Tony Loton @ Traders'

Not so long ago I edited a book for a guy who postulated that one sure way to make money in the markets is to bet against the recommendations of a particular investment bank; not straight away, but a few weeks later.

It is in this context that I re-read an article, dated 15 October, in which Goldman Sachs cited Centamin as a favourite stock that offered "inexpensive exposure to a high growth gold asset". Well, you may have seen what happened to the Centamin share price this morning, and here's a chart to remind you [read more]

It shouldn't take a rocket scientist to figure out what I mean by a "flatliner"; it's a stock that has fallen a long way over a long period of time and whose price is just bumping along the bottom now that all the sellers have sold and no-one (for the moment) wants to buy.

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I mention this because a guy I know in the United States tells me that he made several million dollars by taking positions in these flat-lining stocks and then simply waiting for some of them to rocket (okay, so it is rocket science) back up to their former glories.

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If like me you've been trying to catch the Lonmin falling knife, you might be just about ready to throw in the towel. But you might be doing so at exactly the wrong time, just as the price has bottomed-out.

I'm not in the prediction business -- especially about the future -- but I think there are at least two plausible reasons to conclude that the price of Lonmin shares may now have bottomed out. [read more]

No, I'm not offering a trip to Las Vegas; nor have I taken such a trip recently except in the metaphorical sense that I will allude to shortly. But my attention-grabbing headline is relevant.

All financial speculation is a gamble, whether it is the noble art of serious "investing" or the more "risky" (apparently, but I don't believe it) pursuit of leveraged trading with spread bets or CFDs. Subtleties of risk management aside, if your chosen markets go up then you make money and if they go down you lose money... regardless of what kind of account you used to make the trade.

If you accept my argument that all financial speculation is a gamble, then you have two choices:

1) Have some fun gambling your own money, congratulate yourself if you win, and figure that you only have yourself to blame if you lose.
or
2) Give your money to someone else for them to gamble on your behalf, and pay them to do so.

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One of the golden rules of trading and investment is to never average down, despite the fact that logically this should lower your average purchase price thereby enabling you to break-even much sooner. As I see it, the problems with "averaging down" are twofold:

1) If you're not careful, averaging down on your falling stock positions can attract all of the cash away from your profitable positions; and when those averaged-down stocks go bust, you've lost it all!
2) The very notion that with a lower cost base you can "break even much sooner" means that you will probably do just that -- i.e. exit at break even -- as soon as you can. So you risked all of your money for the reward of zero profit. [READ MORE]

Whoever thought I'd find myself describing Tesco as "trendy"? The trendiness of Tesco will not have been helped by it reportedly receiving an investment not so long ago from Warren Buffett -- who is probably one of the least "trendy" people on the planet (no offence)! But Buffett's interest may have helped the share price [read more...]

Any former clients of the now-defunct spread betting company World Spreads will be interested to know that today I finally received my compensation cheque from the Financial Services Compensation Scheme (FSCS). Here is my update.

Like me, you may occasionally find yourself in the embarrassing position of wanting to make a trade in your spread betting account at a time when you have little or no "available to trade" trading funds. Like me, you may prefer your spread betting account(s) to be self-sufficient and therefore you're reluctant to feed yet more new money into your account.

You may have noticed that very often you can free up additional trading funds by applying stop orders to existing trades that didn't already have them, or by ratcheting up (on long trades) or down (on short trades) your existing stop orders. Many spread betting companies free up more of your cash for trading when their computers see that you are taking less risk by employing stop orders.

In many cases you can go one better by guaranteeing your stop orders so that the spread betting companies know exactly how much risk you are taking. Read more...

I've noticed that the new TradeHub spread betting platform offered by Gekko Markets has a couple of unique (as far as I can tell) features that make it more friendly for new spread bettors who may be transitioning from a traditional investment background; these being exactly the spread bettors who will also be interested in my latest TRADERS' Magazine "Better Spread Betting" article.

Read my blog post about the new Gekko Markets "TradeHub" trading platform, to see if it's worth you taking it for a spin.

Please forgive the sensationalist headline, but it's true! Or is it?

How many of you new and even not-so-new spread bettors (or other traders) would give up your day job if you could earn £40,000 per year, tax free? Most of you, I reckon, and in this article I prove that it can be done!

But don't trust me just yet, because I conclude the article by demonstrating how most spread bettors and other traders kid themselves... and others... about how profitable they are, have been, or will be in the future.