Broker for Dow ind av & S&P500..?

gollum

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Hi, after reading Chartmans Trading the DJI . Was wondering what people do to trade intraday or daily on this..
This may be basic info to many but i just discovered that these 2 indices cannot be traded with DA brokers unless you want to trade futures, which i don't as have no experience.
I also have a preference for CFD trading as opposed to Spread, purely because i want the best spread i can get..
Who can you trade with for these indices on a CFD.?
If i have completely mis-understood im sure somone will correct me.! :confused:
 
If you want to trade indices then why not the futures? They go up and down and can be charted realtime in whatever way you like, and DA gives good spreads and fills. Are you concerned that the minimum trade size is too big for you - from $5/tick for mini Dow up to EUR12.50/tick for DAX with most others in between? If so, have you worked out what account size you would need to support a risk per trade acceptable to you if trading intraday, taking into account the smaller movements you'll be looking for if going intraday rather than daily?

Whether you choose to trade over minutes or days makes a difference to what platform you choose but you don't sound like you're distinguishing much between them at the moment.
 
Index trading Dow and Spy

Have a look at Deal4free, narrow spread, no commisions and free, fairly good charting in their current CFD offering.

Also up to1% margin if you want it, not that i'd recoomend taking it to the 1% level.
 
hi blackcab, to be honest i have not investigated futures much, as everyone seems to say it is only for experienced traders. (It also mentions this in alex elder's book which i am reading at the moment) I supposed the reason for this was 1. too much risk per point 2. sudden spikes . With regard to 1..... It seems to be untrue as u stated $5 per point .which for me would be OK!!
I could trade this intraday but again i have read this is more risky but no sure if this applies to futures. (I really have to get a demo up & running to figure how i will actually trade)
With regard to 2......Take monday just before the open at 14.30 on the S&P future. It seems there was a huge dip down to 1165.0 .. (I Am using advfn to view at present). But i suppose this is ok if the brokers guarantee stops
 
The mini Dow (YM) is $5 per tick. Because the Dow moves in whole-point increments it's also $5 per point. The emini S&P (ES) is $12.50 per tick and because it moves in quarter-point increments, it's $50 per point. But the S&P is roughly one tenth the Dow, so where you might get 20 points on YM at $5 each = $100, the same move on ES would be 20/10 = 2 points at $50 each = $100. There are some other things to take into account (the Dow moves 20 points in 20 whole-point ticks but the S&P moves 2 points in 8 quarter-point ticks), but they roughly compare.

Risking 1% of your account per trade is a rule of thumb. If you open a trade having estimated the Dow could move 20 points against you before you close it (how you arrive at 20 or however many points depends on where the price is in relation to significant support/resistance, other significant levels, your target price, other things), you're risking 20 points = $100 on YM = necessary account size of $10,000 to open that trade with 1% risk. If your account is $5,000 then 1% risk would be $50 = 10 YM points, or 1 ES point.

I say all that to point out that you need to consider trade/stake size in the proper context of risk management rather than just a figure on its own that - on its own - may seem small.

You may have read that intraday is more risky, but have you thought it through yourself and done the (simple) maths? If you risk x% per trade and manage your trades with discipline, is it more risky than daily, weekly or LTBH? The longer term your trade, the bigger your stop has to be, therefore the larger your account, to stick to a fixed % risk per trade. Trading intraday might whittle down your account slowly if you take many small losses, but they will be small if you manage them properly. If you see that happening, work on your art until they become small gains.

I'm only repeating what others have said here before so beware of my received wisdom, second hand advice etc.
 
You might alsowantto look at ETF's such as SPY, QQQ, DIA, they track the movement of S&P, Naz100 and Dow respectively, they are fairly widely traded and very liquid, there are also a range of holders for individual sectors. though liquidity and spread can be a problem with some of the less popular sectors
 
Hi everyone sorry it took time to get back but had some major pc probs(arent they always?)
tks Awoodj.. I will certainly check that out..
blackcab. tks again... i will certainly give more thought to my strategy & if long term trading would be part of it. //you said 'Whether you choose to trade over minutes or days makes a difference to what platform you choose ' Can u explain further..?

Hi Roguetrader, i will look into ETF's but prob is not sure what they are..?
 
ETF = Exchange Traded Fund, the most popular probably the QQQ which trades based on the values of the Nasdaq 100 index. (Spy and Dia are also very popular) the difference is they can be bought and sold like a stock, are highly liquid and have a far lower overhead structure than something like a Nasdaq 100 tracking mutual fund. Values are fractions of the index so you don't need so much money to buy and sell them and you don't have the short sell on an uptick rule as with most US stocks.
 
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