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http://www.fintrader.net Vince Stanzione gives top tips to financial spread betting. Learn how to make trading shares following a step by step fx,commodities following a st

http://www.fintrader.net Vince Stanzione gives top tips to financial spread betting. Learn how to make trading shares following a step by step fx,commodities following a st

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Financial Spread Betting Tips 2013 Financial Spread Betting Tips 2013 Document Transcript

  • CUSTOM SOLUTIONS 10 tips from a trading veteran to help you put the odds in your favourWhen you have been trading futures, options, stocks and commoditiesfor over 26 years, it can be easy to forget what it was like starting out. Inthis booklet, I will share with you some of the secrets that I wish I’dknown when I started trading. Whilst I have focused on Financial SpreadBetting, the principles I outline are valid, regardless if you’re using CFDs,FX, Futures, Exchange Traded Funds, or just buying shares via broker. Copyright © 2011,2012 by First Information All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic, or mechanical, including photocopying, recording, or by any information storage and retrieval system without prior written permission. Website: fintrader.net Email: info@fintrader.net
  • www.winonmarkets.net1 You can make money in all market conditions up, down and even sidewaysWhile many areas of the media For example, Crude Oil wentreport the grim headlines, what up for around 5 years, but Principles for Projectthey forget to tell you is that then reversed nearly all the Management Successopportunities to make money games in 5 months in lateas a smart trader are all 2008.around you. Today, thanks to Financial marketsspread trading, you too can are like a see-saw;profit from markets, shares, if money flows outcurrencies and commodities to of one market, suchgo down (Short Sell) or to go as equity markets,up (Long Buy). You even trade then it flows intosideways (Barrier Range), another market,where you would bet for a such asmarket to stay in a trading commodities orrange, such as the FTSE 100 to bonds. A goodstay within a range of 5,800 to example of this was6,000 for the next 10 days. July 2011, whereThis can be done via a money flowed outbookmaker such as of stocks and intowww.betonmarkets.net US treasury Bonds. Many also have a direction- If the US dollar is weak, then al bias, such as always the Euro, Swiss or Australian wanting to be long or al- Dollar will be strong. Trading ways negative. A good is a zero sum game; you trader should be happy to always have a winner and a trade and profit from up or loser. down movements. I oftenR emember, shares and stop and reverse trades. So Also, don’t just think about for example, I may be Long markets fall faster your home market. Most UK Netflix (NFLX) and then than they rise. So you based traders only buy UK when the trade is closed, Ican make faster returns in a listed stocks. However, it’s a can then open a new shortfalling market than in a rising big world out there and it is as trade and profit from aone. easy for you to trade IBM, down move. Total SA, and China Telecom as
  • 12 Startcan make moneyup all market You small and build in conditions up, down and even sidewaysNo successful trader starts out in aNo successful trader starts out in Ibig way. For my own trading, astarted out with £2,000 of riskbig way. For my own trading, Icapital. Today I trade £100,000+started out with £2,000 of risk capi-per transaction without evental. Today I trade £100,000+ perblinking.transaction without even blinking.Thanks to small bet sizes and A Grain of Ricepractice accounts offered by some The daughter of the Chinese Emperor was ill, and he promised richesThanks to bookmakers and brokers,financial small bet sizes and prac- beyond compare to whoever could cure her. A young peasant named Pongtice accounts offered realsome fi- withyou can trade via a by system Lo entered the palace. With his wit and bravery, he restored the Princessnancial bookmakers the old paperno risk. This beats and brokers, health and won her heart. As a reward, Pong Lo asked for her hand inyou can game. via a real can starttrading trade Then you system marriage. The emperor refused and asked the peasant to think of anythingtrading with small stakes and buildwith no risk. This beats the old pa- else he would like.up. One of my secrets of success isper trading game. Then you canusing the power of compoundingstart trading with small stakes andprofits and trades. After several moments of thought, Pong Lo said, “I would like a grain ofbuild up. One of my secrets of suc- rice.” “A grain of rice! That’s nonsense! Ask me for fine silks, the grandestcess is using the power of com- room in the palace, a stable full of wild stallions - they shall be yours!”pounding profits and trades.try to carryMany new traders oftentoo big a position with too littlecapital, and trade too frequently for “A grain of rice will do” said Pong Lo “But if his Majesty insists, he maythe size of the account. I see new double the amount every day for a hundred days.”Many new traders often try to carrymosttraders wanting to trade in thetoo big a or “exciting”too little cap-volatile position with markets, whenital, and trade they should be tradingthe truth is, too frequently for the So on the first day, a grain of rice was delivered to Pong Lo. On the second,size of conservativeI slower movingmore the account. see new trad- 2 grains of rice were delivered, on the third day 4 grains, and on the fourthmarkets, especially when starting day 8 grains. On the fifth day 16 grains, on the sixth day 32 grains, on theers wanting to trade in the mostout. seventh day 64 grains, on the eighth day 128 grains.volatile or “exciting” markets, whenthe truth is, they should be tradingmore conservative slower moving By the twelfth day, the grains of rice numbered 2,048. By the twentieth daymarkets, especially when starting 524,288 grains were delivered. And by the thirtieth day 536,870,912 grainsout. - requiring 40 servants to carry them to Pong Lo. In desperation the Emperor did the only honourable thing he could do, and consented to the marriage. Out of consideration for the Emperor’s feelings, no rice was served at the wedding banquet! (Retold from a grain of Rice by Helena Pittman)
  • 31 Diversify You can make money in all market conditions up, down and even sidewaysThe advantage of trading with afinancial bookmaker, and nowNo successful trader starts out in awith the vast number of Exchangebig way. For my own trading, ITraded Funds (ETFs), is that itstarted out with £2,000 of risk capi-allows you to trade numeroustal. Today such as£100,000+ perproducts, I trade currencies, An example of betting on the FTSE Beverages Sectorcommodities, stocks and bonds, alltransaction without even blinking.from one account. Yet most With Financial Spread Trading, you can trade on majorcustomers stick to FTSE or DOW. sectors, both to go Long (buy) and to go Short (sell). You can also spread bet many Exchange Traded Funds, whichThanks to small bet sizes and prac- enable you to take a view on a certain sector such attice diversifying your bets, youfi-By accounts offered by some Nuclear Energy, Mining or Agriculture.nancial bookmakers andin non-reduce risk, especially brokers,you can trade via a For example,correlated markets. real systemwith S&P500, Dow, FTSE and pa-the no risk. This beats the old theDax are all major stock indices.per trading game. Then you canAs such, you can safely say if thestart trading with small stakes andS&P goes down, the others follow.build up. One of my secrets of suc-cess is using the power of com-However, if you traded one of thepounding profits and trades.above, and also Gold, Oil, Wheat or Here is an example of the Market Vectors Agribusiness ETF$/Swiss Franc, you would have a far (MOO)better balanced account.Many new traders often try to carry One trade gives you exposure to a basket of agribusiness stocks such as Deere, Monsanto, Potash Corp, Bunge andtoo big a position with strategy cap- IAnother successful too little that Syngenta.ital, and trade too sectors orfor thetrade is trading frequently SectorETFs. For example, you could betsize of the account. I see new trad-one sector to go down, such asers wanting to trade in the most The nine S&P500 sectors which can be traded via a spreadFinancials, and one sector to go up,volatile or “exciting” markets, when bet, traded options or bought via an online broker are:such as Consumer Staples.the truth is, they should be tradingmore conservative slower moving Consumer Discretionary Select Sector SPDR Fund - XLYmarkets, especially when starting Consumer Staples Select Sector SPDR Fund - XLPout. Energy Select Sector SPDR Fund - XLE Financial Select Sector SPDR Fund - XLF Health Care Select Sector SPDR Fund - XLV Industrial Select Sector SPDR Fund - XLI Materials Select Sector SPDR Fund - XLB Technology Select Sector SPDR Fund - XLK Utilities Select Sector SPDR Fund - XLU Its possible to be long on sector and short another, or you could be long the S&P500 and short the Financial Sector.
  • 41 You canyour personality and trading style Know make money in all market conditions up, down and even sidewaysWhile “day trading” and short-term I look at shares andNo successful trader starts out intruth isbets may sound exciting, the a markets as if they arethat my wealth has not come frombig way. For my own trading, Ishort terms bets. It has come from peoplestarted out with £2,000 of risk capi-trading trends over weeks, monthstal. Today I trade £100,000+ perand years.transaction without even blinking. Stocks often act like people. You haveWhile brokers and bookmakers like various personalitiesto generate more business from and a stock can changeThanks customers, sizeswinners in theactive to small bet the and prac- from one to another.tice accounts the least active traders.long run are offered by some fi-nancial bookmakers and brokers, Personalities can beyou can trade via a real system aggressive, steady plodders, hyper which normallyFor many readers that are morewith no risk. This beats the old pa- burn out and predictable.conservative and with a little greyper trading game. Then you canhair, you will not be suited to short Charts and a moving average can help you spot thestart trading with trading. As a trendterm in and out small stakes and personalities which you can trade. There is nothingbuild up.IOne of my secrets of screen alltrader, am not glued to a suc- wrong with hyper stocks but understand that you arecess and only the power of at the endday is using check prices com- playing with fire. Protect yourself with stops and beof the day; on some trades, I onlypounding profits and trades. ready to walk away when it all ends.check once a week.Many new traders often try to beingMany new traders confuse carry Most new traders overtrade without doing enoughtoo big awith making too little cap-“busy” position with money. In many research. Many do not understand how much risk orital, anda good trending stock the becases, trade too frequently for canleft to run. This can be far more exposure they have entered into. I remember onesize of the account. I see new trad-profitable than trying to second client opening up £10 a point on the Italian MIBers wanting to trade in the mostguess each twist and turn. thinking that was a small trade. At the time the MIBvolatile or “exciting” markets, when index was 43,500 and a move of 500 points a day wasthe truth is, they should be trading the norm.Do be careful with the online dealingmore conservative slower movingmarkets, especially new servicesand now with the when startingavailable on mobile phones andout.devices like the iPad. It can betempting to over check prices andoverreact to short term movements.Remember, millions of pounds havebeen invested in these new onlinedealing platforms. But for whosebenefit? www.winonmarkets.net
  • www.winonmarkets.net5 Money management is the key to survivalA good trader does not need to only need around 10% depositmake money that often. In fact, £150 in order to have 10 timesyou could get 80% of your bigger exposure with the sametrades wrong and still make investment.money. Let’s say you lose £100on 8 trades and you then make£500 on two trades. You are in Leverage is not a bad thing toprofit, even though your win to have, but you need to treat itlose ratio is terrible. with respect; many new traders go to the maximumHowever sure you are that the leverage limit they can have.market will crash or XYZ is However, it would be wiser togoing to soar, make your first use less leverage – you don’ttrade a small one, and then, if have to drive at the maximumyou are correct, add more to speed limit!that trade.Pyramiding a successful trade isthe key to making large “Trade up in good times and trade down in not so goodreturns. Never add to a losing times. It is important to add to winning trades. Fortrade! most of my trades I will start with a relatively small opening trade. I like to “test” my trades, for example, ifFinancial Spread Betting, CFDs I owned a shop I would not buy thousands of books, Iand Futures are leveraged would buy a few, see if they sell and if they do then Iproducts. Therefore, a relatively would buy some more. In trading I could buy a smallsmall movement can be position, if its looking good and starts moving my waymagnified. This is great when it I can add to it.”goes your way, but not thatnice when it does not. However “smart” we think we are in trading and investing we are dealing with unknowns, what isFor example, if you bought known and what we can control is how much we1000 shares of Vodafone at decide to risk on each trade, and that is what you£1.50, that would be an should be spending more time on.investment of £1500. With a Vince Stanzionespread bet, you could bet £10 apoint (the same as 1000shares). However, you would
  • www.winonmarkets.net6 Cut your losses and let winners run – Spend more time planning your EXITEveryone tells you this, but few Another good tip is to trailcan do it. Trading comes down stops, which is to lock in someto psychology; everyone wants profits but keep the tradeto win and no one likes to be running. Once a trade moveswrong, or be classed as a loser. into profit, youMost unsuccessful traders take could move theprofits quickly, yet they will let stop loss tolosing trades run and run in the your entryhope that things will get better. point. ThisWhen I was a broker, I would means that thesee this all the time. Clients worse casewanted to get out of winning scenario is atrades and found it easy to break-evenclose these out, but getting trade.them to close losing trades wasnear impossible. A price channel or “Donchian Channel” canThe table shows what you have easily be added to a priceto make back to recover your chart. In this example, welosses. see a 20 day high and Drawdown and Drawdown low channel; as the price RecoveryWhat I suggest is that you have moves up, so does thea mechanical approach to exits % Loss of Capital % Profit to channel. Think of the Recoverand entries. That is, you have a channel as a safety netget out point set on opening a 10% 11.11% which allows you to locktrade. I cover this in full in my in profits. 20% 25.00%course Making Money From 30% 42.85%Financial Spread Trading. Most new traders spend too much time planning 40% 66.66%Financial Bookmakers offer a when to get in and buy, 50% 100%guaranteed stop loss on most when in fact, they should 60% 150%products. This means that you spend much more timecan place a bet knowing that 70% 233% on the exit strategy andthe most you can lose is known, how much they are going 80% 400%say £200. Yet your profit could to trade. In my course I 90% 900%be unlimited. explain how to get in and 100% You are Broke out.
  • www.winonmarkets.net7 Treat Financial Spread Trading and investing as a businessIf you want to make real Many have openedmoney, you need to treat this financial spread bettingas a business and work to a accounts as an escapeprofessional standard. Keep from there “boring “ dayrecords of your trades, invest time jobs and are reallytime and money to learn to gambling with no systemtrade, and continue to update or plan.your skills. It is a never-endinglearning process.You should not be trading forfun, excitement or to impressyour friends. You are inbusiness to make money!8 Don’t get carried away by technologyIt’s easy to get blown away by all the great software, on-linetrading, real time data, charts, iPad apps, business channelsand bells and whistles.The truth is, less is more, and information overload makes youa worse trader. The more complicated your system, the lesschance it will work or that you will follow it.The majority of technical trading indicators are a total wasteof time, and you do not need to waste money on expensivetrading software that claims to predict markets. The mostimportant factor when trading any market is the price.If the price goes to 50, 51, 55, 60, it is going up; it doesn’tmatter what the indicator or news says or what you thinkshould be happening. The price tells you the truth and shouldalways be obeyed.Trade with what you see not what you think. Yes, XYZ couldbe overvalued and at some stage you may be right, but theold saying “Markets can remain irrational a lot longer than youcan remain solvent” is very true.
  • www.winonmarkets.net9 The crowd and media are normally wrongSome of the best times to buy magazines can be goodare when the crowd is terrified contra indicators.and there is blood on thestreets. This was a front cover published the end of MayMarkets go down because of 2008 – with Oil at $135 -lack of buyers, not because of by the end of the samesellers. For a bull market to year Oil was at $36continue, you need new moneyto keep the party going, similarto a Ponzi or pyramid scheme.If everyone is bullish on themarket, then it has no otherway to go but down, aseveryone that wanted to buyhas already done so. A classicexample of this was theNASDAQ in March 2000.On the reverse, I have made avery good profit from theTobacco sector over the lastdecade. Tobacco companies Many traders don’t realise thewere despised by Wall Street news they hear and read has,back in 2000 -2002. Since then, in many cases, already beenmany companies such as BAT discounted by the market.are up over 600%, and that’s Often, new traders jump into anot including the dividends. market based on a story in the morning paper or on a businessIn my course, I reveal the channel; the market manysentiment indicators that I use times has already discountedand how to know what the the information.crowd is doing. Be aware thatstock market crashes do notstart when everyone expectsthem. Front covers of business
  • www.winonmarkets.net10 Don’t feel you have to trade all the time – Don’t mistake goodluck with skillOnly gamblers bet on markets bigger returns for doing nothing.every single day. Sometimes Don’t dig up your healthy plants and keep your weeds!Ithe best trades are the onesyou do not make. Trading canbecome addictive, both for Just Wait Until There Is Money Lying Onlosing traders who want to get The Cornereven, and winning traders whoare now on a roll and want to “I just wait until there is money lying on the corner,take over the world in 5 days! and all I have to do is go over there and pick it up. I do nothing in the meantime. Even people who lose moneyAfter a few profitable trades, in the market say, "I just lost my money, now I havesome traders become wild and to do something to make it back." No you don`t. Youun-conservative. They base should sit there until you find something.”their trades on hunches andlong shots, rather than sound Jim Rogers— Market Wizardsfundamental and technicalreasoning, or they put theirmoney into one deal that “can’tfail”. “There is nothing new on Wall Street or inMarkets have been here for stock speculation. What has happened inyears and they will be here formany more to come. As already the past will happen again, and again, andstated, the best trades are again. This is because human nature doestrend trends where a trade is not change, and it is human emotion,entered long or short and is left solidly built into human nature, that alwaysto run with the trend. gets in the way of human intelligence. OfDon’t make new trades or mess this I am sure. ”with an open winning trade just Jesse Livermorebecause you’re bored or wantsomething new. I have seenmany sell shares like Apple andARM Holdings with small profitsas they become bored. Hadthey just stayed with them,they would have made far
  • www.winonmarkets.netWant to take yourTrading Investing tothe next level?Whether you’re a complete be-ginner or you trade the finan-cial markets already, I’m cer-tain I can help you make moremoney and give you an unfairadvantage, regardless of mar-ket conditions, which productyour trading, and where you’rebased.Vince Stanzione has pro-duced a home study courseto teach private investorshow to benefit from tradingfinancial Spread Bets andFixed Odds priced at £197.For more information pleasevisitwww.winonmarkets.net U.K. Government Required Disclaimer – You are reminded that the price of shares and the dividends thereon can go down as well as up. None of the following contents should be construed as an invitation to buy or sell securities or open spread betting positions, shares or any other financial trading product. Vince Stanzione, First Information, Making Money From Financial Spread Trading programme is purely educational and is therefore not regulated by the Financial Services Authority (FSA). Futures, CFD, Margined Foreign Exchange trading, Warrants, Options and Spread Betting carries a high level of risk to your capital. A key risk of leveraged trading is that if a position moves against you, the customer, you can incur additional liabilities far in excess of your initial margin deposit. Only speculate with money you can afford to lose. Futures, CFD, Margined Foreign Exchange trading and Spread Betting may not be suitable for all customers, therefore ensure you fully understand the risks involved and seek independent financial advice if necessary. Past performance is not necessarily a guide to future performance. Any securities or financial products discussed are by way of example only and are not an invitation to buy or sell. Vince Stanzione, First Information and his agents may have a holding or open position on some of the financial markets discussed in this document. U.S. Government Required Disclaimer - Commodity Futures Trading Commission. Futures and options trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Dont trade with money you cant afford to lose. This website is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this website. The past performance of any trading system or methodology is not necessarily indicative of future results.