Question for an American friend

Hi all - first off, this question is REALLY for a friend!!

She - like me - is starting off in Trading and has done some preliminary tech analysis on a a stock. The candlesticks indicated a large jump and indeed, up it went across the week. I told her this is best spread traded, with stop-losses to ensure that she doesn't lose much if her prediction proves incorrect.

Trouble is, she's American and therefore cannot do this legally. My question is, is there any form of live trading whereby she can use this strategy AND be able to minimise the impact of any losses?

Thanks in advance,

JB

You surely mean spread bet, not spread trade? Ordinary trading should be done with a stop loss and is no different in practice from spread betting, so it's hard to understand your question!

Fair enough, please assume no previous trading knowledge on my part!! Correct, spread bet.

Jaybee from UK said:

Hi all - first off, this question is REALLY for a friend!!

She - like me - is starting off in Trading and has done some preliminary tech analysis on a a stock. The candlesticks indicated a large jump and indeed, up it went across the week. I told her this is best spread traded, with stop-losses to ensure that she doesn't lose much if her prediction proves incorrect.

Trouble is, she's American and therefore cannot do this legally. My question is, is there any form of live trading whereby she can use this strategy AND be able to minimise the impact of any losses?

Thanks in advance,

JB

Click to expand...

stops are not guaranteed, brokers may provide slippage

Cfd's???

KillPhil08 said:

Cfd's???

Click to expand...

the company i work for instance doesnt guarantee stops

Personally, if she is new to Trading I wouldn't use Spreadbetting anyway. One of its benefits is "leverage" which is a powerful technique for increasing ones return BUT only if one has strict Money Management rules. However, in the hands of those who are less experienced "leverage" is one of the quickest ways to lose all your money. IMO Best avoided at the beginning.

As a side note, one can negate the use of leverage when Spreadbetting but for newbies I think it is simply best avoided in the short-term as the prospect of greater returns using less initial captial is too hard to resist for many newbies.


All IMO,

Chorlton