Spread betting as a full time occupation...

[f13ldy]

Not for a company, but on your jack at home with your own cash.

Assuming a 6/12 month knowledge of markets and a reasonable initial investment of say circa £2k.

Do you think you could turn a profit of £1500 net a month?

Treating it as a full time occupation for say 6-7 hours a day.

[Timmy35]

No. That's too little capital IMO.

I'd say you need more like £20k minimum

What are you thinking of trading, FX, commodities, Equities, Bonds?

Edited to add, one piece of advice, don't chase the market, let it come to you.

Edited by Timmy35 on Tuesday 27th July 14:38

[f13ldy]

My initial thought was that 2k was certainly too low to take into account an early loss.

Mainly looking at commodities, precious metals and maybe a dabble with fx.

[Timmy35]

f13ldy said:

My initial thought was that 2k was certainly too low to take into account an early loss.

Mainly looking at commodities, precious metals and maybe a dabble with fx.

Commodities and metals are far too volatile with that little on margin. At £1 a point on crude or gas you can easily see swings of £400+ a day. Nice if you're winning, not so nice otherwise.

FX is similar but not so bad, and you can at least enter trades that offset e.g. long Euro/Yen short Euro/$. However again the P&L is quite large.

You could start off with some equties that are related, say Xstrata, BHP, BP etc. And trade those in smaller less volatile amounts whilst you get used to things.

I think you're asking for a large monthly gain though.

Also it will tend to come in lumps, looking for a regular income puts pressure on you to close out bets too early/often IMO.

[Dr Phibes]

Timmy35 said:

f13ldy said:

My initial thought was that 2k was certainly too low to take into account an early loss.

Mainly looking at commodities, precious metals and maybe a dabble with fx.

Commodities and metals are far too volatile with that little on margin. At £1 a point on crude or gas you can easily see swings of £400+ a day. Nice if you're winning, not so nice otherwise.

FX is similar but not so bad, and you can at least enter trades that offset e.g. long Euro/Yen short Euro/$. However again the P&L is quite large.

You could start off with some equties that are related, say Xstrata, BHP, BP etc. And trade those in smaller less volatile amounts whilst you get used to things.

I think you're asking for a large monthly gain though.

Also it will tend to come in lumps, looking for a regular income puts pressure on you to close out bets too early/often IMO.

Superb points

[f13ldy]

Thanks Tim. Cleared it up very well.

Maybe I can use it to supplement another home-based income instead...

[walm]

Sure anyone with £2k just needs his wits about him and can earn over £20k gross a year day trading, it's really easy... not.

Link says minimum $100k, but has no sources.
http://www.edubook.com/day-trading-for-a-living/25...

Apparently wikipedia says 90% of day traders fail but I couldn't find that reference either.

So let's do the math, working backwards from £1,500 per month.

Total per year is £18k.

Since the markets return on average 7% a year and assuming you can match the market (remember most full time investment management professionals with years of experience fail to meet even the market) then you would need just over £250k to generate that kind of return.

That of course forgets to include trading costs. Since you are talking about 6-7 hours a day then presumably you would be doing a fair few trades.
Say £10 each? What minimum of 5 trades a day? So £50 x 250 trading days a year means you need another £12.5k just to make your trades.
So you need to earn c.£30k per year in total. Again assuming 7% returns that implies £430k or so.

£2k? Not so much...

Just think for a minute what you are suggesting.
You are suggesting that you can almost double your money EVERY MONTH.

You are suggesting that with less than a year's training someone with £20k could earn £15k per month (just multiplying your numbers by 10).
That is a gross income of c.£300k.

Why on earth wouldn't the whole world be doing this wonderful work?

Sure with spread betting you can lever up. Minimum deposits are typically 10% so your £2k could allow you to make an investment the same size as a £20k unlevered position.
You are still orders of magnitude away from the capital required.

Just my 2p.

If you really think you can earn return of 7.5% per month (£1,500 over your £2k levered 10x), then I strongly suggest you send your trading history and CV to Man Group, GLG Partners, Gartmore or Marshall Wace.
They will pay you a lot more than £1,500 a month.

[limpsfield]

f13ldy said:

Assuming a 6/12 month knowledge of markets and a reasonable initial investment of say circa £2k.

Do you think you could turn a profit of £1500 net a month?

A piffling 70% return per month?

Month in month out?

Do people get out of bed for such stuff?

<this is sarcasm by the way>

[Timmy35]

f13ldy said:

Thanks Tim. Cleared it up very well.

Maybe I can use it to supplement another home-based income instead...

Why not target £200 a month intially. It's tax free and a good return. Don't feel you need to always be in the market, look for oppotunities as they arise. And try not to volume/day trade, even though there's no comission on spread bets, the spreads themselves will eat into your capital quite quickly if you do. That's important, keep an eye on the bid/offer spreads they vary all the time.

You can make very good returns, but do be very wary about commodities, the volatility makes them seem attractive but it can be unpredicatable and deadly, because they're quite small markets they can also pay absolutly no attention to fundamentals for quite long periods.

[ATM]

Is anyone on here admitting to doing this for a living?

All I see is a lot of maybe this or that. The problem with asking people on anonymous forums is you dont know whats true and whats not.

You could make a go of it with 2k if luck was on your side but you would probably lose it quicker. Learning to trade initially with pretend money might help.

If you start to look at the maths then its all about Risk : Reward and Win Ratios. I certainly think its possible. But how do you pay your mortgage / rent in those 12 months while you figure it out?

I met a guy through work who lost his home, wife and kids trying to figure it out. He went broke in 7 months gambling on oil while trying to hold down a full time job. He went to various gambling anonymous meetings and met several other people who had all done the same thing. It was not a nice story.

[Timmy35]

ATM said:

Is anyone on here admitting to doing this for a living?

All I see is a lot of maybe this or that. The problem with asking people on anonymous forums is you dont know whats true and whats not.

You could make a go of it with 2k if luck was on your side but you would probably lose it quicker. Learning to trade initially with pretend money might help.

If you start to look at the maths then its all about Risk : Reward and Win Ratios. I certainly think its possible. But how do you pay your mortgage / rent in those 12 months while you figure it out?

I met a guy through work who lost his home, wife and kids trying to figure it out. He went broke in 7 months gambling on oil while trying to hold down a full time job. He went to various gambling anonymous meetings and met several other people who had all done the same thing. It was not a nice story.

I did. My experience was thankfully the exact opposite to your friends, however I would not recommend it long term. It was a strange point in my life looking back on it. And I'm glad I went back to a 'normal' life style.

[walm]

ATM said:

Is anyone on here admitting to doing this for a living?

I pick stocks for a living.
Not with just my money, I hasten to add.

Perhaps that means I know nothing about FX trading and commodities.
What I do know is risk-reward.
Generating annual returns of >15% consistently would make you one of the world's greatest traders ever.
Buffett has done 20.3% from 1965-2009 and is regarded as a legend. He is the 3rd richest man in the world.

Generating 900% annual returns (£1.5k x 12 / £2k) is a ridiculous target.

Again, my 2p.

[ATM]

Timmy35 said:

ATM said:

Is anyone on here admitting to doing this for a living?

All I see is a lot of maybe this or that. The problem with asking people on anonymous forums is you dont know whats true and whats not.

You could make a go of it with 2k if luck was on your side but you would probably lose it quicker. Learning to trade initially with pretend money might help.

If you start to look at the maths then its all about Risk : Reward and Win Ratios. I certainly think its possible. But how do you pay your mortgage / rent in those 12 months while you figure it out?

I met a guy through work who lost his home, wife and kids trying to figure it out. He went broke in 7 months gambling on oil while trying to hold down a full time job. He went to various gambling anonymous meetings and met several other people who had all done the same thing. It was not a nice story.

I did. My experience was thankfully the exact opposite to your friends, however I would not recommend it long term. It was a strange point in my life looking back on it. And I'm glad I went back to a 'normal' life style.

Well Done for owning up. I'm surprised though that if you found that pot of money at the end of the rainbow that you chose to leave it behind.

[hairykrishna]

f13ldy said:

Not for a company, but on your jack at home with your own cash.

Assuming a 6/12 month knowledge of markets and a reasonable initial investment of say circa £2k.

Do you think you could turn a profit of £1500 net a month?

Treating it as a full time occupation for say 6-7 hours a day.

No.

2k is fk all really. Making bets to clear 1500 a month, you could lose that in an afternoon and it wouldn't even be that unusual.

[ATM]

walm said:

ATM said:

Is anyone on here admitting to doing this for a living?

I pick stocks for a living.
Not with just my money, I hasten to add.

Perhaps that means I know nothing about FX trading and commodities.
What I do know is risk-reward.
Generating annual returns of >15% consistently would make you one of the world's greatest traders ever.
Buffett has done 20.3% from 1965-2009 and is regarded as a legend. He is the 3rd richest man in the world.

Generating 900% annual returns (£1.5k x 12 / £2k) is a ridiculous target.

Again, my 2p.

Another congrats for owning up. However surely 20% is not the target people are looking for if they want serious life changing money.

I read something in a Paper / Magazine [cant remember where] just this weekend about some well known London based commodities trader. He has just bought millions of tonnes of cocoa beans for many $100m. He apparently started out his career as a cycle courier. Now he lives in an 11m gaff in Mayfair or something like that - you get the jist.

However I agree 900% is a little ambitious too.

[Timmy35]

ATM said:

Well Done for owning up. I'm surprised though that if you found that pot of money at the end of the rainbow that you chose to leave it behind.

The firm I was using seemed very taken a back when I simply closed the account and took the money. I think I was just lucky, I happened to be shorting the £/$, £/yen and Euro/$, plus oil at a point when there were moves occuring that looking back are hardly ever seen.

If I hadn't closed out when I did the subsequent rally would have taken it all back off me. I didn't expect oil to rally from $40 all the way back to $85, or the Euro to go from 1.20 back to 1.50....I'd have been crucified. That's probably what caught your friend.

[ATM]

ATM said:

walm said:

ATM said:

Is anyone on here admitting to doing this for a living?

I pick stocks for a living.
Not with just my money, I hasten to add.

Perhaps that means I know nothing about FX trading and commodities.
What I do know is risk-reward.
Generating annual returns of >15% consistently would make you one of the world's greatest traders ever.
Buffett has done 20.3% from 1965-2009 and is regarded as a legend. He is the 3rd richest man in the world.

Generating 900% annual returns (£1.5k x 12 / £2k) is a ridiculous target.

Again, my 2p.

Another congrats for owning up. However surely 20% is not the target people are looking for if they want serious life changing money.

I read something in a Paper / Magazine [cant remember where] just this weekend about some well known London based commodities trader. He has just bought millions of tonnes of cocoa beans for many $100m. He apparently started out his career as a cycle courier. Now he lives in an 11m gaff in Mayfair or something like that - you get the jist.

However I agree 900% is a little ambitious too.

Maybe I imagined the bit about him starting life as a cycle courier?

http://www.thisismoney.co.uk/news/article.html?in_...

[ATM]

Timmy35 said:

ATM said:

Well Done for owning up. I'm surprised though that if you found that pot of money at the end of the rainbow that you chose to leave it behind.

The firm I was using seemed very taken a back when I simply closed the account and took the money. I think I was just lucky, I happened to be shorting the £/$, £/yen and Euro/$, plus oil at a point when there were moves occuring that looking back are hardly ever seen.

If I hadn't closed out when I did the subsequent rally would have taken it all back off me. I didn't expect oil to rally from $40 all the way back to $85, or the Euro to go from 1.20 back to 1.50....I'd have been crucified. That's probably what caught your friend.

We are not friends I might add. I found it hard to believe he had ended up in that situation. But from what he was telling me he had NO strategy. He just went long or short and probably 'all in' based on his mood / gut / err the moon! He was looking for 40 or 50 points in say an hour or less.

[walm]

ATM said:

I read something in a Paper / Magazine [cant remember where] just this weekend about some well known London based commodities trader. He has just bought millions of tonnes of cocoa beans for many $100m. He apparently started out his career as a cycle courier. Now he lives in an 11m gaff in Mayfair or something like that - you get the jist.

Anthony Ward
Started out managing other people's money.
Still does (although probably a lot of his $1.5bn AUM is his).

http://dealbook.blogs.nytimes.com/2010/07/26/trade...

[g4ry13]

limpsfield said:

f13ldy said:

Assuming a 6/12 month knowledge of markets and a reasonable initial investment of say circa £2k.

Do you think you could turn a profit of £1500 net a month?

A piffling 70% return per month?

Month in month out?

Do people get out of bed for such stuff?

<this is sarcasm by the way>

That's based on the assumption that withdrawals are made at the end of each month. If they are then it's a difficult task, but if there is some consistency and compounding effect then it's possible at end of a 12 month period to have averaged £1.5k/month.