"I am full of admiration for anyone who can make money through spreadbetting, something that I am hoping to learn to do despite my "bloody nose" so far. I am always interested to note your trades and guess at your stop loss policy. I get the impression that you open some trades without setting stops in the hope that you can establish one later on "in the money" but perhaps you do set one at the outset? For instance, some time ago you had a short position in US Treasuries which has undoubtedly gone the wrong way and I am wondering where you exited (if you have) and whether that was due to a stop or not?

"From my limited experience I find that I am often stopped out too early and that I miss profitable moves as a result. This is often due to employing trailing stops which get moved up on volatility where they are triggered before the real move takes place. You recently went long Silver and that has gone down today which would have stopped me out had I entered at the same time as you. If you are still in this trade I would be most interested in your stop loss policy - at what point would you exit? Perhaps I need a bigger float so that I can employ wider stops, but I would be concerned about incurring larger losses as a result."

David Fuller's view Thanks for an interesting email, likely to be of interest to a number of subscribers.

Ideally, traders start young, when they are resilient and trading appeals because they have little money. Successful traders tend to be controlled risk takers rather than gamblers. The learning curve is very steep, and for this reason I never encourage middle aged or older investors to take up trading, which is always a double-edged sword due to leverage and can be very stressful.

In other words, if you did not start as a trader and are primarily interested in preserving wealth, why take up trading now? Some form of sport or other physical exercise would be a better hobby and a lot less stressful.

I have traded since my 20s but I now trade less than I did in earlier decades because I consider myself more of a long-term investor and collector. If one has money for trading, the most important rule in my opinion is to trade well within one's capital. In other words, keep positions small, until you can build them up within a profitable trend and when your earlier positions are protected with in-the-money stops. In choppy markets trading can be considerably more risky, particularly if the trading range evolves into a trend in the opposite direction from which one is positioned.

Even the best traders should expect to take plenty of losses, either because the initial decision proves to have been questionable, if not outright wrong, or the tactics were inappropriate given what actually occurred. The hope is that one has more good than bad trading hunches and that one is able to run some medium-term trends.

I often eschew stops on an initial position, although it is a good idea to have an idea of where one should exit the trade if it is not working. This discipline is a lot clearer on price charts than fundamentals. With charts, just decide before opening the trade on a price level which would at least question the initial premise. Fundamental perceptions can be more subjective; the situation can change, and other influences may be more important.

I like to consider both technical and fundamental factors when trading or investing but I broke one of my cardinal rules of trading by backing my perception of the fundamentals on Treasury bonds, rather than the chart action when it started to go wrong. Incidentally, if I have not reported the closure of a position, you can be certain that I am still holding it.

I felt that long-dated US Treasuries (historic, weekly & daily) had ended a 28-year bull market (falling yields) in 2008, and commenced the bottoming out and base building phase prior to a secular bear market. However that view has certainly been challenged by recent events, as I discussed in response to Email of the day (3) on Monday, illustrated with 10-year Treasury yields.

My bearish fundamental view was based on the supply of Treasuries floated, plus the US government's runaway debt problems, the weak USD, the amount of Treasuries held by foreign countries, and commodity price inflation exacerbated by the Fed's monetary policy.

These factors outweighed, in my view, deflationary pressures, the buying of primarily short-dated Treasuries by the Fed, and the ongoing yield curve play by which banks borrowed cheaply from the Fed and leveraged that money up in medium to longer-dated US debt - effectively government largess to enable banks to recapitalise.

What I did not anticipate was Mr Bernanke's statement last month that he would keep US short-term rates at their current low level until mid-2013, if necessary. That was a green light for banks to borrow even more money from the Fed to leverage up their yield curve play in long-dated Treasuries. Futures prices spiked higher (weekly & daily) triggering a similar rally in UK gilts and other long-dated futures.

I will allow my September US 30-year T-bond futures to be rolled forward in the next couple of days, for two primary reasons. The move looks very overextended and Mr Bernanke, with perhaps some help from high-frequency trading, has given foreign governments a glorious opportunity to get out of their long-dated US government debt.

In answer to questions in the second paragraph of the email above, I did not place a stop on my speculative silver purchase earlier this week, due to this metal's volatility and also because it was an initial trade, which I increased today.