Spread Betting Tip: Don’t Get Married!

Millionaire Trader Vince Stanzione says that you should never get married to your position if you want to be a successful trader. A good trader should be happy to go long or short the same market or stock. Also sticking to the same share or market just because it’s been good to you in the past is not the way to profit. Many get stuck in to a losing trade “hoping” it will get better when the best option is cut and start again.

Also whilst just staying with one or two markets may sound good practice I have found it’s better to play the field and have plenty of options open to you. If you decide to trade just the Euro/$ or just the S&P500 there will be times when those markets are just not offering great trading opportunities but you can bet that other markets will be offering better risk/reward trades. My system teaches how to trade Currencies, commodities, world-wide stocks, Indices and Bonds giving you the most ways to profit.
to find out more go to www.winonmarkets.net

Tips from Vince Stanzione Spread Betting – CFDs – New Video

Here is a new video with some tips from millionaire trader Vince Stanzione. This is the first of a new series which will appear in the coming weeks so stay tuned. to sign up now just go to

http://www.winonmarkets.net

Even up the odds – What Investment

It would be difficult to deny that, here in the UK, we enjoy a flutter. Betting on horses, dogs, football and other major sporting events has been a long-standing hobby for generations. And, while it can be argued that the financial markets have always been a gamblers paradise, over the past 30 years they have become an attractive marketplace for speculation.

The idea of using spread betting techniques to gain exposure to the stock market, without having to take on the full risks of doing so, has for some time been growing in popularity. Financial spread betting dates back to 1974 when the IG Index was created to enable investors to trade the price of gold without incurring hefty premiums through the exchange controls applied if the actual metal itself was bought.

When it first hit the UK, financial spread betting was popular among institutional investors, city traders and high-rollers, but the process is now beginning to reach more widely and is used effectively even by smaller investors, particularly as a hedging
tool to profit from falling markets.

Tony Celentano, head of sales and business development at E*Trade, points out that ‘A wide range of investors will use spread betting for hedging purposes. If they have,
for example, a basket of FTSE 100 stocks or equities, spread betting can be a very cost-effective way of hedging that portfolio because there are no commission charges
and also very low set-up fees.’

Comparing like with like

When it comes to the actual mechanics of spread betting, the easiest way to explain it is by making a contrast with traditional betting. For example, if you place a £10 bet on a horse at 6-1 and your prediction proves correct (the horse wins), you would then win your original stake multiplied by the odds (£70). However, if your horse loses, then you forfeit your original £10 bet.

Spread betting is different in that you do not actually have to predict the exact result and the odds are not fixed. However, it can unfortunately result in very large losses, so it is essential that those who are new to spread betting do their homework
and start small, betting only with money that they can afford to lose.

‘Investors who choose to go down the spread-betting route must be very disciplined’, adds Celentano. ‘After all, it is a leveraged product. On going into any trade, all investors should always be working to a strategy. This could be based on pricing, fundamentals or risk exposure. Investors must also have their entry and exit levels in mind.’

Financial spread betting works primarily by predicting how financial market indices will react on a given day. For example, say you want to bet on the FTSE 100, which
is currently trading at 6,150. You are given a spread of 6,140 to 6,151 by a market-maker.

If you believe that the FTSE 100 will rise higher than 6,151, you then place an ‘up’ or ‘buy’ bet, placing a certain amount per point. Let us say you bet £10. If you are correct and the FTSE 100 rises to 6,225, you would make £740 (6225 minus 6151 = 74 points). However, if you were wrong and the FTSE 100 actually fell to 6,100, you would then have lost £510.

Strategic investing
When looking at the pros and cons of spread betting, investors tend to compare it with investing in shares, often coming to the conclusion that the latter is more ethically acceptable simply because spread betting has ‘down-market’ connotations.

Investors buy shares in a company because they believe that the price will rise over a period of time, resulting in them making a profit – hopefully a large one. What some fail to realise, however, is that spread betting is formed of exactly the same strategy, with the main difference being the reduced cost of trading shares as opposed to buying them.

But the main advantage of trading is the tax benefits. Because spread betting falls within the UK’s gaming laws, the ‘winnings’ are exempt from capital gains tax (CGT) and investors also benefit from not having to pay the 0.5 per cent stamp duty that they would otherwise have to pay with share transactions.

James Daly, investor centre representative at TD Waterhouse says, ‘Spread betting is a far more cost-effective option than buying shares. Making money, particularly in the present climate is hard enough.’

Margin trading
Another advantage, which also applies to contracts for difference (CFDs, see page 16), is the ability for investors to trade on margin – a particularly useful tool for those
who have limited capital. This basically means that by trading shares you have the potential of far greater returns, and, of course, far greater losses, than if you were to instead buy shares.

Spread betting firms allow you to place a bet with a deposit that is known as the initial margin. The exact size of this margin depends on the type of asset you have chosen
to bet on, but it usually works out at around ten per cent.

Daly explains, ‘This process is very similar to buying a house using a mortgage loan. In the worst-case scenario, your investment could go down to zero, but the whole mortgage would still be outstanding, not just the deposit that you originally put down when buying the house.’

He adds, ‘If you are trading BP shares at £3 per point, in terms of exposure, that would be the equivalent of buying 300 shares of BP. Normally that deal, not including any extra charges, would cost you £1,800. As a trader, in order to take out that position, you would only have to put down five or ten per cent of that. If you put down £180, the shares would only have to go down by 60p for you to lose your initial deposit or more. Similarly they could rise and you would make a profit.’

Limiting losses
Many people are put off spread betting because of the large potential losses. However, there are ways to become an active spread better without any of the sleepless nights.

James Parker, head of spread betting at ODL Securities, says, ‘An investor can place a guaranteed stop-loss on their trade so that if the market goes against them, they would have no further exposure beyond that particular level. About 70 per cent of our traders use a guaranteed stop loss.’

Trading veteran Vince Stanzione points out that a good trader does not necessarily need to make money every single time. ‘You could get 80 per cent of your trades wrong and still make money. Let’s say you lose £100 on eight trades and then make £500
on two trades, you are still in profit. However sure you are that the market will crash or XYZ is going to soar, make your first trade a small one, and then, if you are correct, add more to that trade.’

Spread betting can be a very addictive form of investing, both for losing traders who want to get even and winning traders that are on a roll, so it is important that, from the outset, investors know when to cut their losses.

‘Trading comes down to psychology: everyone wants to win and nobody likes to be wrong. Most unsuccessful traders take profits quickly while letting losing trades run and run hoping things will improve. Traders can spend too much time planning, when in fact they should spend much more time on the exit strategy and how much they are going to trade,’ says Stanzione.

Following the trend
In volatile markets, such as we are currently experiencing, prices can vary widely on a daily basis, an unnerving prospect for many ordinary share investors. But spread betting thrives in this environment and the more the markets move, the more money
can be made. According to Parker, ‘Spread betters look for quite sudden, sharp movements and we are seeing that in markets at the moment.’

The recent market turmoil has seen many trends come and go, with gold being one commodity that has dominated many a headline. Spread betting is a very diverse investment strategy, and Stanzione believes that the best trades are trends where a
trade is entered long or short and is left to run with the trend.

He enthuses, ‘Some of the best times to buy are when the crowd is terrified and there is blood on the streets. Markets go down because of lack of buyers. For a bull market to continue you need new money to keep the party going. If everyone is bullish on the market, then it has no other way to go but down as everyone that wanted to buy has already done so.’

There is another way…
The possibilities facing the spread better are vast, and the newest addition to this form of investing is binary betting. This is similar to a fixed-odds bet, but where odds are quoted on a scale between zero and 100 rather than in a fraction such as 2-1.

Let us take the FTSE again as an example. You have noticed that the FTSE has fallen, but think it may rise later in the day. The binary price for the FTSE to rise before the markets close is trading at 33 to 48. If you think that the FTSE will finish up at the end of the day, then you buy at 48 for a certain amount per point, let’s say £10. Conversely, if you think that it will finish down then sell at 38.

Your profits are calculated by taking the closing price minus the opening price multiplied by the size of your bet per point. In the instance that you placed a £10 per point bet on the FTSE rising before close – if you were correct then you would win £520 (100 minus 43 multiplied by £10 = £520). However, if the FTSE finished down then your losses would be £480.

Arguably, one of the key advantages to using binary betting over established forms of spread betting is that it gives you the opportunity to take advantage of non-volatile markets, as well as those that are frequently rising and falling.

With spread betting, your potential profits can be restricted if there is a lack of movement in the underlying market. By diversifying your trading strategies and opting for binary betting during these quiet periods, you could add to your winnings.

Advantages of Financial Spread Betting

Financial Spread Betting has been available for over 30 years however in the last 10 years its popularity has really exploded. Tens of thousands of retail investors everywhere from the UK and Europe, to Australia and South Africa trade shares, currencies, bonds and commodities on the financial stock markets daily. Here are some of the reasons why it has become so popular.

Tax Free in UK

Unlike traditional share dealing, you pay no taxes on your profits. They are not considered profits under tax laws, but a winning bet, and as such Capital Gains Tax does not apply. The transactions also involve no stamp duty, as the underlying share or commodity is never actually purchased – it’s just a bet on whether or not the value will rise or fall.

No fees or commission

Spread-betting companies don’t charge commissions or brokerage fees. They include all costs in their spread. The last few years competition has become fierce with spread as low as 1 point.

Profit from rising or falling markets

One of the biggest advantages of spread betting is that it doesn’t matter in which direction the market is going – you can still make money. A profit can be made in a falling market as well as in a rising one. Also with fixed odds bets you can also profit from a range or dull market effectively betting on a market to do nothing.

Trade on Margin

Spread betting is leveraged, which means you only need to bet a small percentage of the value of your trades.  You can make the bet using a fraction of the money it would require if you wanted to buy the actual shares from a stockbroker. This is also known as gearing.  You can also choose the size of your stake, often much smaller than would be the case if you were speculating on the underlying market.

Wide Range of Markets

You can access thousands of markets from one account stock Indices, currencies, bonds commodities, shares or even, in some cases, house prices. Most Financial Bookmakers allow you to trade directly from a website without the need to download any additional software.

24 hour access

Some spread betting companies are open 24 hours a day from Sunday night to Friday night. This allows trading in hours even when underlying markets are closed. Dealing can be done online or by phone. You can now also trade with your mobile phone or smartphone including apps that are available for the Iphone, Ipad and Blackberry devices, so you can trade whenever or wherever is convenient for you.

Control your losses

You can set limits on the losses you are prepared to take. These are known as Stop Losses, or Limit Orders. They offer protection against massive losses if the market moves against you. Also most Financial Bookmakers offer Controlled Risk Bets (CRBs) meaning that even if a stop cannot be filled in the underlying market you would still be protected.

Hedging

Spread-betting can be used as a hedging tool to offset against losses in your other portfolio. For example, if you own shares which are decreasing in value in the short term, you can bet on the value falling, and make a profit to offset against the loss in value of the shares you hold. Many investors use spread-betting to hedge against losses. Another popular hedge is Gold, say you had some Gold coins and your worried that Gold will fall but do not want to sell their coins you could spread bet gold to go down which would protect you.

 

Regulated Industry

The spread betting industry is tightly regulated. In the UK, this is by the Financial Services Authority (FSA). It means strict rules apply and the firms offering it are secure and safe.

Don’t jump into Financial Spread Betting Blind

Before you try Financial Spread Betting it’s well worth getting some good advice and training.  Spread Betting Veteran Vince Stanzione has been trading for over 25 years and has produced a course “Making Money From Financial Spread Trading” which is a 160 page workbook, 2 and half hours of DVDs and a members only website. To find out more go to www.fintrader.net

 

Exchange Traded Funds and Financial Spread Betting

Exchange Traded Funds and Financial Spread Betting

Combining Financial Spread Betting with ETFs can give you a way to get exposure to an ever growing range of sectors, commodities, global financial indices which you can profit from regardless of markets moving up or down. An as an added bonus UK taxpayers can make tax free gains.

www.winonmarkets.net

Exchange traded funds, or ETFs, have been around since 1993. ETFs are index tracking funds which can be traded on a stock exchange, just like a share.
A typical ETF might seek to mirror the performance of an index like the S&P 500 or the FTSE 100, or perhaps a single sector such as the S&P Energy Sector (XLE) or commodity price such as Gold (GLD).

ETFs have been growing in popularity with investors both large and small, partly because they can be easily traded, just like any other listed security, and partly because they are much cheaper in terms of the fees they charge compared with conventional mutual funds or unit trusts.

So why would you place a financial spread bet on a ETFs? Surely, if you are convinced of the merits of ETFs, it would be easy just to buy and sell the physical ETF rather than opening a spread betting or contracts for difference (CFD) account to trade them?

ETFs are offered as spread bets for a number of reasons, many of which really boil down to the advantages of financial spread betting. For starters, when opening a spread betting account, you gain the advantage of trading on margin: your spread betting company will loan you the majority of the value of the trade, while you only need to deposit a relatively small percentage as your margin. This is something you could not do with a physical trade on an ETF. It also means you are effectively trading a larger amount of shares in that ETF than you would ordinarily be able to do, and if you are right, and the ETF’s price goes up, you get to keep all the profit from the trade. Of course, if you are wrong, the losses could be proportionately great, so caution should be used when trading these products.

ETFs are easily available via a conventional stock broking or share dealing account. But like trading physical shares, if you trade physical ETFs, you are liable to a commission fee every time you trade. In addition, you may also have to pay custody fees. With financial spread betting or CFD trading, you don’t face the drag these costs can pose to your trading account. Plus, you are able to trade other assets, like currencies or commodities, using the same account – not something that is usually possible with a share dealing account.

Financial spread betting also lets you short an ETF. This means you can potentially profit if the price of that ETF falls, by using the bid or sell price. This is much harder to do in the physical market. Yes, some providers do list inverse ETFs, that is, funds which move in the opposite direction to the index. But these are generally only available for the more high profile indexes, like the S&P 500 for example. It is much easier to short an ETF using a financial spread betting or CFD account.
Finally, you may own the physical ETF and may want to hedge your risk by buying a bit of insurance against the possibility that ETF may fall in value. You can do this using a spread betting account by opening a short trade. You must make sure you have a stop loss in place (an automatic order that will close the trade at a pre-arranged price if it moves against you), because otherwise your hedge order will eat into any profits you are making in the physical market. This can be a good tool to protect yourself against sudden market moves.

The universe of ETFs is expanding all the time as they increase in popularity. There is already a significant number of ETFs available for spread betting. These include many of the major commodities markets, where there are ETFs tracking the likes of gold, crude oil, cotton, corn, natural gas and sugar. ETFs tracking a basket of commodities (also known as Exchange Traded Commodities), like agricultural commodities or base metals, are also available to trade.

ETFs are a good way to access sector-specific indexes, for example covering financial services, utilities, real estate or oil services. They can also be used to trade some emerging markets stock markets, like Brazil, China, Russia, or even Taiwan.
ETFs are able to replicate an index through a variety of means. They are not always suitable for holding in a portfolio over the long term horizon. This is because they are subject to something called tracking error, where the very activity of buying and selling shares or derivatives to replicate the index the ETF is trying to track, as well as charging fees, means the ETF does start to deviate from the index over time. Tracking error will vary from ETF to ETF, and from market to market. This is more of a problem for those using ETFs to hold as part of a long term investment strategy, but they are ideal for financial spread betting, particularly if you measure the life of a trade in days or weeks.
Remember, with financial spread betting and CFD accounts, you do not own the ETF: you are simply seeking to profit from changes in the price of that ETF.
To learn more about Financial Spread Betting and Vince Stanzione please go to www.fintrader.net

How To Make Big Profits Trading Financial Markets in less than 15 minutes a day

Maximum Trading Profits in Minimum Time
How To Make Big Profits Trading Financial Markets in less than 15 minutes a day

Most think that to make money from financial markets you need to be glued to a computer all day checking every price movement and news story – Well that may be true for others but for me and those following my trading system we spend no more than 15 to 20 minutes per day. My studies have shown that longer you spend watching prices the less you make.

Our aim is not to profit from every little turn, that’s a loser’s game played by those with big egos and too much time on their hands trying to call tops and bottoms. We make our money from the main trends and they can last weeks, months and even years. Take Apple Computer (APPL) I have now been in that long term trend since March 2009 and showing a 250% profit and still running. I have also been able to take profits along the way and compound those returns; I explain how that is done in my course.

Apple Up trend Vince Stanzione makes over 250% since March 2009

Another trade I have had open since the same time is Chinese Internet company Baidu (BIDU) which is up over 550%. Good trends can keep going. We can also make money from down trends as well.

BIDU Up trend Vince Stanzione makes over 550%

The majority don’t make money in financial markets and that includes the so called professionals that cannot beat an index fund yet they charge you high fees.

So if you do what the majority do then you’re going to get the same results which will be poor. You have to think and act differently to most traders.
To learn more about how to make Maximum Trading Profits in Minimum Time go to www.winonmarkets.net

Financial Spread Betting Explained

Vince Stanzione explains what spread betting is in plain English.

Financial Spread betting also known as Financial Spread Trading is a way that traders can back shares, currencies, commodities, bonds and many other financial markets in many cases with relatively small stakes. Markets can be traded from one account both online, by phone and now on many mobile devices such as the Iphone.

In the UK it is tax free and offers the opportunity to make a profit whether the market goes up or down. It offers access to a wide range of markets from Indices (like the FTSE 100), 1000’s of individual shares, commodities and currency exchange rates.

A financial Bet: Unlike traditional share-dealing, you never own the actual share or commodity. You are simply making a bet on whether you think it will go up or down in value. You stake a certain amount of money per point movement – the more it moves in your favour the more money you make, the more it moves against your prediction, the more you lose. The good news is that your risk can be strictly limited using a guaranteed stop loss. So if you stake £1 a point with 100 point stop, your maximum risk is £100.

The Spread: The spread is the difference between the price you can buy at and the price you can sell at. You will buy at the higher price if you think the market will rise (Go Long or Up Bet), or sell at the lower price if you think the market will fall (Go Short or Down Bet). The tighter the spread, the smaller the market has to move for you to make a profit. No commission or funding costs are charged in spread betting the costs are all built in to the spread.

What can I Spread Bet on?

Individual Shares – Shares in individual companies from almost any market in the world including UK, US, Europe, Australia, Hong Kong and Singapore to name a few.

Stock market indices – Popular indices are the FTSE 100 and Dow Jones, but other indices such as the Nikkei 225, Eurostoxx 50, NASDAQ, S&P 500 or DAX can also be traded.

Commodities –  The last few years has seen a surge in trading on commodities such as  Crude Oil, Natural Gas, Gold, Silver, Copper, Palladium, Wheat, Cotton, Coffee Cattle, Soybeans and of course those famous Pork Bellies.

Currencies – Another hot area especially for shorter term traders is the Foreign Exchange market  (Forex or FX).  Popular currency pairs include EUR/USD, USD/JPY, GBP/USD, GBP/EUR, EUR/JPY and many more.

Interest rates and Bonds – Short term or long term interest rates, Government Bonds or gilts.

How does a Spread Bet work?

First, you select your market – Let’s take an individual share e.g. McDonalds.

Start by checking the price quoted by the spread betting company – it will reflect the actual share price.  There will always be two figures – the sell price and the buy price, the sell price will be lower. For example, it could be 7450-7460. The 10 points difference is the spread.

You must decide if you think the price of McDonalds shares will go up higher than the buy price, or fall lower than the sell price. If you think higher, you “buy” at the buy price, if you think lower you “sell” at the sell price.

Now, you must decide how much you are betting, that is, what your stake is – this is the amount of money you gain or lose per point of movement on the value of the share. It is always expressed in currency per point of movement e.g. £1 per point.

In spread betting you do not have to pay the full cost of what the share would be to buy – You will only have to pay a percentage – this is called trading on margin. But spread betting companies will require you to have a certain amount on deposit to cover potential losses (exactly how much varies from company to company and this figure is often called the Initial Margin Requirement).

You can close a trade at any time (as long as the underlying market is open) whether you are making a profit or a loss. You do not have to meet any specific value on any specific date.

A Spread Bet Example

So let’s consider our McDonalds example, it’s currently January and quotes are being made on June 2011 contracts – your spread betting company currently has a quote of 7450-7460. Two weeks later the share price increased in value to a quote of 7600-7610.

Example 1: Going Long

So you buy £5 a point of McDonalds at 7460 as you think the price will rise.

The price moves to 7600-7610.

You take your profit and sell at 7600.

Profit = (7600-7460) x 5.

Your profit is £700.

Example 2: Going Short

So you sell £5 a point of McDonalds at 7450 as you think the price will fall.

The price moves to 7480-7490 and you decide to get out

You cut your losses and buy at 7490

Loss = (7450-7490) x 5.

Your loss is £200.

In my course Making Money from Financial Trading I explain more and the exact system I use to buy and sell. For more details go to www.thefintrader.net

Hot Commodities – How to make big money from Cotton, Rice, Cocoa and more…

Whilst many have been looking at the Stockmarket or FX the true action so far this year has been in commodities such as Pork Bellies, Cocoa, Rice and Cotton. The chart below shows some of the return made and that’s just one month in January 2011.

You to could be making money from trading commodities and profit from both up and down moves, to find out more just go to www.winonmarkets.net/2011

Top Commodities so far in 2011

Learn to Trend Trade – 15 minutes a day

Trend following is ideal for end of day or end of week trading. No need for real time data or expensive software.
Trend trading allows you to profit from markets going UP or DOWN.

Make Money in Up and Down Markets

You can start trend trading with a small starting bank and a spread trading account
You don’t need to know much if anything about the fundamentals of the market.
Trend following makes the markets simple and easy to understand. Don’t reject a solution because it seems too simple.
Don’t confuse simple with easy or risk free. While the system is simple, humans find it hard to follow rules.
Trend following works on any freely traded market worldwide – including currencies, commodities, bonds and shares.
Trend trading has made me a multi millionaire to learn more see www.winonamarkets.net