As I write this, I’m nursing a bit of a sore head and an empty wallet. Within the last one month I’ve lost almost £30,000 spread betting for about an hour per day five days a week. So I managed to blow around £1,500 an hour. That’s really quite a bit of cash. Actually, it’s not exactly as bad as it looks. Fortunately, I was betting using a few spread-betting companies’ demo sites. They are simulations of their live betting sites that permit you to practice before you start betting with real money. I realise that I am no financial genius otherwise I would have been rich long ago. However, the truth that I managed to squander so much money so quickly does pose the question – if spread betting seems really easy, why achieve this many individuals get completely wiped out extremely quickly?
We’re increasingly seeing advertising for spread betting in investing and money management publications. In usually the one I donate to, four or five different spread betting companies take full-page colour ads each week, outnumbering every other kind of advertising. Spread betting ads happen to be common in the commercial sections of several weekend newspapers and will most likely soon start to look in the non-public finance sections. Spread betting could appear deceptively attractive to numerous savers. All things considered, money in a bank, shares or unit trusts will at best give us about an unhappy five per cent a year before tax. Yet an acceptable run using spread betting can very quickly let you pocket ten per cent a week – five hundred per cent a year – completely and gloriously tax-free. So spread betting can let you earn in only twelve months what it’d have a century or even more to reach with most other investments.
Spread betters gamble on price movements of anything from individual shares, currencies and commodities to whole markets just like the FTSE, Dax or S&P. It is called spread betting because the company providing the service makes most of their money by putting yet another spread around the price where something has been bought or sold.
It’s tax-free – Whenever you buy or sell shares, receives a commission dividends or receive interest from a bank you will have to pay taxes like stamp duty, capital gains and income tax. Unless spread betting is your full-time job and only supply of income, you can find no taxes to be paid as it’s regarded as being gambling.
You can bet on a rise or fall at the same time frame – If the FTSE, for example, is trading at 5551-5552, you can place two bets, one so it will rise and one so it will fall. These only get triggered when the FTSE actually moves. So when it starts going up, your bet so it will rise gets triggered. Similarly when it drops, only your bet so it will fall is triggered. So it may seem that, come rain or shine, you’ll probably win.
Huge leverage – In the event that you bet say £50 a pip (a pip is usually the minimum price movement you can bet on), you can easily win four or five times your original bet if the price moves in the best direction. On an excellent bet, you can win much much more.
You can await the breakout – Prices on many shares, currencies, commodities and other items people bet on tend to have periods of stability followed closely by bursts of movement up or down, what spread-betters call ‘the breakout’ ;.You can place a bet that’s only activated when the breakout comes.
You can adjust mid-flight – With most bets, such as with horse racing or on roulette, once the race has started or the croupier has called ‘you can forget bets’ you have to hold back helplessly for the result to see if you’ve won or not. With spread betting you can choose to close your bet at any time. So if you’re ahead, you can take your winnings; if you’re behind you can either cut your losses or wait in the hope that things will change and you’ll be up again.
Given every one of these properties of spread betting, it ought to be pretty easy to produce a fair bit of money without a lot of effort. If only.
Industry estimates claim that around ninety per cent of spread-betters lose most or all of their money and close their accounts within 90 days of starting. There be seemingly another eight per cent or so who make reasonable amounts of money on a regular basis and you can find around two per cent of spread-betters who make fortunes. เดิมพันไก่ชนออนไลน์ I’ve been to a couple presentations run by spread betting companies and at one of these simple the salesman let slip that over eighty per cent of his customers lost money. Even many professionals lose on about six bets out of each ten. But by controlling their losses and maximising their returns when they win, they could increase their wealth.
The businesses want you to reduce – When you open a demonstration or real account, you can get several calls from extremely friendly and helpful teenage boys and women at the spread-betting company asking if there’s anything they could do to aid you to get going. This really is customer service at its very best. All of the people contacting you’ll parrot the line that they just want to help and that they’re happy if you’re successful as their company only makes money from the spread. Some will reassure you that they desire one to win because the more you win, the more you’re likely to bet and the more the spread-betting company will earn. This could make you are feeling good, convince you that the company is open, honest, trustworthy and supportive and encourage one to utilize them for the betting. But it’s also a lie. It’s true that the company will make lots of its money from the spread. However, with many of your bets, you’re betting against the company and so they hope you lose, big time. In fact, during the last month I’ve seen several companies change the conditions on their sites to create it much more likely that people with them will lose. So, lesson one – spread betting companies are not your friends. The more you lose the more they win. It’s that simple.
It’s difficult to break even – In the event that you bet say £50 a pip and the price does go the manner in which you want, the spread betting company takes the initial £50 you win. So the price has to maneuver two pips in the best direction for you to win your £50 back and three pips for you to emerge with £100, doubling your money. However if the price moves three pips in the wrong direction, you lose your original bet plus £50 a pip, giving a complete lack of £200, a loss of four times your original bet.
Losses may be massive – With most gambling, you can only lose that which you put down on a horse, blackjack or roulette. With spread betting you can quickly bid farewell to a lot more than you wager. I forgot to put a stop loss using one bet and managed to reduce over £800 with only one £50 bet. Because your bet is leveraged, you can make both fabulous gains and excruciatingly painful losses. Too often it’s the latter. The little size of several bets, often £5 or £10 a pip can lull betters in to a false sense of security. It’s only when the losses go five to ten times the first bet that they realise the risk they’ve taken.
You can waste thousands on courses and systems – At one free spread-betting seminar I attended we were more than strongly encouraged to subscribe for a two-day weekend course teaching us how to spread bet successfully. This may normally cost (we were told) £6,995, but there clearly was a particular offer for the initial five visitors to subscribe of only £1,997. There are numerous such courses and also gurus offering to sell you their special spread-betting systems, guides, webinars and a variety of other advice. With so many supposed experts apparently making a full time income teaching others how to spread bet, there should be lots of takers. But I’ve found that you need to find out and more is available free on the Internet. As you specialist said, ‘Don’t bother wasting your money on ‘Guru’ books written by so-called experts. Those books are crap and not worth the paper they are printed on. Nobody sells a secret trading methodology if they’re really successful. The only real reason these guys are writing books is really because they didn’t ensure it is as traders’ ;.