NLP Podcast Extract : Vicky Karambatsos-Kitson on Spread Betting and Trading

"My name is Vicky Karambatsos-Kitson. I'm a full-time trader, a independent financial markets trader, and I'm also a trader coach, so I trade, coach and teach and mentor traders to become profitable."

"That's a good question because that's something that people tend to get mixed up quite a lot with, and partly to do with the media. Spread bidding or spread trading is one product, if you like, that a trader can use to enter the market in trade. There are other products like CFDs - contracts for difference - you can by the shares themselves just so share trading, traditional share trading - you can trade in currencies, you can trade in options, in futures - the list is endless."

"So the traders size of account, their style of trading, their objectives and goals financially, will largely determine what's the best product to enter the market with. Spread bidding or spread trading becomes really popular - its still embryonic in the UK, but still very popular - because its brilliant with the people starting with a small account which could be as little as Five Hundred pounds with a broker, it's great for people who are in and out of a trade quite quickly, buying-selling, buying-selling, because the costs are so low per transaction, as compared to traditional shares."

"And the final reason that it 's so popular is that it is completely and utterly tax free in the UK! "

"Yes - so lets compare it with traditional share dealing or share trading because that's what people are really familiar with. So in the share world, to do a typical transaction where you have five thousand shares, that kind of thing, you need something like - it depends on the price of the shares before - five, six, seven, eight hundred pounds just to get into the trade."

"So you need a large account. There are also lots of costs due to the government, its like buying an asset, buying a house - you've got to pay the broker substantial amounts, twenty pounds a go at least t buy and sell the shares for you, the stock exchange - and before you know it, a large chunk of what your profits."

"So traditional share tradings are excellent for people with very large accounts, and I'm talking about people with a hundred thousand and over, and for people who are buying to hold stock, I would say that they're perfect. But for anybody who's got a medium or even a large account, but is going to be trading constantly - buying or selling, three, four, five times a day, if you like - fifteen trades a week, if you like."

"And the costs of the share trade are much, much, lower - negligible in fact - and you've got a massive advantage, which is that you don't pay tax, which you do on the share-trading. "

"Well that's a brilliant question, because it comes to the heart of the matter in terms of whether you're trading as professional or not, and the heart of the matter is risk. Professional trading, if I had to say it in ten words or twelve words, to what is processional and profitable trading, it would be; the measurement, the management, and the utilization of risk, such that it works to your advantage every single time."

"So one of the disadvantages if you like, or one of the challenges, of spread trading, is that its a leveraged product. And what leveraged means, is just like a home loan, or mortgage" - you put in some money - the bank gives you the rest, maybe with a twenty, thirty, forty thousand pound deposit, you've got a one thousand, two thousand pound property that you've got access to much quicker than you otherwise would have been able to - that's leverage."

"Spread trading is also a leverage product - Now that means, you can make money ten times faster and ten times greater - absolutely without a shadow of a doubt - but you can also lose money ten times faster and ten times easier and ten times greater if you re not trained enough."

"OK, lets be really clear. If you were to do a share transaction, and a spread-trading transaction for an equivalent amount - an equivalent underlying share value - the amount that you'd lose on both is equal.

However, because you only need one tenth of the amount in your spread trading account, because it ' s leveraged. To do the trade it feels like you're doing more, it that makes sense - because you've only got a small amount in your account - you can actually lose more, if you're untrained - than what you have in your account."

"However, professional trading is all about, never, ever, ever being in that situation. We risk-manage, every single trade, to a tiny, 1% value of our account. "

"Yes, I would suggest that people start with, if not end with momentum or position trading. I love position trading, because it enables you to trade at the end of the day, outside market hours - you don't need the best PCs in the world or the best broadband connections, or anything like that - you're placing your orders or your trades outside of market hours - there's about five of them a night - and you can expect three or four of those to trigger the next day - you're looking at about fifteen trades a week."

"So it takes about forty-five minutes a night to do this. And what you need for this style of trading is - an OK PC, and I'm not talking about anything more than four-hundred pounds worth of equipment. You might have an analogue connection, it wont matter at all - I'm assuming that most people have broadband at home these days which might be slightly better."

"You need Skype, which is completely free, obviously, over the Internet, www.skype.com You need a broker account, now there's many, many great brokers out there. And I'll give anybody that's interested the contact details of the brokers out there - I need to ask some questions about what their needs are, but I could certainly sort them out with a broker - some are brilliant, some are not so good. You need a broker account."

"And you need at least five hundred pounds in your account, A good size trading account would be about five thousand pounds - about four or five thousand pounds - that you could start without a shadow of a doubt for as little as four or five hundred."

"And I would say, that you categorically need to train."

"Approximately - we tend to train throughout our careers, and it becomes self-funding obviously. I would say probably about two and a half thousand pounds."

Read or listen to the full Vicky Karambatsos-Kitson transcript and podcast on Trading.

Liam Beale

Business Development Manager

PPI Business NLP: NLP Training and NLP-based Business Training

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