Sharks - take them with a pinch of salt
Updated: Aug 30, 2018
Note to those embarking on a trading journey (experienced traders can skip this one) Keep your capital safe - it's not just through trading that you'll find it taken from you.
I'm sure you've seen those ads? - someone (apparently a trader) lying back on a deck chair on the beach with a PC on their lap examining charts? Yep? so have I. Truth be told, it's an image that helped to seduce me into this business too. Thousands of screen hours later, I'm here to tell you, well .... I won't but you can guess. In that beautiful blue sea, lurk some of the most vicious and unemotional sharks on the planet but if you're prepared to put in the hours, - you too can earn (that's earn - sorry trading as a retail trader is not a get rich quick trick) your place on that deck chair ... to check and adjust mind, trying to do proper analysis would be a proper thrill!
But you want to make money ... Right?
Is that a ridiculous question or what! Of course you do. I'm not going to get all philosophical about "why", etc (although it's a question you might want to ask yourself, perhaps sooner rather than later) but it is actually a question you need to have a totally congruent answer to right up front because if that's your intention, guess what, you'll need some to start with. And if you want to replace your current income don't think (and don't be conned into believing , because that's what it is) that £500 will do to start with - because if you're a beginner you will loose it very quickly - Guaranteed. I cannot tell you how sad I am to tell you this but please read that last bit again. Unless you are able and willing to put in a substantial amount of money up front, don't expect to replace the money you earn in the day job by trading, over night (week, month or even year ...). The sums and the laws of probability are just not on our side for that to happen. The more money you can put in (and be prepared to loose,) the better this journey will be though. Is it getting a bit weird?
Are you put off? Don't be - it is possible if you're willing to put in the hours.
Let's come down to earth a bit now and take the scary mask off - reality check delivered. Spread betting is a very simple and easily accessible means of making your money grow well beyond the rates offered by traditional investment methods - e.g, ISAs, Bank savings accounts, pensions etc. But because of the dynamics of the market (risk) and the constraints of regulation (to guard ordinary people like us from loosing everything - thanks regulators) spread betting companies "have to" (they will be so annoyed by that ... can you feel the irony yet?) impose minimum account balances to be maintained in order to trade. Oversimplification>> These are typically known as Margin accounts. There's lots of impenetrable gobbledygook about that on websites about spread-betting but essentially, you put a sum of money into an account with your chosen spread betting company (let's call them your broker for short) and you bet a proportion of that every time you trade. But whilst you can make (win) multiples of your stake, you can just as easily (in fact much more easily) loose multiples. So"if" (!) your account goes below a certain level the spread-betting firm is "obliged" via the good intentions (hmm..) of regulation to close your trades out ... or ask you for more money. You can see where this is going right? Long story short, beginners typically dabble a few hundred pounds to start - loose it - put some more in ... etc, etc. You can see where this ends up (i.e money in brokers pockets). So hopefully now my original question: are you in this to make money? .. makes some sense. If you are - put a decent amount in to start with (if you need advice on that, contact me) - spend time in front of your screen learning the business and be determined. Otherwise - there are thousands of professionals who are waiting to welcome you and your £500 and 20 minutes a day into their world.