors should be able to protect investments in turbulent or adverse economic situations – I’ve not found this to be the case. This is hardly my definition of professional investing. My own personal experience has shown this not to be the case – and you have to pay charges for the privilege – Err No thank you!. So I have asked myself what’s the point? Off course there’s a point – one of them being there are many individuals who don’t have an interest or any inclination for financial investing.

So what’s the crack then? Well as it’s the beginning of the new year, I thought what I would like to try out my skill/luck at financial spread betting and put the trades out as a diary. So I’ll create a diary of the trades that I enter and exit and the reasons behind them and perhaps maybe get some feedback from the community. I would especially be interested in feedback from investors who have consistently done well in the markets. These diaries will initially be put together on a blog, but I will get a website together and document my progress on there.

In part II of my blog, I will document the rules I must follow. The reason for this is I want take a lot of the emotion out of trading. I’m hoping that this strategy will help me to become a more disciplined trader – I guess we shall see. I will also pick out a trading firm to trade with and make a short list of the markets that I’m interested in or I believe I can make money in.