Advice / info / clarifications on short term trading.

This is a discussion on Advice / info / clarifications on short term trading. within the First Steps forums, part of the Reception category; Originally Posted by Boon Trader Which demo platform would you recommend? I have a TD Trading account, is their CFD ...

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Old Aug 20, 2013, 12:04pm   #16
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Originally Posted by Boon Trader View Post
Which demo platform would you recommend? I have a TD Trading account, is their CFD platform worth using to learn on?
Plus500 | Trading with Demo Money

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Originally Posted by Shakone View Post
Day trading is particularly hard as trading costs tend to drown out your profits in the long run unless you are very good.
With Shakone on that, costs are harder to overcome, simply as they are a larger proportion
of gross profit in day trading.
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Old Aug 21, 2013, 4:58pm   #17
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Originally Posted by Liquid validity View Post
At a push swing trading may work if the holding time is weeks.
Even then, CFD's will have lower costs.
Off the top of my head, as far as I remember, the crossover point is 3 months ish.
In other words, the share dealing account you have now is more efficient
to hold trades for longer than 3 months.
With CFD'd the opposite - max efficient holding time is 3 months ish.
This is due to rollover costs (sometimes called overnight financing).
https://www.interactivebrokers.com/e...p?ib_entity=es

You don't have to leverage risk, but a small amount is ok - 5:1
Leverage (finance) - Wikipedia, the free encyclopedia

CFD's do incur CGT, but no stamp duty:
Guide: Contracts for difference | This is Money

No idea, thats down to you - google it.
Last time I used CFD's was years ago with IGindex.
I'd imagine TD are OK and you are familiar with them.
Just as well to research all the costs, spreads, commissions and rollover charges
with a number of providers all the same.
Great, thanks for all the info - learnt more on here with your replies that trying to get my head around the more formal explanations on wikipedia et al.

Regarding the tax issue, I believe spread betting is not declared as income, just SD and CGT - is that right? From what I can see CFD and spread betting are similar. Is this the case? What are your experiences with these?
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Old Aug 21, 2013, 5:02pm   #18
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Originally Posted by timsk View Post
Hi BT,

I'll leave that to L_v to answer.


CFDs don't incur stamp duty, but the do incur capital gains. You may be thinking of spread betting which doesn't incur any duty or tax and is the most popular entry route for new traders. There's a whole forum devoted to these two here: Spread Betting & CFDs If these interest you at all, besides the differences mentioned already, you'll need to get your head around their other relative pros and cons. You can do that here: What are the Pros and Cons of Spread Betting Vs CFDs?


Check out the 2nd link in my signature and follow your nose from there.


I can't comment on TD as I've not used them. But, take a look at our Reviews section. Additionally, for more tips on finding a broker, check out this FAQ: Can You Recommend a Data Feed, Charting Software & Broker?

Enjoy!
Tim.
Greatt stuff, thanks for the info and links, I'll get on top of those...

You bring up a question I just asked in another post re CFDs and Spread betting (I thought they were roughly the same thing). Can I ask you what I asked in the other post? What is your experience with using these?

Cheers
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Old Aug 21, 2013, 5:03pm   #19
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Originally Posted by Liquid validity View Post
Noooooo....
Top tip, in general, steer well clear of penny stocks.
Wide spread, illiquid and prone to manipulation.
There are people who deliberately target them as they
know there is a lot of inexperienced money there, easy pickings.
This is pretty much what I had heard but confused myself with the assumption that penny stocks = day trading.
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Old Aug 21, 2013, 5:07pm   #20
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Originally Posted by wackypete2 View Post
I'm not saying you should make more trades but in general you will have more trading opportunities than swing trading. Trade using a small size than your swing trading, ie: buy/sell 200 shares instead of 600. This way if you lose 3 trades in 1 day you are not deep in the hole



All trades should be closed at the end of the day no matter if profit or loss (day trading!). IMO, as a new day trader you should aim to end the day with some profit rather than a loss even if just a small amount. If you have a few dollars profit then resist the urge to take that last minute trade with less than an hour or so to go. Why risk a losing day when you can end with a few dollars in hand. Eventually you will develop your own risk profile and determine when and what trades to take but keep it very simple to start.

Revenge trading will kill you. STOP after 3 losses. Log out of the the platform, shut down the computer and enjoy the rest of the day knowing you can return again tomorrow. If you are so determined to win a trade at any cost, that's when you will lose a long string of trades all in 1 day or over leverage to compensate and decimate your account. Then there won't be anything left for tomorrow. Some days are just not going to be your day. Learn to stop and wait for tomorrow.

Good Luck!

Peter
Great advice, thanks for that. The old addage of 'throwing good money after bad' seems especially relevant here...
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Old Aug 21, 2013, 5:09pm   #21
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Originally Posted by Shakone View Post
Be careful about thinking what you would have made. We can all look at a chart and see millions on offer, but it's an illusion. If you could make 12K, then you could reasonably lose 12K as well.

If it seems to good to be true, that's because it is.

Day trading is particularly hard as trading costs tend to drown out your profits in the long run unless you are very good.
This is exactly why I joined the forum, it just *seemed* to easy, which made me think I was missing something...which I was, a lot
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Old Aug 21, 2013, 5:12pm   #22
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Originally Posted by Liquid validity View Post
Plus500 | Trading with Demo Money


With Shakone on that, costs are harder to overcome, simply as they are a larger proportion
of gross profit in day trading.
It sounds like perhaps I should wait until I have a bigger 'pot' before day trading so that my risk is reasonable and potential returns better able to accommodate running costs.
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Old Aug 23, 2013, 5:03pm   #23
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Quote:
Originally Posted by Boon Trader View Post
You bring up a question I just asked in another post re CFDs and Spread betting (I thought they were roughly the same thing). Can I ask you what I asked in the other post? What is your experience with using these?
Hi B T,
I've never had a CFD account, so I can't really comment on those. I've had various spread betting accounts and liked some more than others. But it's all just personal preference really. A lot of members have accounts with IG as they're the biggest firm in the business and pretty much invented modern day spread betting. Additionally, the 'old hands' on T2W often have accounts with ETX (who I use currently), following a successful competition / promotion they ran back in 2008.

I recommend that you understand the pros and cons of spread betting Vs CFDs and, once you've done that, decide which vehicle to opt for. At that point, you can start searching for a broker that meets your needs.
Tim.
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Old Aug 24, 2013, 7:53am   #24
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I would like to add my view here that its not potentially the leverage mainly, but it is the lot size which we use which makes huge difference. Thus, always use the lot size which is in accordance with your capital money for efficient money management.
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Old Aug 25, 2013, 9:59am   #25
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Love reading this thread so simple, but brillant.
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Old Aug 25, 2013, 12:00pm   #26
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Hindsight is one of the biggest enemies of traders,
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Old Aug 25, 2013, 12:04pm   #27
 
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Originally Posted by Solas0077 View Post
Hindsight is one of the biggest enemies of traders,
Oh I don't know, I've made fortunes in hindsight
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Thanks! The following members like this post: wackypete2 , Liquid validity
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