My Spread Betting Gains and Losses
Spread Betting Trading Centre: What was your largest gain and largest loss; and did these occur with any sequence of events?
Bob Smith: I tend not to remember them. You take gains and losses as part of trading and just get on with it. My biggest loss on a single position is £1000 because I use stops, but I lost about £6000 in March this year when the market came back and triggered several stops at around the same time. I've had quite a few major gains mainly in the mining and electricity sectors over the last couple of years, and made a few thousand quite quickly by shorting Carpet right a couple of years ago. I always take a windfall profit. I took a position on BHP one morning and checked the price just before I left to go racing. I was up by almost £2000 so I took the profit there and then. That tends not to happen very often, but I do find mining stocks a good way of making short term money: I sometimes depart from my general principles and take day positions without a stop on stocks like BHP, Anglo and Xstrata but only when I have the time to watch them pretty much non-stop all day and the gain is hardly with the cost in terms of nervous energy!
Spread Betting Trading Centre: What market(s) do you bet in and do you have a favourite? If so why?
Bob Smith: I only bet UK equities because it’s the market I know and I suspect it’s easier to lose money trading markets you don’t know. I also bet other indices, principally the DAX and CAC, occasionally
Spread Betting Trading Centre: What mistakes (if any) have you made and what did you learn from them?
Bob Smith: By the time I started spread betting I’d got most of my mistakes out of my system, but over the years I’ve made all of the ones people make. No matter how much you read or what people tell you, the only thing you learn from is losing your own money. The biggest mistake of all is averaging down when a position goes against you, because you believe that you’re right and the rest of the world will come round to your way of thinking.
The other key thing is not taking too much initial risk. I start with one position and if it works for me I add to it. It’s not unusual for me to have 5 or more positions in the same stock, as long as it keeps moving in the right direction for me. I manage my partner’s portfolio as well as my own and could never understand why hers did consistently better than mine, when we often held the same stocks. I then realised it was because I took more risks with mine and only bought for her when things were going well. That way she missed out on some of the initial gains but more important, missed out on the big losses: that way her portfolio consistently outperformed mine. I’ve now adopted that strategy on my own as well!!!
Page 1 - My First Spread Bet
Page 2 - Never Change a Spread Betting Stop Loss Page 3 - My Spread Betting Gains and Losses Page 4 - Spead Betting Tips and Methods
