making money from financial spread trading 13 pages

Making Money From Financial Spread Trading

By Vince Stanzione

Sample pages www.thefintrader.net

Making Money From Financial Spread Trading

COPYRIGHT & DISCLAIMER The publisher and author of this document specifically disclaims any liability, loss or risk incurred as a consequence of the use or misuse, either directly or indirectly, of any information or advice presented in this document. This document was sold on the basis that no guarantee of earnings was given. Trading on financial markets is speculative and you should not trade with money you cannot afford to lose. No financial advice is provided by the author. The purpose of this workbook is to provide a balanced and informative view of investing in stocks and derivatives via a financial bookmaker. The workbook is for educational purposes only and Vince Stanzione and his agents do not recommend particular stocks, bonds, options, derivatives or securities of any kind. If particular stocks, commodities or indices are mentioned in this workbook it is for illustrative and educational purposes only. Although we have used our best efforts to provide the most accurate and innovative trading strategies, we cannot promise your future profitability and do not promise verbally or in writing that you will make a profit from trading futures, stocks, options or derivatives. Vince Stanzione and his agents are not in any way liable for your activities or trading resulting from information obtained from this manual, website or DVD. Ultimately all investment decisions are made by you. Use only capital that you can afford to lose. © Vince Stanzione, 1998 to 2010 2010 EDITION Vince Stanzione, 494 Midsummer Boulevard, Central Milton Keynes, MK9 2EA Resale or re assignment of this package This document has been sold on controlled and limited basis only. If you wish to sell or re assign this package then please contact us first.


Table of Contents Preface – £100 on Threadneedle Street – To multi millionaire 6 Introduction to this course & Trading Markets 14 Why use a financial bookmaker ‐ Breaking down the establishment 19 Trading on Financial Indices – Beyond the Dow and FTSE100 25 Placing a stop loss, controlled risk bet – How to sleep at night 31 Different types of orders – make the brokers work for you 33 The Basics of an Up Bet 36 The Basics of a Down Bet 37 Trading Currencies – what I learnt as an FX Dealer 39 Trading Commodities – whilst many laughed ‐ I made millions 47 Trading on Individual Shares – A great place to start 54 Shorting a share – How to make a Killing on the downside 56 US & Global Share Trading – It’s a BIG world 57 Trading Sector Indices and Exchange Traded Funds 59 Trading on Interest Rates 63 Property Futures and Mortgage Spread Trading 65 Options Made Simple 68 Making money from a sideways market – Dull can be profitable 72 Fixed odds Financial Trading & Digital Options 74 Winning Fixed Odds Strategies 78 Can small bets lead to big gains? 82 The power of Compounding how I made my first million 83


Part 2 Making Money with Trading Strategies – Keep It Simple Stupid 86 Know your ABC’s – Market Trends 89 Making Money with a Moving Average – The right way 94 When to Buy and when to Sell without guessing 96 My Trading Rules 97 Example trades and tips on using my system 102 How to know if bad news is coming before the crowd 106 Data, data everywhere but is anything worth using? 107 The internet and how to get the most out of it 109 The Golden Rules of Financial Spread Trading 116 Profiting with Support and Resistance how to read the crowd 118 Other Chart formations – The few worth following 123 Money Management and the Exit – what everyone forgets to tell you 125 Chart breakout – Trading New High or Low – You paid how much! 130 Trading 26‐ 52 Week highs and lows – buying high and selling higher 131 What Losing traders do – what I learnt from working as a broker 133 The secrets to my trading – What I wish I knew 20 years ago 135 What the financial bookmakers don’t what you to know 138 Opening an account with a financial bookmaker 139


Summary to Financial Spread Trading 142 Glossary of terms 144 Further reading 150 Terms and use of this package 153 12 month Trading Log 155 Technical Trading quiz answers (from DVD quiz) 159 Trading Check list 160 Slides used in the DVD 161


Making Money From Financial Spread Trading 6

Preface Thank you for purchasing Making Money From Financial Spread Trading. This workbook which has been licensed for your personal use together with the DVD and access to www.thefinancialtrader.com gives you access to a very powerful trading system. My name is Vince Stanzione. For the past 23 years, I have been trading financial markets. I have worked for various banks and brokers in the City of London, both in Equities and Foreign Exchange. For the last 18 years I have successfully traded my own money as well as teaching others how to trade. This has given me the freedom to live and “work”, if that’s the right word, from anywhere in the world, with no boss or the usual hassle that normal businesses face. During my career I have traded millions of dollars both for my previous employers and with my own money, using financial instruments such a futures, options, warrants, swaps, CFDs and in the UK, financial spread betting. Breaking down the establishment – Out with the old and in with the new Until around 10 years ago it was very difficult for private clients to use the same strategies as the large banks and financial institutions. Many of these strategies would require you to lodge large deposits and take risks which you or I would not want to take. Most clients would be encouraged to just buy shares or mutual funds and engage in buy and hold type of strategies. Thanks to the internet and Financial Trading Companies, the money making “club” is now open to everyone, regardless of where they live, what they do for a living or how much they earn. With nothing more than a trading account and internet access, the financial markets today allow you to take on and beat the financial big boys at their own game. Just think you can be sitting on a beach and still be trading, because many PDA’s such as the iPhone and mobile phones are powerful enough to trade from. The workbook not only draws from my 23 years of stock market experience both as a city trader, stockbroker and a private trader but from over 100 years of stock market research, notes and tried and tested trading systems that go back to Charles Dow (as in Dow Jones) from 1896.



My Background Before we go forward let's go back a little. My first share trade was placed in 1985 and I can remember it as if it was yesterday, STC (Standard Telephones & Cable), I bought £500 worth, and the share went nowhere and I phoned my poor broker every hour for a price. I became bored, sold it and a few years later STC was taken over by Northern Telecom. At that time working as a trading room junior earning the vast sum of £5,200 per annum, before tax and train fares. Working in the city was not glamorous and as a 16 year old junior I was treated like dirt, many would have given up but I persevered. Within 6 months most juniors quit or were sacked, most of the people that had started at the same time as I had gone within the first 6 weeks. My career started at 52 Threadneedle Street, London, The World Money Centre owned by Nat West Bank. When everyone else had gone home I would use the banks computers to programme and test my ideas. At that time we used mainframe computers that needed a whole office to house them, skilled operators to keep them working and an IT budget bigger than the GDP. of a small country to buy them. Today your £499 PC from any high street retailer does about 100x more and faster. As for money today, I earn more than £5,200 on a bad day, and a good day can make anything from £20,000 to £50,000. My name which is not that common can move a share price in London or New York just by the fact that I am a buyer or seller. Institutions, bookmakers and stockbrokers queue up to do business with me and call me “Sir” when 20 years ago the same firms would not give me the time of day. I continue to trade my own account, advise a few offshore funds and teach a small amount of new traders. The workbook you are now reading to a certain extent is a helping hand from someone that has learned the craft the hard way. While some may think that I produced this course just to make some more money I assure you this was not my primary motivation. I am not going to say that I am some saint or charity worker (although I do give a fair amount away) and of course I have made an extra income from publishing this information but the real reason was that I wanted to give the new trader a chance to beat the greedy banks, brokers and bookmakers. While everyone who works hard is entitled to make money and become a millionaire or multi‐millionaire if they wish to do so, I feel that at some point you have to play fair. When financial bookmakers, brokers and data vendors can spend millions on political donations, sponsorship (with no commercial benefit), excessive parties, private boxes at every major sporting event, offices with the finest Italian marble, yachts at the Monaco Grand Prix at US$1 million per day hire, while they screw every penny out of small traders, then something sounds a little unfair! The reason I give you a little background is to understand what can be achieved and the sort of person I am. I do not have a degree, any formal qualifications and I have never had what most would call a normal job or background, to many I am a social and academic drop out, yet by the age of 26 just 10 years from placing that first STC trade and earning £100 a week, I had well over



1 million in the bank and no debts so I suppose I must have done something right along the way. By 36 I was a multi millionaire. Everything I have achieved is thanks to my own hard work and perseverance. And as with every successful trader or business person I have met over the years I have had my fair share of ups and downs and started again from scratch after the 1987 crash. Most traders have been broke at one stage or the other, working in dead end jobs to get some trading stake back together again. Show me someone that has achieved phenomenal success in anything in life without some hardships along the way? Can I take someone with no trading experience and teach them to trade? If you asked me this question in 1997 when I wrote the first copy of this course I would have said yes I am sure I can, in 2009 I can say I know I can. Why so sure? Because 12 years on and a filing cabinet stuffed with testimonials, trading statements prove what can be done. The majority of these success stories had never traded a share, option or spread bet in their life, the few that had previous trading experience or had attended other courses were all break even or losing traders before they converted to my way of trading. As for my students their backgrounds range from Indian restaurant owners, Dentists, Florists, Fish & Chip shop owners, jewellers, doctors, housewives, London Black Cab drivers, Harley Street Heart Surgeons to name a few. I have also shipped workbooks to every corner of the globe including most of Europe, British Virgin Islands, Russia, Mozambique, South Africa, Australia and places that we couldn't even find a postage rate for. So if your dream is to trade from a deserted Island, it can be done. The concept of taking “city outsiders” was not new, in 1983 C&D Trading ran an advertisement in the Wall Street Journal for individuals who would be willing to learn how to trade futures. C&D was owned by Richard Dennis and his partner William Eckhardt. After an interview process they selected a small group which became known as “the turtles.” They were taught for 2 weeks (see note) and then given money to trade based on what Dennis had taught them. The turtles name came from a trip to the orient taken by Dennis. Upon visiting a turtle farm they felt they could grow traders as easily as they did turtles. The first group was so successful a second one was started in 1984 until the program ended in 1988 by which time Dennis had made $120 million on his share of the winnings.



Note on turtle course: I have the full original coursework that was written by Richard Dennis. While some claim to sell this work on the internet, it is not the same course. The full course whilst using some simple rules is not user friendly. I have incorporated a few of the turtles tools in my own trading and you will find them in this workbook. Also some of the turtle success was based on loop holes in the commodities trading markets, which have long since been closed.

Many of the turtles still run very successful hedge funds today. Some of you may have read or heard about Curtis Faith who was the youngest at 19 he made over $31.5 million, Liz Cheval manages over $100 million, Jerry Parker has made millions both as a turtle and with his own fund. In an article written about myself in The Independent on Sunday entitled ”How one man brought spread betting from the city trading rooms to the suburban living rooms.” The journalist commented on how bookmakers and brokers were still so anti anyone who came from outside the city square mile. Does everyone make money? Of course not, we would be in big trouble if everyone made money. Your first lesson is that: Trading is a ZERO SUM GAME, someone has to lose for someone to profit. Sorry win‐win does not work in this business, it is dog eat dog. If you decide to buy or bet on 1,000 shares in IBM someone has to sell those shares to you, you always have to have two parties. Someone will gain from someone else's losses. Fortunately in the trading world everyone does not have the same opinion and that is what makes a market, I may think that the Dow Jones Index is going up today, you may think it is going down. Making money is easier than keeping it If you have read my book, How To Stop Existing and Start Living, you will know that as well as trading and running various businesses I am a great student of human behaviour and psychology I advise you to take a look at this fascinating subject, it affects everything you do in your life and most importantly it's what drives the world stock markets, so you need to know some basics about how humans think and act.



27/9/95 23/10/02'02'97 '98 '99 '00 '01

Nasdaq Comp. (NAS:IXIC)

Jul Jul Jul Jul Jul Jul

Index

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ScopeShareChart (c) www.sharescope.co.uk

All trading whatever it may be, the stockmarket, the art market, property market or classic car market, are driven by two elements GREED and FEAR. The reality and facts have little or nothing to do with the stockmarket. The last few years has seen one of the biggest bull markets in my trading history thanks to the great DOT COM and telecom boom and the equally spectacular melt down, both of these presented me with very profitable opportunities and once you have studied this course you will know how to do the same when the next boom and bust comes, and I assure you it will because in the words of the great trader Jesse Livermore:

“There is nothing new on Wall Street or in stock speculation. What has happened in the past will happen again, and again, and again. This is because human nature does not change, and it is human emotion, solidly built into human nature, that always gets in the way of human intelligence. Of this I am sure. ”

As well as providing a very profitable trading period, 1998 to 2003 has also provided an excellent learning period of how greed and fear works and I will share some of my findings in this workbook. In 2008 The exact same pattern re occurred in the Oil markets.

Nasdaq Greed and Fear at its best?



41.35

4/10/06 25/2/09'07 '08Jul Jul

Crude oil (Light Sweet) Composite (NYMEX:CL)

Apr Oct Apr Oct

Dollars 1 day candles Commodity

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ScopeShareChart (c) www.sharescope.co.uk

Looks like a pyramid, this is how all booms and busts look.

A more recent example in the Oil market

By the end of this course you will know exactly how to make money from the upside and the downside. You will also know when to cut and run before the reality hits the public. Has anything changed from that first trade in 1985? Everything has changed yet nothing has changed. During the run up to the 1987 stock market crash I was a private broker so I had a good sense of how the public were trading and acting. In 1999/2000 I was holding a small amount of one day financial trading days which gave me contact with private traders again, and guess what had changed? Absolutely nothing. Sure the internet, computers and business channels were not readily available but the truth is that contra to the media marketing machine hype, most traders are worse now than they were back in 1987. For many traders Real Time quotes and hyped business channels are a disaster. Chat Rooms, Blogs, news paper tips and super technical trading charting packages have led to massive losses. My view is that technology has just speeded the whole process up. Where do I start? When entering into a new business it is easy to become overwhelmed and the initial enthusiasm and excitement can turn in to confusion and fear. My advice is to start at the beginning and take it one step at a time, don't be in a hurry to learn everything in one day.



Enjoy the journey as in many cases it is better to travel than arrive. For many traders that made large amounts of money in the markets over the last few years, some of which you may have seen press cuttings for, the money in my opinion came to quickly and easily and as you can guess in most cases departed as swiftly as it came. You may have heard the old saying, “You can eat an elephant if you take one bite at a time.” Worldwide Users This Workbook and its strategies can be used regardless of where you live. Whilst I will concentrate mainly on Financial Spread Betting the principles and the system can be used with different trading accounts and products so don’t worry if you’re based outside of the UK or a country that does not offer Financial Spread Betting. You can use Emini Futures, CFDs, margined FX, Covered Warrants or trade via an online stockbroker. How this workbook is divided

Section 1 While some of you may have read about spread betting or even tried a few spread bets, I would advise that you start again from scratch and take a clean and fresh approach. If you are new to this then that's great, you’re starting from scratch already. Section 1 concentrates on how to place trades, what markets you can trade on and the general background information you will need. As well as the mechanics I also give you many examples and do's and don’ts. So please go through this section carefully before rushing in to the actual trading system and trading strategies. Realise that although bookmakers publish vague information on how to place bets and a few copy cats have tried to publish information on spread betting from a theoretical view, most people that think they know how to place a spread bet really have no idea how it works.

Section 2 Once you have a good understanding of how to place trades, stop loss orders and a general background you can follow the exact rules that I use to trade and how you can start to select winning trades within minutes. The workbook is complemented by my website which you will be given a password for and the sample copy of the charting program Sharescope, which will allow you to test ideas on historic data.



While you are under no obligation to buy this or any other software package I have looked at many charting packages and for ease of use and value for money, Sharescope wins hands down. The current price is £79.95 to purchase the software and £18.00 per month for data updates, it is a fraction of what many charge. Even if you do not want to buy it then use the working demo as it is an excellent learning tool.

Section 3 You will find copies of my presentation used in the DVD which came with this package and the answers to the trading quiz shown on the DVD. To summarise, take your time to go through this course, enjoy the process and build up your trading. The world financial markets have been around for hundreds of years and they will be here for many more to come. You have every chance to succeed in the financial markets, I know this course works and my trading system works because unlike others I use it myself. And while it could be possible that a system works for a few months or years in a roaring bull market I assure you that hundreds of years and back testing to 1960 is no flash in the pan system. As Theodore Roosevelt quoted, "Far better it is to dare mighty things, to win glorious triumphs, than to rank with those poor spirits who neither enjoy much nor suffer much, because they live in the gray twilight that knows not victory, nor defeat.” Wishing you health, wealth and happiness,

Vince Stanzione The first and original Financial Spread Trader


Vince Stanzione

Typewritten Text

To read more and order the package please go to www.thefintrader.net

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making money from financial spread trading 13 pages

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