Chapter 16 - Diary of a trader

I fear the Welshman himself has been sacked. And it is all my fault. "Changes within the Group.... I've been reassigned.... Looking forward to the new challenge," he tells me. I feel well enough for dessert only when he reassures me he still has his office with the splendid view of Tower Bridge.

As we go our separate ways, I muse on our conversation. Is it the wine affecting my memory, or did I really hear him say that the best trading hint he could give me was: "Decide what you think will, for certain, happen; then trade precisely the opposite way" ?

I ponder it, as I would a fortune cookie, all the way home.

A week or so later, on 7th July, an email from Sean O'C with the subject line Moral Dilemma arrived:

"Enjoy reading your experiences. Here is one from me and others on this awful day.

I knew the FTSE100 was a good short this morning. Once news of the terrorist attacks were confirmed and the FTSE tanked. I was suddenly faced with this moral dilemma of making money from a very bad thing or pulling out. I pulled out and watched the FTSE disappear into the abyss. I was OK about it at first but now feel badly shaken by the experience. Upset by the terrible events and angry at myself for not being ruthless. I am new to spread betting and the amounts in question are small but significant in terms of confidence. What would you have done?"

In fact, it was a question of what I had already done. Like most of us, I first ascertained that my loved ones were thankfully safe and well. Then I found myself compulsively riveted to the news. Lots of discussion about how the markets would respond to the outrage, and how long it would take for them to recover.

Remembering the Welshman's final remark, I promptly placed a £1 BUY bet, shortly before the opening bell on the NYSE, with the DOW languishing at 10,143 about 130 points down.

Minute by minute, the market began to recover.

But now, having read S's email, I felt morally reprehensible. Upset that I was profiting from such a vile situation. I called SuperMum former ace trader and my new mentor to see if she thought I was wicked.

"I lost friends at Cantor Fitzgerald on 9/11," she told me, "so it's something we've all spent hours thinking about and discussing. But remember, the terrorists' prime aim is destabilisation. They'd love to wreck the Western economy. So if traders and other investors support the market by refusing to sell and buying in the aftermath of an attack, it's a good thing. Much, much better than the marketgoing into freefall and taking months to recover."

The next day, I closed my July Futures trade for a profit of £200. And felt good about it. (I was also pleased S closed his SELL bet when he did.) Over the following week, the DOW continued to climb, and I made more winning trades. Until, at 10,586, I unilaterally decided it was high enough and decided to sell. I swiftly saw the error of my ways, and escaped with a loss of only £16.

Then came another email. This one from Andrew H:

"I have been spread betting small amounts for about 2 years. This summer started really well. I had nine consecutive winning trades, and a profit of £1800 in one month. The problem was I think, after a few "wins in a row", I needed to win each trade. It did not matter if I won £1, as long as I won. I think I got my inspiration from Arsenal a couple of years ago.

Like you, I fancied the £/$. It had fallen from 1.92 to 1.84, so I thought it was bound to rise... and anyway I was invincible! So I bet £1 to rise, with no stop loss.

It fell

I bet another £1 to average it out at 1.835. By the time it reached 1.825, I had BUY bets worth £5. "No problem," I thought. "It has fallen ten full cents now, so it is bound to rise. And anyway, I am unbeaten in nine trades in a row."

Again like you, Sally, I went on holiday to Penzance. When I came back, £/$ was 1.775, and I was staring at a loss of £2500. I closed the trade.

So all my hard work researching and successfully betting on things I never knew about before (what is a 30 year T bond?) went in a flash of the Arsenals and a determination to go through the whole year without losing one trade (and not putting on a stop loss!).

Three morals of my story:

1. Never go to Penzance (it is obviously cursed)
2. Always put a stop loss
3. You are never invincible - the little pixies at spread bettingland can turn nasty."

I responded to Andrew that perhaps we should both take our inspiration from Chelsea, but he hasn't replied. I think he's still hurting.

Meanwhile, I decided to revisit £/$. The trend was certainly down... all the way to 1.7395. I shared Andrew's view that it was destined to rise. With the utmost confidence and the words decide what you think will, for certain, happen, then trade precisely the opposite way' ringing in my ears I placed my 50p SELL bet.

Four winning trades later, I was beginning to feel almost like The Special One himself. The £/$ SEPT stood at 1.7266 and my entry and exit timings had been if not immaculate, then at least pretty damn good. I'd even chalked up another little win on the DOW as well.

You can probably guess what happened next: my subsequent £/$ SELL resulted in a loss of £90. A touch of the "Manchester Citys", you might say.

But I followed this setback with two modest wins on the DOW I don't see it touching 10,700 by the way and even made £3.85 on a binary bet, even though I'm not quite sure how... I suppose I'd better read the instructions!

Anyway, my Finspreads account currently stands at £2,002, and I'm feeling encouraged to continue. My eternal optimism may yet be vindicated.

And the Welshman has been replaced, apparently, by an Ulsterman. I have yet to hear from him, and my moles at Finspreads are too circumspect to give me any information about him. So if this turns out to be my final column, you'll know why...

I'm curious to know what everyone else thinks of the Finspreads' new binary bets. Anyone making money? Or got a good trading strategy? I'm wondering whether to bet early in the day, or leave it till the last hour.

Today, the FTSE's at a 43-month high, so I'm musing on whether I should be looking again at UK equities. I have my first tutorial with SuperMum later this week, so I'll let you know the outcome. Meanwhile, I'd love to hear YOUR trading stories and strategies. Let's all encourage one another!

Sally Nicoll is a writer and a Finspreads customer whose career to date has embraced journalism, broadcasting, and advertising copywriting She lives in London and is currently writing her second novel. Feel free to contact her at veryluckymoney@hotmail.com.
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