Today is February 29th 2012 and I’ve opened a spread betting account with IG Index.
I’ve deposited just £50.00 and am only trading 10p per point. I want to get a taste of how this all works before I commit any more of my money here.
I’m pretty excited by how easy it’s been to set up the account and get started.
I’ll stick the disclaimer in here that although this is my first trade, I’ve always been interested in the markets and have had a fantasy trading account at Bull Bearings since 2007.
Of course, my portfolio is down £70,000 since I started 😉
In my fantasy trade account I’d been holding shares in William Hill and Banco Santander – both currently down but I have faith that they will rise in the coming months.
So, naturally, the first thing I did was ‘go long’ on these two stocks at 10p per point…by the time the ‘spread’ was taken into account, my positions opened up 40p down each. Thrilled with excitement, I watched my IG Index trading screen and waited with baited breath for the money to start rolling in.
The point went up or down a point here, a point there, but after about an hour, my positions were down a little to 60/70p but nothing else had really happened. Whilst waiting for something to happen, I started browsing the other markets available to spread bet on and came across the commodities…aha!
Oil and Gold, in this time of financial crisis, that’s where the money is. The pips on my screen showed you these ‘popular’ markets and there was non stop trading on them. They would definitely make me money.
Without a second thought I opened up positions on Spot Gold and Brent Crude. Gold was going down (ECB had just given out 500bn Euros to the banks to stabalise them as part of the LTRO plan so this surely should make gold less of a desirable investment and reduce price?)….and oil, well, chaos in the middle east and the situation in Iran must push Oil prices up, plus it costs me loads at the petrol pump and only ever goes up so got to be a winner!
Within minutes I was holding positions in these two commodities that were down over £1 each! And they kept going down…in the space of 5 minutes I’d lost about £4 on oil and gold.
Time to take stock…(no pun intended)
As the money kept slipping away I decided to close the positions (I’d read about stop losses and setting yourself a target to lose no more than X %). My positions passed these stops in my head and I quickly closed them. OK, next time I’ll be absolutely sure before taking up poisitions.
Seen as though everything seemed to be going down last time, I opened short positions and watched with excitement as I started making a profit 20p, 30p, 50p…back down to 20p, 40p…wow, this was great. I watched and watched as things went up towards £1 and then got extremely nervous about the price. Quick, I cashed out and closed positions…I was up – I’ve got the hang of it now. Next time, £1 a point.
I opened up new positions as the trend continued downwards but this time, at £1 a point, instead of 10p. Within minutes I’d lost £5 as the price turned and started rising again. Quickly I closed the position as my mental stop loss had been passed once more.
Clearly, this wasn’t the way to go.
And yet that’s how it went for the remainder of the day. A few times I got lucky and made £3 or £4 per trade, but ultimately, after putting in my £50 starting money, I was left with £25.
I’d lost half my money chasing trends on things I didn’t know anything about whilst my original positions in William Hill and Banco Santander lost a little, but still gave me hope they would rise – but I was starting to realise this was going to take longer than I thought.
What Did I Learn from My First Days’ Trading?
- Don’t be stupid chasing the quick fix.
- Actually learn how to spread bet.
- Have a better plan than that bullshit you just pulled.
How can I do all of this?
…I’m going to have to find something to read.
I came across the MoneyWeek website and this seemed to be a good starting point.