I'm going to reveal one of my biggest financial failures to date. What I am about to reveal is a true account of how I made my first significant financial loss through stupidity and greed. I share with you hear because I originally set up this blog so that I would be honest and accountable for my financial transactions so that others may learn from my mistakes and successes, equally.
The Beginning of my CFD Experiment FailureThe instrument of my downfall was CFD trading, or Contract for Difference trading. I will delve deeper in to what exactly are CFDs in an upcoming post in the next month or two in series on Financial Products (so watch out for it!). I will try to give a decent explaination here of what CFD trading is. I say 'decent' because if I am truly honest with myself I cannot real off an explanation just like that (I need to use my notes and the internet) which just goes to show how stupid I was to invest. This in turn leads me to my first lesson:
- Find a company share price that I had been following for a while
- Predict its future month share price
- Open a CFD contract to say that the value would go up
- Have enough money in the account for short term falls
- Make a couple hundred quid in a few weeks without much risk or effort