Farmer Income Diversification.

[Pasty]

Finding it slightly odd that between your contact and yourself, you only seem to be able to make winning trades. Where are the losses? Or have you managed to find a system where you don't have any? Odder and odderrer.

 

[Clive]

Clive I thought you had traded CFD's.

IG Index have a daily CFD's on whether the FTSE100, DOW or DAX finish higher than the previous close.

The Target Price for the FTSE was Higher than 6274.05

The initial spread on the FTSE is 4 Points. You can at 52 and sell at 48. The figures then move depending on how many points it is away from the target price.

If the FTSE100 falls the selling price finishes at 0.00 and for some reason the buying price at 2.5.

If the FTSE100 rises the buying price is a 100.00 and the selling price is 2.5 I understand.

The 2.5 is probably IG's Margin as there is no buying or selling commission.

It all happens in 24 hours and the positions are closed out when the market closes.

Yesterday was a half day, and closed early.

At 2.20am I sold 10 units at £350.00 = £3500.00 Maximum Loss £6500.00 without a stop loss is the FTSE had finished up. The margin appears to be based on the Buying and not selling price, and the Margin required was about £7000.00. The FTSE was down and about 30 points from Target. The DOW had finished lower and the price had dropped. I put on a stop loss at £500.00 and my maximum loss was £1500.00.

In the morning I was showing a profit of over a £1000.00 all the indices were moving in my favour.

At 11.14am I sold another 10 Units at £241.00 = £2410.00. In aggregate I was still in profit, but the Theoretical Maximum Loss was now £7590 on this transaction, and the required margin was about £8000.00.

Will less an hour to market close, and FTSE well down, and with no change of recovering before 12.30pm, still showing increasing profits I sold again.

At 11.40am I sold another 15 Units at £169.00 = £1690.00 . Again in aggregate I was showing a profit, but the Theoretical Maximum Loss on this transaction was now £12465.00 and the required margin about £15000.00

I was watching my position and could have closed out at any point with the click of a button, and in profit.

Yes I put £40K on account to cover the required margins, but my maximum losses on this FTSE100 trade was never more than £1500.00.

Closed out automatically when the market closed at 12.30pm.

What exactly were the risks I was taking?

There is a vast difference between the Margin Requirement and Potential Losses on this kind of trade.

Clive please correct me if I am wrong.

I won't bore you with my trades on the Binary Wall Street Daily Index, but applying the same methodology, I made over £2600.00 and it was closed automatically and banked profits when Wall Street Closed.

I was betting on Certs after my initial sale, was always at least breaking even when I sold further.

IANTO

im not sure you have your head around this

put simply the reason you had to deposit 40k was because that was your potential liability if your bet had gone the wrong way, they don't want to hold your cash for fun, they want it to cover your potential loss, risking 40k to win 8.5 is not a smart trade

to explain the detail of why / how that all works is not my job and I don't want to be in anyway connected or responsible for you loosing a lot of money, all I will say is if you really want to do this please do a LOT more learning before risking more real money

you need to stop using terms like "dead cert" and "couldn't loose" ........there is no such thing and you can loose !

 

[Pasty]

I believe the explanation implies that the position is being chased up with a moving stop loss, so at a certain point, it will be stopped out in profit no matter what. Of course, this is folly in the long run. You will minimise your winnings and maximise your losses. I still don't get how all the trades described have gone in exactly the right direction. Beginners luck? Or fibs?

There is of course good money to be made. There was a day back in 2002 when my wife came home from work, exhausted as usual and I was sitting there with a glass of wine having made more than her year's salary on a series of trades on Colt Telecom. Those days are few and far between and there is a hell of a lot of hard work to achieve them now and again and more importantly, avoid the opposite scenario.

 

[IANTO]

Finding it slightly odd that between your contact and yourself, you only seem to be able to make winning trades. Where are the losses? Or have you managed to find a system where you don't have any? Odder and odderrer.

Yesterday was the first day I have traded. I was a winner on my two trades, but it required substantial funds deposited to cover the margin requirements, and I am still not entirely sure how margins work.

Buy picking days when the various indices are up or down substantially you can I believe make a regular profit, but you need substantial funds to do it.

If say you sell the FTSE100 at 10 an hour before close and sell 500 units when the market is down 30 points and Wall St is also heading lower and there is no change of it recovering, you will make £10K but could lose in theory lose £90K, and need a pot of a say £150K+ plus to open the position and cover the margin.

It is not something you would risk every day, but the FTSE100 follows Wall Street and is also influenced by the price of Oil my understanding, and by watching them, you have a reasonable idea of what will happen. You would have to pick and choose when to trade.

I can't speak for the person who introduced me to CFD's and Spread Betting, but he has only been trading since October, and overall is making a Profit he tells me.

He can afford to lose money, while I can't and will only bet on what I consider certs.

IANTO

 

[Clive]

Yesterday was the first day I have traded. I was a winner on my two trades, but it required substantial funds deposited to cover the margin requirements, and I am still not entirely sure how margins work.

Buy picking days when the various indices are up or down substantially you can I believe make a regular profit, but you need substantial funds to do it.

If say you sell the FTSE100 at 10 an hour before close and sell 500 units when the market is down 30 points and Wall St is also heading lower and there is no change of it recovering, you will make £10K but could lose in theory lose £90K, and need a pot of a say £150K+ plus to open the position and cover the margin.

It is not something you would risk every day, but the FTSE100 follows Wall Street and is also influenced by the price of Oil my understanding, and by watching them, you have a reasonable idea of what will happen. You would have to pick and choose when to trade.

I can't speak for the person who introduced me to CFD's and Spread Betting, but he has only been trading since October, and overall is making a Profit he tells me.

He can afford to lose money, while I can't and will only bet on what I consider certs.

IANTO

Being unsure how it works while trading with real money is mad - learn, before it all ends in serious tears !!!

You need to learn about ratios, you are taking massive risks in relation to your potential reward. Common wisdom is a profit/loss ratio of at least 2:1 or 3:1 per trade which means that for every £200 or £300 you make per trade, your potential loss should be capped at £100 - in your example above you describe a trade with a ratio of 1:9 !!! you can no way consistently make money with a ratio like that unless you own a crystal ball !

trailing stops won't save you if you trade goes the wrong way before you have covered the margin



Read more: The Myth Of Profit/Loss Ratios | Investopedia http://www.investopedia.com/articles/forex/07/profit_loss.asp#ixzz3w1CfmbOx
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[rob1]

For every winner in life there must be a loser

 

[Pasty]

No chance of recovering? The US markets can make some amazing moves on news. You could be wiped out by one event. Say 9//11 or something. I watched that on TV live at my terminal and couldn't close my positions fast enough. I lost a little but not a lot as I was hedged anyway. You also need to understand that the euro markets are generally slaves to the US future even when their indexes are closed. Not the price of oil. You say you can't afford to lose and only bet on certs but then also say you took a gamble and a pretty massive one at that. As I say, good luck with it. I'm not one to tell somebody what to do but in all my experience, this is a car crash waiting to happen.

 

[JNP]

If your happy risking 40k to gain 8k then just stick it in this and make 20k in 90mins....

 

[caveman]

Whatever happened to the good old idea of buying shares in a good solid company when the price was dropping due to events and cashing in when the values had risen due to other events?
Have commissions and taxes etc killed off that little game?
Or is it just not exciting enough for the get rich quick go getters?

 

[JNP]

£20k would be on its way to your pocket if you had taken my advise.... if only i have the guts and funds to do that.

 

[Pasty]

Whatever happened to the good old idea of buying shares in a good solid company when the price was dropping due to events and cashing in when the values had risen due to other events?
Have commissions and taxes etc killed off that little game?
Or is it just not exciting enough for the get rich quick go getters?

No, you can still do that and you can do it tax free if you like. Even if you buy standard shares, you have a hefty CGT allowance if you haven't used it on anything else. If you look at any index chart you will see V shaped dips now and again. Usually news shocks like 9/11. I know people who made a fortune over that event. Personally it wasn't for me. I was frantically closing positions as the second jet hit live on TV and even though it was clear that the market would recover and recover quickly, I didn't fancy making money on it. Maybe sentimental but there you go. Anyway, generally buying at a time of maximum fear and pessimism will have done you OK over the last 50 years or more if you were prepared to sit on it for a good while.

 

[IANTO]

No chance of recovering? The US markets can make some amazing moves on news. You could be wiped out by one event. Say 9//11 or something. I watched that on TV live at my terminal and couldn't close my positions fast enough. I lost a little but not a lot as I was hedged anyway. You also need to understand that the euro markets are generally slaves to the US future even when their indexes are closed. Not the price of oil. You say you can't afford to lose and only bet on certs but then also say you took a gamble and a pretty massive one at that. As I say, good luck with it. I'm not one to tell somebody what to do but in all my experience, this is a car crash waiting to happen.

I am fully aware that every small thing in distant corners of the world can affect the Markets.

The FTSE100 is heavily weighted by Oil and Commodity Stocks, and the price of oil and commodities does drag down the FTSE, let alone DOW futures.

It is now 3.30am, and the FTSE Futures have been volatile. By buying in and selling out back to back I have made £4K, and have no open positions. I believe you call this Hedging.

Time to go to bed!

Tomorrow is another day, and who knows what it will bring.

IANTO

 

[The Ruminant]

I am fully aware that every small thing in distant corners of the world can affect the Markets.

The FTSE100 is heavily weighted by Oil and Commodity Stocks, and the price of oil and commodities does drag down the FTSE, let alone DOW futures.

It is now 3.30am, and the FTSE Futures have been volatile. By buying in and selling out back to back I have made £4K, and have no open positions. I believe you call this Hedging.

Time to go to bed!

Tomorrow is another day, and who knows what it will bring.

IANTO

It sounds easy money but there's someone at the other end of your trades who's lost £4K. How come you got it right and they got it wrong?

 

[Oilseed and Pulse Trader]

Interesting thread, I hope it continues.

You should post the trades you do as they happen, would be interesting reading and will make sure you stay disciplined with your approach.

 

[IANTO]

It sounds easy money but there's someone at the other end of your trades who's lost £4K. How come you got it right and they got it wrong?

There are always winners and losers.

If trading Shares or CFD's in Shares someone has sold at a profit or decided to cut their losses.

When trading indexes it is Market Makers or Brokers who stand the loss or make a profit.

As has been said by Clive and Patsy, it is a full time job, as you can make or lose a few hundred pounds in minutes, depending on the size of trade.

A volatile market has possibilities. 5 points up one minute and 10 points lower a few minutes later, means if you are watching live rates "flashing blue and red numbers" as Clive said, you can make small profits of £100 to a £1000 or more in a very short time.

Take a small profit and bank it, and start again.

I will trade when I have time to watch the market. DOW Futures and Oil and Commodity Prices, which have an effect,

Having positions open over days means you are charged interest etc.

If you open and close a position in 24 hours, these are not incurred.

IANTO

 

[IANTO]

Interesting thread, I hope it continues.

You should post the trades you do as they happen, would be interesting reading and will make sure you stay disciplined with your approach.

Where are the Potash Freaks?

At one time there was a thread on here that suggested a certain Potash Share was the best thing since sliced bread!

They have gone very quiet!

IANTO

 

[Oilseed and Pulse Trader]

Where are the Potash Freaks?

At one time there was a thread on here that suggested a certain Potash Share was the best thing since sliced bread!

They have gone very quiet!

IANTO

Know nothing about it but I bet the way ag commodities have gone those shares wouldn't be doing too good!

 

[IANTO]

Know nothing about it but I bet the way ag commodities have gone those shares wouldn't be doing too good!

Found the thread "Yorkshire Potash" a mine being developed by Sirius Minerals was the flavour of the month, for several months.

What happened?

Change and add couple of letters in Sirius, and you have Serious.

You then only need to stick Con. on the end, and you have:

Serious Potash Con.

I wonder how many who swallowed the initial post, will admit that they feel that they were conned?

IANTO

 

[Oilseed and Pulse Trader]

Found the thread "Yorkshire Potash" a mine being developed by Sirius Minerals was the flavour of the month, for several months.

What happened?

Change and add couple of letters in Sirius, and you have Serious.

You then only need to stick Con. on the end, and you have:

Serious Potash Con.

I wonder how many who swallowed the initial post, will admit that they feel that they were conned?

IANTO

SO what's yopur thoughts on the FTSe today?

 

[IANTO]

SO what's yopur thoughts on the FTSe today?

This all new to me!

FTSE is currently at 6120 approx.

From what I read from analysts.

The next support level is apparently around 6073.

If it finishes up after Wall Street has Opened Higher then 6200 is the first target.

Next target is 6255.

Then they say it could hit 6400.

Analysts!

They stick finger up a Cats arse and then smell it!

If it smells of fish the market will fall.

Your guess is as good as mine or theirs!

IANTO