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Pay Off The Mortgage ...


okaycuckoo
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Spreadbetting tops my salary up although I only aim for 25 pips a day and then stop. Only put on £2 per pip but most weeks hit my 125 pip target so make approx 1k a month tax free give or take.

Why stop if it works so well? Do you think the market is somehow affected by whether you already traded some small change earlier that particular day, or whether you are feeling greedy at that moment?

Has it occurred to you that anyone who has any advantage over the market whatsoever can become very wealthy very quickly? Exponential growth would be trivial to achieve if you can reliably do 25 (or any number exceeding the spread) of pips, and it would not be the lazy kind that comes with most bank accounts. Let's face it - the only reason why you "aim" to make just £1k a month is that you would not be able to afford the losses if you wanted to make any more than that.

It seems self-evident to me that anyone who i) claims to have a reliable way of making money from spread-betting, and ii) is not enormously wealthy must necessarily be suffering from a bad dose of self-delusion? Compared to someone like that, a home-owner thinking their house will keep going up at >10% a year is basically rational.

Still, it would be quite good if gambling took off as homeowners' favorite past-time, though i'd rather they gambled by means of the National Lottery :-)

50 Fib and round numbers (00) are the only indicators I use.

This is pure gold. Have you noticed how a lot of people want to sell a "trading bot" for currencies? I always wondered if anyone would be sufficiently daft to pay for one without asking why it is for sale if it supposedly works. Perhaps the people who believe easily falsifiable indicators are the same ones who pay for the bots.

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Why stop if it works so well? Do you think the market is somehow affected by whether you already traded some small change earlier that particular day, or whether you are feeling greedy at that moment?

Has it occurred to you that anyone who has any advantage over the market whatsoever can become very wealthy very quickly? Exponential growth would be trivial to achieve if you can reliably do 25 (or any number exceeding the spread) of pips, and it would not be the lazy kind that comes with most bank accounts. Let's face it - the only reason why you "aim" to make just £1k a month is that you would not be able to afford the losses if you wanted to make any more than that.

It seems self-evident to me that anyone who i) claims to have a reliable way of making money from spread-betting, and ii) is not enormously wealthy must necessarily be suffering from a bad dose of self-delusion? Compared to someone like that, a home-owner thinking their house will keep going up at >10% a year is basically rational.

Still, it would be quite good if gambling took off as homeowners' favorite past-time, though i'd rather they gambled by means of the National Lottery :-)

This is pure gold. Have you noticed how a lot of people want to sell a "trading bot" for currencies? I always wondered if anyone would be sufficiently daft to pay for one without asking why it is for sale if it supposedly works. Perhaps the people who believe easily falsifiable indicators are the same ones who pay for the bots.

You can make money from spread betting just as you can make money from trading any financial markets. People male careers out of it. But it's very difficult and very risky.

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You can make money from spread betting just as you can make money from trading any financial markets. People male careers out of it. But it's very difficult and very risky.

Errm, it probably works best if you are the spread better? Yes, you can make a career out of being a currency trader if you have access to substantial capital, but the point stands that the vast majority of people betting on currency movements are deluded fools. Just how do you reconcile someone claiming they can make 1% a month with them not being exceeding wealthy? More to the point, how can they do it themselves (oh, I just got greedy those three months; oh, I just did not stick to following the 00 round number signal; oh, I traded more than 25 pips in a day). Finally, it is well known the vast majority of them make losses. Just why do you think they keep coming for more if they have even a tenuous grasp of reality?

BTW, isn't "very risky" another way of saying it does not really work? Surely, the very point of being a decent trader is not to take large risks with your own money or career?

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Errm, it probably works best if you are the spread better? Yes, you can make a career out of being a currency trader if you have access to substantial capital, but the point stands that the vast majority of people betting on currency movements are deluded fools. Just how do you reconcile someone claiming they can make 1% a month with them not being exceeding wealthy? More to the point, how can they do it themselves (oh, I just got greedy those three months; oh, I just did not stick to following the 00 round number signal; oh, I traded more than 25 pips in a day). Finally, it is well known the vast majority of them make losses. Just why do you think they keep coming for more if they have even a tenuous grasp of reality?

Agreed.

BTW, isn't "very risky" another way of saying it does not really work? Surely, the very point of being a decent trader is not to take large risks with your own money or career?

well yes but if you are a professional trader you will know that even if it's not your own money you are trading you will be out of the job within days if you fail to make decent returns. You have to be a bit of an adreline junkie to do that job. Probably why the majority of then are coke addicts.

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Have you lost your mind? 4% a *year* is ambitious for any strategy that is meant to preserve the capital. I vaguely recall that Madoff was claiming to make approx 1.5% a month, so calling nearly three times that "reasonable" has substantial potential if you are into stand-up comedy. Do you realise that 1% a week is 67% a year? I have seen Ponzi schemes promising less.

No, I haven't lost my mind. 4% a year is peanuts, you can get that in a bank. IIRC Soros has an average return of 30% per annum. Obviously the comparison with a penny day trader and the big boys is absurd. Soros doesn't start every day wholly in cash. The way it would work is this. You bet 1% of your account, with a stop of 1% and a target of 1%. So with a £10k account you bet £100 at £5 a pip. Stop of 20 pips, target 20 pips. Doing it this way if you are right more times than wrong, you'll get your 1% a week. Obviously this doesn't work as you scale up for the big boys for obvious reasons, but money can be made this way.

Please stop before everyone dies of laughter. It is fundamentally impossible for more than a few people on the planet to recognise dead-certs in the liquid forex markets with any reliability. If they exist at all, they can be easily recognised because they associate with other billionaires. If you don't, you are not one of them. "Currently", eh?

Once you get used to reading charts you can predict short term movements and get it right frequently enough to generate a return.

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No, I haven't lost my mind. 4% a year is peanuts, you can get that in a bank.

Not on short-term money you cannot. That is why savers are so bloody annoyed. I am pretty sure you would know that if you had any cash :-)

IIRC Soros has an average return of 30% per annum.

Right, so twice that (i.e. 1% per week) is still a reasonable target as far as you are concerned?

You bet 1% of your account, with a stop of 1% and a target of 1%. So with a £10k account you bet £100 at £5 a pip. Stop of 20 pips, target 20 pips. Doing it this way if you are right more times than wrong, you'll get your 1% a week. Obviously this doesn't work as you scale up for the big boys for obvious reasons, but money can be made this way.

I am prepared to admit the possibility of you knowing something I don't, but if you are not phenomenally wealthy then the above is very unlikely to work. I think the problem might be that it's basically impossible to be reliably right more than you are wrong, especially about something about as predictable as a coin toss.

Once you get used to reading charts you can predict short term movements and get it right frequently enough to generate a return.

The whole point I was making is that only the deluded believe that. No-one can do it reliably under controlled conditions, and most people probably cannot tell the difference between a completely random sequence and a stock chart. I suppose they might not be worried because they think they can predict random numbers, or because they are convinced they don't need to be able to tell in order for their method to work. BTW, there are surprising patterns that are predictable and stock prices are far from random. It's just that i) you need a vast amount of money to exploit them, and ii) chartists rarely know their **** from their elbow, so it's a lot better to ask a statistician if you really want to go down that investment route.

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No, I haven't lost my mind. 4% a year is peanuts, you can get that in a bank. IIRC Soros has an average return of 30% per annum. Obviously the comparison with a penny day trader and the big boys is absurd. Soros doesn't start every day wholly in cash. The way it would work is this. You bet 1% of your account, with a stop of 1% and a target of 1%. So with a £10k account you bet £100 at £5 a pip. Stop of 20 pips, target 20 pips. Doing it this way if you are right more times than wrong, you'll get your 1% a week. Obviously this doesn't work as you scale up for the big boys for obvious reasons, but money can be made this way.

Once you get used to reading charts you can predict short term movements and get it right frequently enough to generate a return.

AHAHAHAHAHAHAHAHAHA

You know, there are advertisements on the local radio featuring housewives doing spread betting at home to "supplement their income".

Are you one of them?

AHAHAHAHAHAHAHAHAHAH

Lambs to the slaughter for the big boys, every single one of them.

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This guy isn't day trading - he's gambling with eye watering leverage! In his eyes the upside is there's no tax to pay on his gains. The question isn't even "What gains?" - it's "How do I negotiate my bankruptcy"

Guaranteed to get a long Bankruptcy Restriction Order (BRO) when the Official Receiver finds out his has been gambling. Probably 5 years of no credit (maybe not such a bad thing) name in the local rag etc etc. That's a gamble I wouldn't take.

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Not on short-term money you cannot. That is why savers are so bloody annoyed. I am pretty sure you would know that if you had any cash :-)

:P

Right, so twice that (i.e. 1% per week) is still a reasonable target as far as you are concerned?

Yes, because it doesn't scale up. It would only work at the lower end and remaining in cash. Obviously once you get a larger sum of cash you'll want to diversify.

I am prepared to admit the possibility of you knowing something I don't, but if you are not phenomenally wealthy then the above is very unlikely to work. I think the problem might be that it's basically impossible to be reliably right more than you are wrong, especially about something about as predictable as a coin toss.

We'll have to agree to disagree on that one. It is more predictable than that. As you say, for most people it is a non-starter as in order to live off it (and I am not saying I live off my spread betting or ever will - it is hobby) you'd need to start off with a fair wedge of cash. I am not stating living off it is easy to do or that I would attempt it, but I stand by my comments it is possible to do. I have personally seen this myself. As I said before if the guy paying off the mortgage really has the cash to do it he's better off paying down his debts.

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Spoke to a guy who's in trouble with his mortgage. About 60 years old, nice chap, upbeat. He bought in 2002, with second wife. He owes £275k + £80k on a second charge, property on market for £355k quick sale. £14k in arrears, monthly instalments over £1k. Term expires in less than a year.

He has a failing franchise, but wants to keep the house because the projected earnings will cover it. Also said he expects to earn enough through forex dealing. Wha? You mean spread betting? Yes, I've been watching the market for a couple of years and now I have a system for currency pairs. Just started to use it, and I get updates every morning. I won't be greedy, just playing the volatility. Problem is my broadband goes down regularly and I have to restart the computer ...

I covered my eyes. Couldn't watch.

My thoughts and prayers are with him. I genuinely hope that he can extricate himself from the jaws of financial disaster.

Edited by Cicero
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Yes, because it doesn't scale up. It would only work at the lower end and remaining in cash. Obviously once you get a larger sum of cash you'll want to diversify.

Isn't currency the most liquid conceivable asset? Just how could your strategy no scale up to £millions?

We'll have to agree to disagree on that one. It is more predictable than that. As you say, for most people it is a non-starter as in order to live off it (and I am not saying I live off my spread betting or ever will - it is hobby) you'd need to start off with a fair wedge of cash.

At 1% a week you barely need £50k to live off. With £100k you can reinvest enough to become a billionaire in a couple of decades. These are trivial amounts that most people with a job can raise. Alternatively, anyone with a credible business plan likely to produce that yield can easily borrow all the money he needs.

I am not stating living off it is easy to do or that I would attempt it, but I stand by my comments it is possible to do. I have personally seen this myself. As I said before if the guy paying off the mortgage really has the cash to do it he's better off paying down his debts.

Possible? Yes, you can take a few k, bet it on red every month, and live off the "proceeds". The only problem is that on average you will last a month, and it's not different from just spending the capital except the casino also wins. Just why would he better off doing that when he just needs to ask someone who can spot a "dead cert"?

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Whilst this may be true, in addition to FaFa's point about the emotions of betting on a trade after 6 successive losing trades, there is also the possibility of being wiped out by a statistically small chance of a losing sequence of trades. That is what also needs to be covered. And so 'punting' on forex may not be a solution because you would never be able to put a high enough proportion of your total assets in it to make it worthwhile because of the risks.

About 10 years ago I decided to track my entire worth across all assets monthly (I'm a saddo). Over that time I have gradually placed my assets into higher returning vehicles...sold house, closed down company pensions, sold up low returning endowments blah blah blah. I had to take really big hits to do this so I spread it over a period of years to lessen the pain. I also distrusted the opacity of it all and wanted to be totally liquid in the event of a currency crisis. It is incredible how just improving the return by just say 1% or 2% across your entire portfolio, your entire worth, can do versus having a really stunning return on a relatively small amount tied up in a forex spread betting account.

Total balance sheet management is the way to go. B)

i am not sure i understand but i like it

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Isn't currency the most liquid conceivable asset? Just how could your strategy no scale up to £millions?

1. I don't think Soros manages his billion dollar positions by phoning up IG Index and telling them he wants to buy EURUSD at 14360 with a guaranteed stop at 14340 at £50m a pip. I'd be surprised if he is trading off 5 min or 15 min charts.

2. Trading short term is time consuming and like watching paint dry. Once you have sufficient funds to diversify why on earth would you want to keep doing it? You'd be looking for something that gives you a decent yield with minimum attention. Spread betting forex needs your attention.

3. The 1% depends on the scale. I don't think you could bet with a 20 pip margin on a daily or 4 hr chart. If you were trading off the 4 hr you are more likely to be looking at a 100 pip or 200 pip stop, which would mean that you need to be looking at a 100 or 200 pip movement for your 1%. This is a lot less risky, but getting on the right side of a 100 pip or 200 pip movement takes longer and would reduce the return.

Possible? Yes, you can take a few k, bet it on red every month, and live off the "proceeds". The only problem is that on average you will last a month, and it's not different from just spending the capital except the casino also wins. Just why would he better off doing that when he just needs to ask someone who can spot a "dead cert"?

Betting 1% on each trade you should not burn out in a month. And spread betting is not like roulette - but I suspect we will have to agree to disagree. Out of interest, have you ever tried speculating?

By the way, what I have described isn't the precise way I do it. I gave it as an example that it is possible, albeit very difficult.

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The only problem is that on average you will last a month, and it's not different from just spending the capital except the casino also wins.

The spread betting firms always win. Any sort of spread that matches a buyer and seller means they win.

Some of the punters win, some of the punters lose.

At one of my former employers, (a bank, I work in IT) set up a room with traders and punters as an exercise. The best punter got a bottle of champers (luckily it was me! ). Now although I made millions, and considerably more than any the traders, my risk was very high, I didn't care as it wasn't real money. 80% of the punters lost money, and I was the only one to make significant money. Some of the punters lost more than I had won.

Not one of the traders lost. They all made because whenever I placed a large stake one way they offset it.

No matter how good your strategy is, things can go wrong. I used to make lots of money on the demo account, but never tried it with real money due the the knowledge that there are losers.

So if you want to pay the mortgage, set up a spread betting firm. Or a bookmakers. Or a bank :lol:

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