By now you should understand the basic principles of placing bets with a financial bookmaker. You should also be feeling confident about planning your first bet. But before you start rushing to your online trading platform or for the telephone you need to have a fairly good idea on how the markets are going to behave throughout the period of trading. There are many ways to gain valuable information and once coupled together will give you a very good opportunity to make plenty of money. You don’t have to do it all yourself, nor do you have to spend a lot of money gathering the information.
The information you need to keep ahead of the financial markets is very much the same as you would use if you were actually buying and selling shares. There is plenty of this information available, and much of it is suitable for use by the beginner or the non-professional dealer as well as the expert.
Let’s look at the different sources one by one :
Television Information Sources
Sky, CNBC, The Money Channel, Simply Money & Bloomberg News
At this point I must stress the usefulness of receiving SKY Digital TV. On SKY Digital you will find Sky News, CNBC, The Money Channel, Simply Money and best of all, Bloomberg Broadcasting. The good news is that all five are not encrypted and so you can view them without the need to take out a subscription. SKY News carries an excellent amount of information on their Teletext service (check channel for further page numbers).
CNBC is a dedicated business channel, which broadcasts 24 hours a day and covers trading from all over the world. In the morning it reviews overnight trading in the Far East, it then concentrates on UK share markets. Throughout the morning it has interviews with well-reputed business commentators who give their own views on how markets will react throughout the day. In the afternoon, focus switches to Wall Street where it brings you extensive coverage of the days trading activity in America.
The Money Channel and Simply Money focus on money and share matters.
The best channel available on satellite has to be Bloomberg News Television. Again it covers trading from around the world but seems to cover UK markets more extensively. More importantly it has the exact current price of the FTSE displayed on screen all day. Every point change is covered which gives you a much better view of activity – especially when you get a quote from the financial bookmaker.
Bloomberg News TV (www.bloomberg.co.uk) is available on satellite – check your user guide for channel number.
Teletext
If you don’t have access to satellite TV then BBC2 and Channel 4 Teletext services are ideal. BBC2 provides an excellent business service, which begins on page 200. It also gives the prices of the FTSE. However, unfortunately, it only gives the price every 15 minutes so it’s not as up to the minute as Bloomberg. Channel 4 business pages start on page 500. They give the price of the FTSE although like BBC2, the price is at least ten minutes old. The best aspect of Channel 4 Teletext is that financial bookmaker City Index has a page displaying their prices. You can find this on page 699. C4 Market Report can be found on page 517. This covers the days trading and explains why different shares prices reacted the way they did.
Every day the two services publish news and information – especially look out for possible take-overs, yearly/quarterly profit/loss figures. Also look out for possible interest rate rises both here and abroad – pay extra attention to any Bank of England announcements, especially in the early part of the month. Any announcements on rises in borrowing rates could seriously affect share prices.
Inflation announcements will also dramatically affect prices. One day in 1998, for example, the FTSE rose by 120 points simply after news that there had been a fall in inflation. On another day in the same year worries over possible rises in US interest rates affected UK share prices. The FTSE fell 143 points from this announcement alone. The warning over possible interest rate rises was relayed over the Teletext service and all alert traders would have acted quickly upon the warnings and gone short, ie. bet on a likely fall on the FTSE to take maximum advantage.
To give another example, some months ago Market Report said that the FTSE 100 is expected to slip into negative territory ahead of an expected weak opening on Wall Street. The Dow Jones was seen as rattled by weak Asian markets. Dealers said the latest bout of weakness in Asian markets was creating uncertainty in investors’ minds. The next day the FTSE fell by over 50 points. The following day it fell by a further 80 points. This information went unnoticed by many people but again smart traders would have made a killing from the information supplied by Market Report.
Newspapers
Newspapers have been a great source of information throughout my time as a trader. The Sunday newspapers are very good at predicting the behaviour of markets throughout the coming week. All the broadsheet Sundays are excellent, but my favourite is the financial section from the ‘Mail On Sunday’. In here you will find an
independent report on the last week of trading and under the section ‘Share Prices’, it reports what should occur with stock market prices in the coming week. Having read these reports for the past 12 months, I’ve been amazed how accurate they have been with their predictions.
Try and read as many Sunday newspapers as possible, gather as much information on company and economic news and you will have a fairly clear picture of market behaviour for the coming week. The ‘Financial Times’ (www.ft.com) is also a good source of information, as is the ‘Wall Street Journal’ (www.wsj.com) if you are interested in US markets. There is also a service called City Digest (see Useful Addresses) which will send you a digest of the financial news in the Sunday newspaper, for a charge.
Magazines & Newsletters
Nowadays there are lots of magazines and newsletters available which not only give share and market information, but many of which also offer tips and advice. The disadvantage of a magazine or a newspaper is that the information can’t possibly be real time, ie. it is out of date the moment the magazine hits the shelves. They do, however, serve as a convenient record of how the markets are moving, and are good for spotting trends. Also, perhaps the best use of magazines and newsletters is for the tipping. Some of these magazines employ experts with many years of detailed knowledge of the financial markets and they give out hundreds of pounds worth of advice for the £2-£3 cover price.
With magazines, best of the bunch has to be ‘Investors Chronicle’. Available every Friday it covers market trends, economic and political events and displays helpful market trends charts. Other magazines worth taking a look at include ‘Investor’s Week’ and ‘Shares Magazine’. You can subscribe to magazines, get them from your newsagent, or read them in many libraries.
Investors Chronicle
Tel. 020 7896 2525
(Subscriptions 01622 778866)
Website : www.investorschronicle.co.uk
Shares Magazine
Tel. 020 7378 7131
Website : www.sharesmagazine.com
As you read through the newspapers you will also discover lots of advertisements for share information and tipping newsletters. These are mainly aimed at those who wish to buy and sell shares. However, their content is just as valid for those who wish to bet on the financial markets. Note that they are of little or no use if you wish to bet on other markets, such as currencies.
In most cases the quality of the tips and information is very good. The added advantage is that the information they carry is digested. That is it is all explained for you, rather than you having to draw your own conclusions as with newspapers and magazines. The main drawback with these newsletters is that you have to take an annual subscription – they cannot normally be bought at newsagents – and some of them can be quite expensive. You could, however, try some if you wish and see how accurate their information and advice proves over a few months.
Seminars and Courses
As you begin to get involved in the financial markets you will see that a number of seminars and courses are available. Again, these are mainly directed at those who wish to buy shares, although the information they give is also applicable to financial betting.
Perhaps the most useful thing to say about these courses is that you can take them if you wish but there is absolutely no need to. You can get all the information you need from this guide and for considerably less money too.
Computers and Financial Trading
Over the last few years, computers and the Internet have revolutionised the way in which all the financial markets work and changed it beyond recognition. However, it is important to say from the very beginning that you do not need either a computer or access to the Internet to bet on the financial markets successfully. Many if not a majority of those who bet have either never used a computer, or do not use one for betting. All the information you need is available from conventional sources, which we have already outlined, and all bets can be just or more easily placed by telephone than online.
Nevertheless, if you have a computer and Internet access you may wish to explore the possibilities and these are some of the ways in which they can help you :
- Real time market prices. Remember that the prices quoted on Teletext etc. are not real time prices but, normally, at least 10 minutes behind the actual market price. There are some Internet based subscription services such as ADVFN (www.advfn.com) which allow you to receive real time prices and market analysis direct to your computer, just the same as received by the stockbrokers! These systems can also flag up or warn you of major movements and trends in the markets in which you are interested. Although useful this information is by no means essential since information that is slightly behind time is good enough for most purposes. Also, some of the subscription services can be very expensive, thus making them only suitable for frequent traders.
- Charting and analytical software. There are several software packages available which allow you to draw up charts and conduct analysis of markets and stocks in which you are interested. We will discuss the use of charting in more detail later in the book. Again, these are useful but you can do very much the same thing manually.
- Research. Research is perhaps the most useful use of the Internet and, best of all, much of it is free – or almost free. With the Internet you can access websites and obtain press reports from around the world, tipping services, general information, share prices and industrial and company reports. All of this information can be used to help you make judgements on the financial markets. With some financial websites you can even register to have information on subjects of interest sent to you automatically, without even having to go looking for it!
Clever Strategy: If you use the Internet too much it makes research more difficult since there is so much information available that it is difficult to manage and use it all. The best option, whether you use the Internet or not, is to try all the sources of information for a few months and then restrict yourself to just a handful of sources whose information has proved most useful and accurate for you.
Most important: Remember that whatever source of information you use to help your financial trading should never be regarded as ‘gospel truth’. There is always the risk that information you receive from elsewhere could be wrong, or even downright bad. So whether you use information from TV, Teletext, newspapers or the Internet only use it as a guide to support your own judgement.