Well as always seems to be the way these days I think I’m going to get time to get back to some spread betting but then other things crop up and my plans fall by the wayside. Anyway I’m still here and I am still planning on getting back to my old ways but it’s just one of those things that will happen when it happens.
I have been doing a bit of trading again recently. More of a trial than anything else but never the less trading all the same. I’ve been keeping an eye on the spread bet magazine blog over the last few months and I’ve made a couple of trades that have worked out well for me after reading some of their articles. The most notable is BUMI. Back in November last year I placed a £1 per point trade on BUMI at 270p with an initial stop set at 232. This is a little bit more risk than I like to take at 3.8% of my initial £1000 funds but still I decided to take the trade never the less. Over the few weeks after the trade it didn’t do much but I kept my eye on it. It carried on this way until the beginning of January when the stock really started to take off. I bought in again on 22nd January at 325p with an initial stop at 305 and moved my stop on my existing position to the same level, therefore locking in £35 from my first trade with a £20 risk on my new trade and therefore securing £15 profit overall but now at £2 per point. Over the last few days it’s rocketed again and has hit highs of around 445p today. I bought in again at 399p yesterday with an initial stop of 370p therefore locking in £150 from my first two trades and a new £29 risk, so £121 profit but with £3 per point. I decided to take profits today at 430p as I think the move may have had it’s day and in total made a £290 profit from this one trade.
Making such a good profit from one trade has certainly renewed my enthusiasm for spread betting but it is at times like this that I must be at my most cautious. I need to take a little time to digest the profit otherwise I will probably go making a stupid trade and work my way back to where I was before. While this one trade has made me a good profit I am still slightly down on my original trading funds. The plan now is to try and replicate this success my taking a much longer term view of my trades than I have done previously. I also thing that having the extra wiggle room in my stop position has helped as trying to stick to 1% on a £1000 bank has had the opposite affect in that I have been stopped out prematurely of trades because of a stop that’s too close.
I still believe that doing more research into companies is the key to a good trade. My last BUMI trade is a good example in that it was the guys at spread bet magazine that done the research I just copied them and made money off the back of it. All I need to do now is learn how to do good company research like the guys at SBM and I’ll be laughing all the way to the bank. Or at least that’s the theory.
I hope to be back blogging on a regular basis again soon so please do keep checking back.