I have been trading futures, options and equities for many years. As well as trading my own money I have traded money for banks and I have been a broker for private clients. Over the years I have been fascinated to discover the difference between winners and losers in this business.
Try to learn from the points I am about to give you.
1. To maximise profits, Direct Market Access (DMA) and Level 2 are essential. This allows me to see the strength of the order book and place an order either inside the spread or join the queue outside the spread. Over time this has a huge bearing on trading efficiency.
2. The broker I use allows me to go straight to the market and does not charge a commission. There is no stamp duty and of course no income tax or capital gains tax on profits. Again this has a huge impact on trading efficiency.
3. I have only really read one book on how the market operates and that is 'The UK Trader's Bible by Dominic Connolly'. I wish him well on the other side of the world.
4. It is essential to have a high aptitude for risk and a gambling mentality. Conversely you have to be risk aware and all the time you are trying to make your trades more efficient by getting the odds on your side. I know what I mean here but hard to explain.
5. Outside spread betting I chiefly invest in small cap companies. Spread betting on FTSE 100 companies requires a greater awareness of the macro economic picture. For example, prices can move rapidly when economic news is released, it is essential to be in front of the screen when this happens. Likewise, London prices react to movements on Wall Street so an eye has to be kept on the Dow Jones Index.
6. Avoid the temptation to take positions outside your chosen sphere of knowledge. I got to know "my shares" well but once or twice was tempted to take a position on a share I did not know which had experienced a sudden price movement. It usually was not a good move.
As I said at the beginning I am no expert on spread betting and I am sure there are many books which set out techniques and strategies far better than I have. What I do know is that the above has worked for me and I have managed to recoup the losses of last year with some profit left over. I am sure that there are many flaws in what I have written and yes luck did play its part.
I used to work for a group which had a spread betting division, I had no involvement with the division but I know from talking to the guys who ran it that most spread betters end up making losses. I therefore do not encourage anyone to follow in my footsteps but if you do, be aware that the losses can be far higher than your initial stake. It is not a game for the faint hearted.
It is hard work and can be very draining. For that reason and also because a torn muscle has healed at least I hope it has, I am returning to the golf course for the summer months and my spread betting career is over for the time being.
Taking Care of Business At Home - A Personal Finance Checklist
Why would you not consider yourself a business of ONE person? Or your family as a business of 3 or more people? Well that is exactly what you are - "Me Incorporated", "I Inc", "We Incorporated". You truly must consider yourself a small family business. Like any business you have ongoing expenses (mortgage, rent, utilities, groceries), revenue (salary and other income) and major capital expenditures (house, vehicle, vacations, renovations).
Like any good 'household business', you need to do some planning. Set out a budget for the year, track your expenditures and retained earnings (savings). Yes, all of this looks, feels and is exactly like a well run business. On My Gosh! Don't rush out and buy an accounting package to run your household. And no need to take a crash course on accounting or bookkeeping. You can accomplish all your financial tracking and planning requirements with some paper or by using a simple template with your favorite spreadsheet package - Microsoft Excel or even with Open Office.
Just like a well run business, your household budget and tracking your spending is best served using a visible record of events; namely, financial records, bank or check register. It is just like tracking your road trip progress using a map. If you know where you are now, then you will have some idea when you will arrive at your destination. In life, money or finances allows you to get to your personal destinations or dreams. A visible financial roadmap of your 'Me Incorporated' finances, mapping your progress, seems logical.
Running your 'Household Business', like corporate business, requires a few processes to keep track of your finances:
1) Establish a yearly and monthly household budget. Consider all your expenses - weekly, monthly, quarterly and yearly outlays of money. You will be surprised at the length of this list and all the places you spend your money.
2) Track monthly your actually spending and income against the budget you established in step 1. This will help you see the 'peaks and valleys' of spending or seasonality aspect of your expenses. Over time, you will come to know these expense 'peaks and valleys' and this will help you maintain a positive cash flow. Bottom line: have money in the bank to pay all your expenses and still have some left over (retained earnings). Your single biggest challenge in running any household (or business) is always having enough money in the bank to pay the bills; especially, the unexpected ones. Having a buffer of savings will help with these 'peaks' in expenses.
3) Track all your bank account activity. Track and enter in your Bank or Check Register every deposit, every electronic (ATM, web, PayPal, debit machine) transaction and every analog (check, money order) withdrawal. And reconcile your bank statement every month. Know exactly how much money you have available in your bank account(s).
4) Especially track your spending through credit cards and lines of credit. These are potentially the 'run away' expenses. Remember only once a month do you see the visible record of your credit card spending. Compound that with the fact that most people have more than one credit card. This can easily result in multiple 'spending surprises' each month. Be diligent in tracking your use of credit card transactions. Breakdown the credit card expenses into their respective budget items - gas, groceries, clothing, entertainment, etc. This will help you separate normal household expenditures from other shopping incidentals. You will come to see your spending patterns and can now make adjustments. Just like your bank account, reconcile your credit card statement every month.
Like any good 'household business', you need to do some planning. Set out a budget for the year, track your expenditures and retained earnings (savings). Yes, all of this looks, feels and is exactly like a well run business. On My Gosh! Don't rush out and buy an accounting package to run your household. And no need to take a crash course on accounting or bookkeeping. You can accomplish all your financial tracking and planning requirements with some paper or by using a simple template with your favorite spreadsheet package - Microsoft Excel or even with Open Office.
Just like a well run business, your household budget and tracking your spending is best served using a visible record of events; namely, financial records, bank or check register. It is just like tracking your road trip progress using a map. If you know where you are now, then you will have some idea when you will arrive at your destination. In life, money or finances allows you to get to your personal destinations or dreams. A visible financial roadmap of your 'Me Incorporated' finances, mapping your progress, seems logical.
Running your 'Household Business', like corporate business, requires a few processes to keep track of your finances:
1) Establish a yearly and monthly household budget. Consider all your expenses - weekly, monthly, quarterly and yearly outlays of money. You will be surprised at the length of this list and all the places you spend your money.
2) Track monthly your actually spending and income against the budget you established in step 1. This will help you see the 'peaks and valleys' of spending or seasonality aspect of your expenses. Over time, you will come to know these expense 'peaks and valleys' and this will help you maintain a positive cash flow. Bottom line: have money in the bank to pay all your expenses and still have some left over (retained earnings). Your single biggest challenge in running any household (or business) is always having enough money in the bank to pay the bills; especially, the unexpected ones. Having a buffer of savings will help with these 'peaks' in expenses.
3) Track all your bank account activity. Track and enter in your Bank or Check Register every deposit, every electronic (ATM, web, PayPal, debit machine) transaction and every analog (check, money order) withdrawal. And reconcile your bank statement every month. Know exactly how much money you have available in your bank account(s).
4) Especially track your spending through credit cards and lines of credit. These are potentially the 'run away' expenses. Remember only once a month do you see the visible record of your credit card spending. Compound that with the fact that most people have more than one credit card. This can easily result in multiple 'spending surprises' each month. Be diligent in tracking your use of credit card transactions. Breakdown the credit card expenses into their respective budget items - gas, groceries, clothing, entertainment, etc. This will help you separate normal household expenditures from other shopping incidentals. You will come to see your spending patterns and can now make adjustments. Just like your bank account, reconcile your credit card statement every month.
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