Better Spread Betting

Friday, 24 May 2013

All good things must come to an end! (on Barratt)

Don't worry, I don't mean I'm shutting up shop. I mean that my much-documented pyramided position trade on Barratt has finally come to an end by stopping out. Here are the final scores in two spread betting accounts:

By my reckoning, it's £866 profit, having taken nothing like that much risk along the way. And a good test-case for how many times a profitable position can be pyramided. As per my position trading strategy, Barratt now goes on my Stop-Out List... not to be re-entered (usually) unless I can do so at a much lower price, and starting again with a small position size.

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Disclaimer: this posting is for general education only; it is not trading advice.

Wednesday, 15 May 2013

Betting on Barratt (again)

Regular readers will realise that no week would be complete without me having placed another bet on Barratt. So here it is, a new pyramided position that takes my total stake in my Capital Spreads reference account to £7-per-point:

This is turning into a really nice example of a pyramided position trade, but you will notice something unusual about it:

This week's position (dated 14.04.2013) is now actually more profitable than the previous position (dated 25.04.2013), which is kind-of odd for a pyramided trade... don't you think? The fact is that I established the latest position when the price dipped to a level at which it almost took the guaranteed stop orders out on all my other positions. In other words, the stop order on my new position was so tight that the additional risk-to-stop on the new position was very small; so it was worth a punt on what was effectively "averaging down" the previous position.

Monday, 13 May 2013

Has London Capital Group (LCG) turned the corner?

I ask the question "Has London Capital Group (LCG) turned the corner?" because I have a couple of modest spread bet exploratory positions riding on the hope that it has:

Both positions (blue lines) are now in profit, with my common guaranteed stop order (red dashed line) somewhere between the two entry prices... which means that I should now at least break even overall. And if the price continues to go up, I might just be tempted to pyramid my positions like I did with Barratt.

My above chart doesn't tell the complete story of why I thought this beaten-down stock may be worth a punt, but this "big picture" chart might do so:

There's plenty more upside than downside, and the price seemed to have been flatlining (again).

In the unlikely event that you're wondering what LCG does as a company: their trading platform underpins spread betting brands like Capital Spreads and InterTrader.

Wednesday, 1 May 2013

Betting on Bitcoins

An email from spread betting firm SpreadEx caught my eye yesterday when they announced that they're the first spread betting company to allow speculation on the price of Bitcoins. If you've been hiding in a hole so deep that you don't know what a Bitcoin actually is, I can help you by quoting from the SpreadEx press release:

"Bitcoin is a decentralised digital currency that’s used as a substitute for government-backed currencies by internet users and businesses... In essence, the currency is viewed as digital gold and as a potential inflation/devaluation hedge."

It's telephone-only dealing I'm afraid, and it remains to be seen whether this turns out to be a gimmick or a viable option for Forex traders who have no other way of speculating on Bitcoins without actually getting hold of some.

If you want to see a chart of the Bitcoin price, here's one. And if you see a potential long or short trade, you'll need to open a SpreadEx account as the only place to place the trade.

Monday, 29 April 2013

Six of the Best on Barratt

I'm beginning to sound like a broken record with all my posts about the Barratt position trade, but here I go again. I've added yet another £1-per-point position in the Capital Spreads account, making six of the best pounds-per-point as shown here:

A discussion on a forum elsewhere now prompts me to say something about this pyramiding.

Although my preferred position trading approach encourages me to hold a profitable position for as long as possible while pyramiding into it, I have been undertaking this particular pyramiding partly for the sheer sport: to see (and to show) how far I can go with the case study.

For me, pyramiding is about deploying profits that have been locked-in with a trailed stop order on an existing position... into a new position. The new position might be in the same stock (as in this case), or equally a different stock that appears to be a better candidate. This second approach of re-investing the locked-in profits from one stock into a different stock may be particularly relevant when operating with non-guaranteed stop orders, because in this case you don't want to end up with all your eggs in one basket. Not a problem for me, though, because the stop orders on these accumulating Barratt positions are all guaranteed on the Capital Spreads platform (as they would also be on InterTrader, and as the could be on IG). So I know for sure that I can lose no more than ~£138 of the >£500 profit accumulated in my position trade; and under no circumstances can I lose the whole farm.

Tuesday, 23 April 2013

£500 Profit from £25 Risk

Anyone who has read my blog regularly will be well aware of the example (but real) Barratt position trade that I'm running in a Capital Spreads account. You will recall that this position trade began life as a single £1-per-point position with an initial risk of (about) £25 to my guaranteed stop order.

By pyramiding this position as the price has been rising, you can see in the snapshot below that the total profit is now nearly £500 -- which is not a bad reward for my initial £25 risk.

Along the way, this position trade has been self-funding because I have pyramided only accumulated profits into additional positions.

Friday, 19 April 2013

Today's Biggest Surprises!

I was going to title this posting "Today's Biggest Gainers", but it seems more appropriate to title it "Today's Biggest Surprises". This is what I woke up to on a couple of trades that I opened in the past couple of days:

They were surprises because mining stocks seem to have been on a perpetual down-slide for the past few days, weeks, months, or even years. Maybe this is the turnaround before some big pushes higher, and -- if not -- then you can see I'm well protected by my guaranteed stop orders which are now around the break-even levels but with plenty of wriggle room.

Well, it's a change from me going on about the Barratt pyramided position trade, which is also in the ascendency again today :-)

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