100 Trades Into My Spreadbetting Career – How Am I Doing?

I’ve had a couple of bad days lately and have managed to dwindle my account balance even further. At this juncture, it makes absolute perfect sense to take a look back over my August trades (99 completed and 3 open) to see what went wrong. How many did I win, how many did I lose?

As you know, I started my trading with a clean slate at the beginning of August with a £500 trading balance. It’s important to state here that this was money I could afford to ‘lose’. In other words, I wasn’t using my mortgage money or anything like that. My wife would definitely kill me if I did that.

Before I go into how my august trades worked out for me, it’s also useful to give you a brief bit of background info so you have a much clearer idea of my trading experience.

I have been interested in the markets since at least my teens. I bought a few books back then and requested a few free annual reports but I didn’t have any money to trade. I needed a job for that but that’s another story. I always maintained my interest though and every now and then, I’d read the business pages and fantasise about which stocks I’d buy if I were loaded. I wasn’t, so I couldn’t.

Anyway, fast forward 10 years or so to 2007 (age 25!) where things began to settle down a bit.  I started to dream about what I’d do when I’d paid off my mortgage and debts etc. etc. and I decided to open a fantasy trading account with Bull Bearings. The fascination with trading had always been there and now that I was putting some thought into my financial future, it was always going to come up.

In the years since I opened my fantasy trading account, I’ve managed to lose £70,000 of my £100,000 startup play money. I’ve never traded continuously actively on here and could summarise my involvement as having periods of a couple of months of activity followed by a dip in interest, only to come back and try again a few months later. It did act as sort of an education though but I guess it’s not the same when you’re not actually playing with your own money.

A couple of years pas by with no trading activity – sell a business, get married, have a baby.

In rolls 2012 and things are going pretty well at home. Professionally, I’m running my own marketing services company and I have a little bit of cash spare at the end of each month. Obviously, with interest rates being so low on savings accounts, I wanted to maximise my return wherever I could and this led me to start learning about spread betting (and investing in general).

In March, I opened an account with IG Index and deposited £50.00. In the beginning, when you first open an account with IG Index, they let you start with 10p, 20p and 50p trades.

I tried it for a month (some of my early experiments are on this site) and by the end of March, I’d placed about 100 trades and lost all of my £50.

I stepped away from it then, thinking that I couldn’t do it (or didn’t want to lose any more money), until I made the decision to try it again properly at the beginning of this month.

100 Trades In – August 2012

In August so far, I’ve placed 101 trades. 98 have been completed and there are currently 3 open.

In accordance with money management principles, I’ve kept a record of all of my trades (IG Index also let you download your trading history as a spreadsheet) and have tallied up my success rates.

Completed Trades: 99 | Wins: 44 | Losses: 54

Success Rate: 44.4%

Total Profit/Loss: -£190

These are actually great statistics for analysis that I hope will allow me to trade more profitably in September.

For example, if I risk 10% of my account balance on each trade (which I didn’t do in August) – that’s £50 out of a £500 account.

With a £500 account, assuming stops are kept on each losing trade, that’d give me a possible 10 trades at the very least.

From these statistics (obviously I’ll keep measuring these as I progress to tweak my strategy for the following month) I’d lose 5 trades and win 4 with 1 unknown. I’ll assume I lose in the unknown trade.

If I risk (and lose) £50 in each losing trade and win atleast £100 in each winning trade, at the end of the month, I should actually show a profit.

6 x £50 losing trades = £300

4 x £100 winning trades = £400

Total Account Balance at Month End: £600 (+20%)

Compounding a Possibility?

If I could maintain this kind or performance track record on a monthly basis and keep my 10% risk on each trade, I could be looking at a compounding 20% return each month. For example, £500, £600, £720, £864, £1037 etc.

Does this sound too easy? Is this too outrageous a plan?

never miss another post! subscribe now
Subscribe to my private mailing list to get access to all of my latest posts, personal insights and my entire trade history that are all just too awesome to be made public on my blog!

Leave a Reply

Your email address will not be published. Required fields are marked *