The Trader's Academy - by Traders for Traders

Spread betting is tax free in the UK for UK residents no matter which platform one uses, because for tax purposes it is considered as gambling, the winnings from which are tax free in the UK.

If you're out there thinking ' Is it just me, or is the pa abnormally shit today ', it is not just you, the pa really is abnormally shit today ( where I'm looking anyway )

Dow traders, watch level 431 down to S2 at 420, as there may be the customary NY rally from this level. If that breaks, we could be going deeper to around 330.

Hi Cat , been reading your threads for a while , probably best stuff on here . I wonder if you or any one could clarify for me the tax rule on spreadbetting if this all you do for a living .
Heard many conflicting comments on this , as a profitable yourself i would hugely appreciate your input

Hi Nandas, and thanks for the compliment.

For all intents and purposes, spread betting is gambling and so tax free, so you are not required to declare any gains from it on your tax return as you normally would as money earned from employment. that said, if income from trading is the only source of income, and one's yearly profit is substantial, then it is advisable to contact the Inland Revenue. I won't divulge my personal situation here, and will only say that it is best to inform IR if trading is all you do, though they will not be interested until one's annual profit is well into five figures. The reason is that on a normal tax return, you can offset your business costs from your income, but if you were to do this for spread betting, then under the same rules, you would be able to offset your losses from your gains, which, because most spread betters lose far more than they gain, makes a mockery of the whole system, and for now anyway, this is a rule for all. This is why the Inland Revenue have included a ' rare ' circumstances section for spread betting, meaning that on those rare occasions where someone actually makes a lot of money from it, a certain % of tax may be required. Spread betting is very lucrative for the government because of the taxes it imposes on the industry, not on the spread betters themselves, so they are unlikely to change anything for the foreseeable future, and for every spread better out there who does earn a decent living, there are another hundred who make very generous weekly donations to the brokers, who in turn give a good proportion of that money to the government.

This may help --http://www.spread-betting.com/trading-faqs/spreadbetting-tax-free

Thank you Cat for your reply and all the information , also thank you so much for your posts on this site and for your words of encouragement , i look forward to the day when i shall be needing to contact the inland revenue

Heck, that's one hell of a 30m Dow chart.

So what now. I wish I knew, but, I'm as confident as confident can be with my analysis for the Daily chart, and with this very strong equity performance so far this week in mind, I see very strong resistance at around 21,600 if the Dow can get up there, in the process breaking new highs. This is important, because there will be people going long on a break of new highs, but according to my Daily chart, they will be trading slap bang into heavy resistance if they do.

I do have one reservation though, because as a multi-time framer trader, my weekly Dow chart is still very bullish, but, I always pay more attention to the big signals on the smaller chart, because they are the ones that show best what is going to happen on the bigger chart before it happens, or indeed before it is even visible. This is something I have learned trading multi-time frames.

So, if the Dow does hit the all time high again, just watch that 21,600 level, give or take of course. Alternatively, it may not even get there, as it is pretty close right now, so I'm getting far more excited about short opportunities than I am about long ones, because I don't believe there's very much higher to go.

If I'm wrong, and it sails higher, so be it...no harm in bringing to people's attention what I see, and we can all make our own judgement anyway.

Aside from this, EU is still looking strong, and the dollar is still looking weak, with further moves with momentum to come, which supports the above analysis. 1,600 is the big resistance level for EU if it can get there, which is the weekly 200 exponential moving average. At the end of June, 68% of EU traders were short the euro. Today 62% are. I think we know which way the money is flowing on that particular pair...certainly not into the bank accounts of the majority of EU traders!

As for the Dax, it's up there teetering not far below its all time high, but as I mentioned not long ago, those weekly candles look pretty bearish, and the candle for June was a shooting star. In addition to that, there is a potential diversion pattern on the monthly MACD, which as it stands at the moment, is showing a lower high, and that is definitely something to pay attention to.

No chocolate trilby dessert for me then.

I would like to share here how I use the Imbalances to analize the trading

#FGBL #BUND shows the ASK Imbalance with #icebergs Absorption

First post for a little while, and it's short and sweet.

Perhaps the most important quality for success in life is to have the courage of your convictions, and this applies no more strongly than in the markets. Because of the relative volatile unpredictability of the markets, we have to be resolute and firm in our decisions otherwise we get smacked around all over the place. Decide what you think the price is going to do based on your analysis, and go with it. If you turn out to be wrong, keep your losses small, and re-position yourself accordingly, but never ever let anyone else or anything sway you from your original plan unless you are absolutely certain that this time it is wrong.

The best traders are always the ones who have the greatest belief in themselves and in their systems, and they are the ones who trade their plan consistently, with minimal deviation, day in day out, week after week, year after year.

There isn't a trader in the world who has not spent a sleepless night or two wondering whether the goal they are pursuing is the right one, especially when things aren't going well or the task ahead seems daunting.

To this I will just say one thing. All of life is uncertain, and the more we push ourselves, the more we strive to improve our lives and the lives of our families, the greater the challenges we face and the less certain life can become. Any real achievement always comes at a cost, and the cost associated with trading success is a great deal of time and usually a great deal of money. It is the same with anything. If we want something of real substance in our lives, we have to earn it, and we have to be prepared and willing to take all the pitfalls along the way, and the road to financial freedom as a trader has a great many of these as we all know too well.

Most of you reading this will know all about the sacrifices that are necessary to achieve anything really worthwhile, whether it be trading, a business venture, or indeed relationships. It can be a long hard slog without any guarantee of eventual success, and seeking success as a trader even more so bearing in mind the small percentage of people who do actually go on to become consistently profitable. Many of you will have been at the point of giving up many times, of that I have no doubt, but you continue because you believe in yourself and your ability to get there eventually, and that is the way it must be. We have to be 100% committed to the goals we set out to achieve and our hunger to achieve must never wane, no matter how long it takes.

Those who don't make it in this business fail only because the hunger to succeed was never there in the first place, and I am not talking about fleeting, ephemeral hunger which disappears at the first hurdle, I am talking about a fire which burns with increasing intensity no matter how many failures there have been along the way or how long the process has taken. These are the traders who will eventually succeed, the ones who are prepared to stay the course, no matter how long it takes or what is required of them. The focus on success keeps them going, and the self-belief, though knocked off course from time to time, remains solid and undiminished.

That said, sometimes desire just isn't enough. The desire is there but success still eludes us. This is because coupled with desire, we must have the ability to learn - to correct our mistakes, to adapt, to improve. If we just carry on making the same mistakes over and over, which I know many people do, then despite all the will in the world, we can never succeed. Desire has to be equally matched by the ability to learn, to recognize our mistakes, correct them, and keep on moving forward by trial and error. If there is a key to success in this business, it is this.

I agree all successful traders possess this must have steely will coupled with the ability to learn.

Yet even with this right ingredients, success is not guaranteed, after paying such a high cost without which it makes the task closer to impossible.

Is it worth the risk ?

Ofc for someone who's done it it's a resounding yes. For the many who despite doing all the right stuff did not make it, they might right now count the heavy cost to conclude no.

The point is anyone who thinks about trading for a living in place of the usual employment need to think about what they're getting into from the start. They need to count the cost, the sacrifice, the pain that will come. Forget about the reward part of the equation, the most relevant part is the cost of doing it without any assurance of success, it might be for nothing to show at all and that's the norm.

All very true, but as we all know, nothing in this life is guaranteed, and there are many disappointments along the way. Whether the high cost of learning to become a trader is worth paying when success comes to relatively so few all depends on the individual. With some it is, with many it isn't.

A possible remedy is to think what else would you do instead of trading if it won't work out. Make sure not to burn all the bridges and have a plan B if things are not working out as you would expect. As romantic as the whole 'give it your all, never give up and work your ass off' approach sounds, it is wise to be a little more practical and have a safety net, especially when it comes to trading.

The other day I came across an interesting article in which they discussed the findings of a recent study which concluded that people nowadays - despite the relative abundance of information and opportunities - are more miserable than past generations in basically all areas of life. It is probably due to the fact that most of us are confronted day in and out with the most successful, beautiful and richest people through social media and the internet and we tend to compare ourselves with the 1% (the percent representation of these people). No wonder you feel miserable if you see an as*hole driving a Lambo and you are struggling to make ends meet.

Most of us wannabe traders probably flock to the markets because of the promise of easy and fast money. Money that can guarantee to care-free lifestyle. Don't get caught up in the hype and delude yourself. You will feel constantly disappointed and burn through a lot of cash. As Cat said, it is not guaranteed. By learning and adjusting you might make it. But make sure to face the markets prepared.

A quick post before I turn in for the day, but this is mega important.

I Know of quite a few traders who have destroyed not only their accounts but also themselves by refusing to admit they are wrong, and this is usually against the trend. How many people have been blown to pieces repeatedly shorting the euro for example instead of waiting for pullbacks and trading with the trend? Loads I suspect, and I know of a few.

I'm no psychologist, so why traders trade against momentum by trying to pick tops and bottoms is beyond my understanding, but traders do it, the majority do it, and the majority fail to make any money in this business. All the successful traders I've come across, and I mean all, are expert at trading with momentum on their side. All of the traders who are losing money, repeatedly do the opposite. Does this not tell us something?

Identify which way momentum is running , and trade with it not against it. Yes, counter momentum trades are possible, but they are riskier, and much more difficult to time.

Goodnight.

Could not agree more. one of the most important lessons one can learn.

night cat

I think the word trend and momentum is used interchangeably. Trend is the general direction of the market(depending on timeframe) and momentum is the continuous strength measure of any sequence of price movement - it could be trend or pullbacks or reversals or just whipsaws. Trend or direction(preferred word) of price and momentum of the price movement means 2 different things altogether.