Recommended Setup for SpreadBet Trading

Hi all

I have just recently started spreadbetting and am a beginner. Over the past 2 months I have spent time reading many posts here, which are an excellent source of information and also getting to grips with charting/trend analysis etc. I have also been practicing with a demo account. I am only betting small on FTSE shares right now to get hands on experience. The one thing that I am not clear on is, what tools should I have at hand to take this on properly?

This is my take >

1. Spreadbetting account (obviously).
2. Good charting package for historical data / seeking setups & entry points (I am using ProRealTime for this job)
3. Level 2


The biggest thing worrying me is wether I need Level 2 so I can see the market order book.

Also the spreadbet firm I have an account with does not show volume in the charts which I find worrying as I have come to the conclusion that you should never open a position without having strong volume as a confirmation of movement.

Thankyou in advance for your help.

TheRichIMO

therichimo said:

Hi all

I have just recently started spreadbetting and am a beginner. Over the past 2 months I have spent time reading many posts here, which are an excellent source of information and also getting to grips with charting/trend analysis etc. I have also been practicing with a demo account. I am only betting small on FTSE shares right now to get hands on experience. The one thing that I am not clear on is, what tools should I have at hand to take this on properly?

This is my take >

1. Spreadbetting account (obviously).
2. Good charting package for historical data / seeking setups & entry points (I am using ProRealTime for this job)
3. Level 2


The biggest thing worrying me is wether I need Level 2 so I can see the market order book.

Also the spreadbet firm I have an account with does not show volume in the charts which I find worrying as I have come to the conclusion that you should never open a position without having strong volume as a confirmation of movement.

Thankyou in advance for your help.

TheRichIMO

Click to expand...

When you are looking at SB charts then you are looking at their quote - not the market quotes - so they are not going to show volume. I've no idea how expensive level 2 is but you would have to be a pretty successful trader to cover the cost of that - especially spread betting. Also the SBs spread would not make it profitable day trading shares which is the only reason I could see investing in L2

Try Bigcharts.com or some other eod free charting site - they are bound to show volume.

Thanks Hoggums

To trade properly you will need a data feed.Esignal has its faults but is probably best for a starter.Volume comes with Esig. If you are swing trading volume is fine but it is unreliable for short term trades..Your right about this being great site for info.Spend money on a training course or mentor at your peril. Good luck

Thanks for the advice Julian.

Hi therichimo,
Welcome to T2W.

julian said:

Spend money on a training course or mentor at your peril.

Click to expand...

Unless you're fortunate enough to find a good one!

I second Hoggums' comments and would add that if you're day trading U.K. shares with a SB firm, the odds are stacked heavily against your success. Heavily as in massive, huge! If you're not day trading, then level II will be of little help and probably not worth the cost. If you are day trading, then your chances of success will increase by switching from your SB broker to a direct market access broker which, as Hoggums points out, will enable you to trade the actual market quotes rather than the larger spread from a SB firm. As a general rule of thumb, many experienced traders would recommend a newbie to try their hand at a longer timeframe first - i.e. swing trading or position trading - before attempting to day trade. For this, a SB broker will be fine - at least to start with. ShareScope is the other data provider well worth checking out if you haven't done so already.
Good luck,
Tim.

Hi Timsk and thanks for your advice there, which along with the other comments above have helped clear up the doubts I was having. Im definately changing my approach to this, in that I'll be taking much longer time frames than I was intending, along with being patient. Level 2 would clearly be wasted on what Im trying to acheive, so thanks all of you, you've saved me a few quid already.

therichimo said:

Hi Timsk and thanks for your advice there, which along with the other comments above have helped clear up the doubts I was having. Im definately changing my approach to this, in that I'll be taking much longer time frames than I was intending, along with being patient. Level 2 would clearly be wasted on what Im trying to acheive, so thanks all of you, you've saved me a few quid already.

Click to expand...

how refreshing, a newbie who doesn't expect to get rich overnight doing 1 minute scalping off the Tape.
best of luckTheRich, slow and steady is certainly the way to start out.

timsk said:

If you are day trading, then your chances of success will increase by switching from your SB broker to a direct market access broker which, as Hoggums points out, will enable you to trade the actual market quotes rather than the larger spread from a SB firm.
Tim.

Click to expand...

Hello,

Although i've been a member for a while i've only flirted with trading and so haven't posted many messages, however I have recently started taking trading more seriously, enjoying it and taking more time out to do so.

I've slowly found myself leaning towards day trading and i noticed this post. Could someone make it clear what a direct market access broker is, are there an additional charges to a normal spread trading platform, and possibly suggest a good broker of that kind. I currently use finspreads.

Paresh said:

I've slowly found myself leaning towards day trading and i noticed this post. Could someone make it clear what a direct market access broker is, are there an additional charges to a normal spread trading platform, and possibly suggest a good broker of that kind. I currently use finspreads.

Click to expand...

Hi Paresh,
Sorry not to reply sooner, but I've been out of circulation of late.
A direct access broker enables you to buy/sell actual shares/contracts that are being bought/sold by another trader. The main cost is commission from the broker - think of this as their fee for introducing you to the person on the other end of your trade. You will usually pay the bid/ask spread, but this is almost always smaller than that charged by a SB company. This is very different to trading with Finspreads. In their case (and all other SB companies)there isn't another trader on the other end of your trade - it's only ever the SB company themselves. All SB companies maintain that they make their profits from the wider spread and have no interest in seeing you lose. However, this is a very contentious issue and one which I won't expand upon here as it's addressed very thoroughly elsewhere on T2W. Given your choice of broker, this thread might be of interest:
http://www.trade2win.com/boards/showthread.php?t=26038
The bottom line is that if you're wanting to day trade, you'll probably have an easier time of it with a direct access broker. Recommending one though is tough because it depends upon your particular circumstances and requirements. Central to this is the instrument(s) you intend to trade and your timescale. Check out 'Brokers' under the 'reviews' drop down menu. Please be aware that this is a very superficial answer to your questions and is only really intended as a primer to additional study and investigation. Moreover, other traders more experienced than me may give you a different answer.
Enjoy - and welcome to T2W, btw.
Tim.

Sprea betting is a good way to get access to the markets while still learning.

I use capital spreads and have been very happy with them.

While I'm still learning, I am starting to make progress with my trading to a point where I will soon be taking an income from it. It has however taken me a few years to get to this stage. I was where you are about three years ago. I did however stop trading for a total of about 8 months (a few months at a time every so often). Don't expect startling results quickly. Just concentrate on trading properly and atch out for fear or gred led trading.

Volume is talked about a lot in beginner trading books, and a lot of advanced ones too. However, it's not the be all and end all. I am a swing trader, I use daily candlesticks over a 3 month period with 5, 21 and 49 day moving averages, Bollinger bands. I also use two indicators, the MACD and Momentum. That's an odd indictor position, but I've developed a way of using them that works for me.

I also use prorealtime and find their charts to be very useful, especially for free. I do not pay for intraday data as I get the intraday quote of capital spreads prices, which reflects the real progress of my trade.

You're definately starting with the right attitude.

Good luck

You can see my setup here. Few images.

The Tools Used by a Trader

Regards

Baldur

Which company are you using as I love these charts
Are they provided free by the spreadbetting company and which one is it?

many thanks

therichimo said:

Hi all

I have just recently started spreadbetting and am a beginner. Over the past 2 months I have spent time reading many posts here, which are an excellent source of information and also getting to grips with charting/trend analysis etc. I have also been practicing with a demo account. I am only betting small on FTSE shares right now to get hands on experience. The one thing that I am not clear on is, what tools should I have at hand to take this on properly?

This is my take >

1. Spreadbetting account (obviously).
2. Good charting package for historical data / seeking setups & entry points (I am using ProRealTime for this job)
3. Level 2


The biggest thing worrying me is wether I need Level 2 so I can see the market order book.

Also the spreadbet firm I have an account with does not show volume in the charts which I find worrying as I have come to the conclusion that you should never open a position without having strong volume as a confirmation of movement.

Thankyou in advance for your help.

TheRichIMO

Click to expand...

chrisdevlin said:

Which company are you using as I love these charts
Are they provided free by the spreadbetting company and which one is it?

many thanks

Click to expand...

Hi Chris

Wow its been a long time since i posted this question

Things have come a long long way since .. I only trade forex now but in answer to your question .. If you like those charts I think igindex provide a very similar package and yes they are free.

Hi TheRichIMO
Thanks for the reply, anyone else you know as well as IG who use these
Have heard CMC are good to use but then use PRT charts but then you pay for them, like it more seemless and believe might be tighter spreads available than IG but their tickets etc are user friendly
Any thoughts
using FX and FTSE and CAC

regards
Chris

chrisdevlin said:

Hi TheRichIMO
Thanks for the reply, anyone else you know as well as IG who use these
Have heard CMC are good to use but then use PRT charts but then you pay for them, like it more seemless and believe might be tighter spreads available than IG but their tickets etc are user friendly
Any thoughts
using FX and FTSE and CAC

regards
Chris

Click to expand...

Chris

Sorry I dont know of other spreadbet companies using those charts. I only ever demo'd CMC a long time ago so cant give any views on them. For FX I find ig spreads good and their execution is fine, never had a problem. I wish you good luck.