Spreadbetting Company reviews for use with Forex Net Trap

This is a discussion on Spreadbetting Company reviews for use with Forex Net Trap within the Forex Net Trap forums, part of the T2W Archive category; Originally Posted by MikesDirect G'day Mark, A standard MT4 Platform doesn't operate quite as simply as "price per pip" as ...

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Old Aug 27, 2010, 11:45am   #31
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Re: Spreadbetting Company reviews for use with Forex Net Trap

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Originally Posted by MikesDirect View Post
G'day Mark,

A standard MT4 Platform doesn't operate quite as simply as "price per pip" as there are other considerations to consider. Firstly there's the size of your account, the leverage you have selected on that account, and lastly the "Swap" price.

Attached is an Alpari Demo trade (third trade on this account) I did last Thursday. Account size started at £3,000, Leverage was 100:1.

I placed a Buy Order on GBP/USD. The trade volume was 1.0 and it closed it for a +50 pip profit. On this trade, the actual amount "won" (as you can see) was £321.67. The Swap was -1.73.

"Swap" is when the trader and the broker trade one currency for another at an agreed rate and then convert those selected currencies back at a selected date. Currency swap deals with the exchange of interest in one currency for the same interest in another currency. It is referred to as a foreign exchange transaction.

Interest rate swap is an agreement where one stream of interest payments is exchanged for another. In other words, it is the exchange of one set of cash for another based on the interest rate conditions. Interest rate swap is used to manage the exposure to instability in interest rates or to get lower margin interest rates.

It's not quite so "simple" as "price per pip."

Regards,
MD

ps: this is the case with Alpari which is a standard MT4 Platform.
pps: I wouldn't risk this amount on a live account but I was just demo-ing
ppps: I can't get SmartLive platform charts to run on my pc at the moment but will do a trade when I have it fixed.
OK I've sussed out the figures and I think it is in fact as "simple" as Mark pointed out!

On the above trade I made +50pips profit. On GBP/USD, a position of 1 Lot (I set the volume to 1) generates $10 per pip. Therefore, the trade equated to 50 x $10 = $500. The $500 profit is then converted to the currency of my account which is GBP. So, $500 converted to GBP = £321.67 (the rate at the time).

I hope that clears things up and you guys are not scared off from using an MT4 platform!

Regards,
MD
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Old Aug 27, 2010, 11:55am   #32
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Re: Spreadbetting Company reviews for use with Forex Net Trap

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Originally Posted by MikesDirect View Post
G'day Mark,

A standard MT4 Platform doesn't operate quite as simply as "price per pip" as there are other considerations to consider. Firstly there's the size of your account, the leverage you have selected on that account, and lastly the "Swap" price.

Attached is an Alpari Demo trade (third trade on this account) I did last Thursday. Account size started at £3,000, Leverage was 100:1.

I placed a Buy Order on GBP/USD. The trade volume was 1.0 and it closed it for a +50 pip profit. On this trade, the actual amount "won" (as you can see) was £321.67. The Swap was -1.73.

"Swap" is when the trader and the broker trade one currency for another at an agreed rate and then convert those selected currencies back at a selected date. Currency swap deals with the exchange of interest in one currency for the same interest in another currency. It is referred to as a foreign exchange transaction.

Interest rate swap is an agreement where one stream of interest payments is exchanged for another. In other words, it is the exchange of one set of cash for another based on the interest rate conditions. Interest rate swap is used to manage the exposure to instability in interest rates or to get lower margin interest rates.

It's not quite so "simple" as "price per pip."

Regards,
MD

ps: this is the case with Alpari which is a standard MT4 Platform.
pps: I wouldn't risk this amount on a live account but I was just demo-ing
ppps: I can't get SmartLive platform charts to run on my pc at the moment but will do a trade when I have it fixed.
OK I've sussed out the figures and I think it is in fact as "simple" as Mark pointed out!

On the above trade I made +50pips profit. On GBP/USD, a position of 1 Lot (I set the volume to 1) generates $10 per pip. Therefore, the trade equated to 50 x $10 = $500. The $500 profit is then converted to the currency of my account which is GBP. So, $500 converted to GBP = £321.67 (the rate at the time).

I hope that clears things up and you guys are not scared off from using an MT4 platform! I much prefer this method and I have had absolutley no slippage issues with Alpari.

Regards,
MD

Last edited by MikesDirect; Aug 27, 2010 at 1:40pm.
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Old Aug 29, 2010, 8:54am   #33
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Re: Spreadbetting Company reviews for use with Forex Net Trap

Has anyone tried Intertrader for the £500? Unless I've completely misunderstood, I'd have to place so many trades to qualify I would be overtrading?

Last edited by me1234; Aug 29, 2010 at 10:51am.
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Old Sep 2, 2010, 12:04pm   #34
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Re: Spreadbetting Company reviews for use with Forex Net Trap

G'day Ladies & Sirs,

I'd just like to place a few comments that might be of help to those who are dithering about which platform/broker to use and may also help clear up a bit of confusion.

Traditionally, I have always used IG to place my trades. However both the slippage and the often considerable delay in executing orders is totally unexceptable!

I much prefer an MT4 platform for both charting and placing trades. However, the traditional MT4 platforms (eg Alpari who I have used extensively and are excellent) will not deliver "price per pip" in the same way that Spread Betting platforms (such as IG) deliver.

For example, if your trade makes +50pips on the GBP/USD and you had placed £1 per pip, you will NOT get £50 profit. This is because the trade will be converted to the exchange rate of the GBP/USD at the time. So +50 pips profit would make you £32.42 based on a recent exchange rate of the GBP/USD. Now that's fine if you're happy trading that way and are happy with the conversion that takes place.

I have opened a demo with Smart Live Markets who WILL allow you to trade "price per pip" on an MT4 platform (as previously mentioned by Mark). So, you CAN place £1 per pip on a +50 pip trade and get £50 profit! Again, as Mark has mentioned, I think SML are the first brokers to offer traditional spread betting on an MT4 platform. You will notice that the currencies are displayed for example as GBP/USDSB (with SB added).

For those not familiar with an MT4 platform, I strongly suggest you start a demo account and you will soon see that it wipes the floor with IG in terms of NO slippage (96% of the time) and almost INSTANT execution of your order! I am extremely happy with SML for all the reasons mentioned above!

Hope that is of some help.

Regards,
MD

Last edited by MikesDirect; Sep 2, 2010 at 12:16pm.
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Old Sep 2, 2010, 5:26pm   #35
 
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Re: Spreadbetting Company reviews for use with Forex Net Trap

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Originally Posted by MikesDirect View Post
G'day Ladies & Sirs,

I'd just like to place a few comments that might be of help to those who are dithering about which platform/broker to use and may also help clear up a bit of confusion.

Traditionally, I have always used IG to place my trades. However both the slippage and the often considerable delay in executing orders is totally unexceptable!

I much prefer an MT4 platform for both charting and placing trades. However, the traditional MT4 platforms (eg Alpari who I have used extensively and are excellent) will not deliver "price per pip" in the same way that Spread Betting platforms (such as IG) deliver.

For example, if your trade makes +50pips on the GBP/USD and you had placed £1 per pip, you will NOT get £50 profit. This is because the trade will be converted to the exchange rate of the GBP/USD at the time. So +50 pips profit would make you £32.42 based on a recent exchange rate of the GBP/USD. Now that's fine if you're happy trading that way and are happy with the conversion that takes place.

I have opened a demo with Smart Live Markets who WILL allow you to trade "price per pip" on an MT4 platform (as previously mentioned by Mark). So, you CAN place £1 per pip on a +50 pip trade and get £50 profit! Again, as Mark has mentioned, I think SML are the first brokers to offer traditional spread betting on an MT4 platform. You will notice that the currencies are displayed for example as GBP/USDSB (with SB added).

For those not familiar with an MT4 platform, I strongly suggest you start a demo account and you will soon see that it wipes the floor with IG in terms of NO slippage (96% of the time) and almost INSTANT execution of your order! I am extremely happy with SML for all the reasons mentioned above!

Hope that is of some help.

Regards,
MD
Ah-ha..........you sussed in the end Mike!

SLM are now my default "School Holiday" period broker due to MT4 and 2 pip spread and the fast exection benefits. If they had a java based mobile app I would use them 100%. I especially like the way I can place open or order transactions within 2 pips or less of the market price, closer than IG and miles closer than the ETX / WWS 5 pips min distance.

However come next week due to being on the road daily doing the school run from 8am to 9am it will be back to IG for the mobile app. It's a shame becasue I love the IG platform and functionality, it's just the slippage issue.

M
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Old Sep 2, 2010, 9:20pm   #36
 
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Re: Spreadbetting Company reviews for use with Forex Net Trap

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Ah-ha..........you sussed in the end Mike!

SLM are now my default "School Holiday" period broker due to MT4 and 2 pip spread and the fast exection benefits. If they had a java based mobile app I would use them 100%. I especially like the way I can place open or order transactions within 2 pips or less of the market price, closer than IG and miles closer than the ETX / WWS 5 pips min distance.

However come next week due to being on the road daily doing the school run from 8am to 9am it will be back to IG for the mobile app. It's a shame becasue I love the IG platform and functionality, it's just the slippage issue.

M
SInce the start of the Summer holidays Ive been forced to use IG for the mobile app - and to be fair to them, the slippage issue, has not reared it's head for a good while now, not for a few weeks for me, and I suspect everyone else as there's been no complaints on the min forum daily thread. Perhaps they have cleaned up their act? We'll see as the Autumn moves on and trade volume steps up as people return off holidays.
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Old Sep 3, 2010, 6:34am   #37
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Re: Spreadbetting Company reviews for use with Forex Net Trap

Issues with order distance and slippage is one of the reasons why I prefer to trade "instant entry" NT variants such as INT.

I currently use ETX and get no slippage or performance issues whatsoever.

I must admit though MT4 is a nice platform and if you're entering the market using orders I suspect MT4 is considerably better than most of the pure SB platforms.
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Old Sep 3, 2010, 8:26am   #38
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Re: Spreadbetting Company reviews for use with Forex Net Trap

Goldfinger

How often do you find the market turns against you with your instant entry? It sounds from your posts as though you make your +30 almost every day?
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Old Sep 3, 2010, 8:55am   #39
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Re: Spreadbetting Company reviews for use with Forex Net Trap

Its days like today when a few pips sliappage n IG cost you more, can turn a small loss into a profit.

How hard is meta trader to learn?

Is there one version of this used by all s/b or different companies have thier own versions?

Thanks
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Old Sep 3, 2010, 9:54am   #40
 
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Re: Spreadbetting Company reviews for use with Forex Net Trap

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Goldfinger

How often do you find the market turns against you with your instant entry? It sounds from your posts as though you make your +30 almost every day?
Come on SC , this is a bit of a nieve statement! My spreadsheet is there and also Forextester can be used manually for testing anything.

30INT40 is interesting and is having a good run as is INT, but what do you think happens on VNT no trigger days? Any "Instant" order is pretty much gaurenteed a -30 pips or -40 pips.

Also the Instant systems do have bad runs too and hurt more than VNT variants when these appear due to the lack of safety stop. From Jan to May 2010 INT was pretty bad compared to safety stop variants as it had a good few runs of entering into a loss making trade, or entering into a trade for a loss that VNT triggers later only around 8am.

But it may be a great variant. The only way to know is to sit down for a fair few hours and work it out.

M
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Old Sep 3, 2010, 8:02pm   #41
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Re: Spreadbetting Company reviews for use with Forex Net Trap

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Come on SC , this is a bit of a nieve statement! My spreadsheet is there and also Forextester can be used manually for testing anything.

30INT40 is interesting and is having a good run as is INT, but what do you think happens on VNT no trigger days? Any "Instant" order is pretty much gaurenteed a -30 pips or -40 pips.

Also the Instant systems do have bad runs too and hurt more than VNT variants when these appear due to the lack of safety stop. From Jan to May 2010 INT was pretty bad compared to safety stop variants as it had a good few runs of entering into a loss making trade, or entering into a trade for a loss that VNT triggers later only around 8am.

But it may be a great variant. The only way to know is to sit down for a fair few hours and work it out.

M
I believe INT is still the best performing variant overall since 17 May, if all variants are scaled back to 2% MM of VNT, which is surely the most objective if you want to directly compare one system against another in the spreadsheet.

Mark I believe you're currently completing your spreadsheet data for trades before 17 May? So maybe INT performed badly before then, I don't know. I only invented it in June but since then it's been a pretty consistent performer.

Anyway, I'm pretty convinced by the instant entry approach so far, and I'm now paper trading 8 different INT-based variants daily. Will post more info about it all tomorrow.
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Old Sep 3, 2010, 9:09pm   #42
 
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Re: Spreadbetting Company reviews for use with Forex Net Trap

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I believe INT is still the best performing variant overall since 17 May, if all variants are scaled back to 2% MM of VNT, which is surely the most objective if you want to directly compare one system against another in the spreadsheet.

Mark I believe you're currently completing your spreadsheet data for trades before 17 May? So maybe INT performed badly before then, I don't know. I only invented it in June but since then it's been a pretty consistent performer.

Anyway, I'm pretty convinced by the instant entry approach so far, and I'm now paper trading 8 different INT-based variants daily. Will post more info about it all tomorrow.
You may be shocked but scaled back to 2% MM for 4th Jan to 31st May 2010 INT is ranked 12th! VNT is 3rd. HNT40 is 13th!!

Just shows how the market has changed it's actions since June. Hence my previous comment of increasing the SL10 pips but TP only 5 pips over INT might result in overall worse performance for 2010 overall due to an awful lot of stopouts before June 2010.

You have to remember from "helpers" contributions I have ALL the 2010 RH weekly emails so know all the daily trades / No trades / No trigger etc and are now all in a spreadsheet.

And I'm pretty sure if 30INT40 is scaled back to 2% MM it will be little better than INT, but like HNT40 may be better on pure pips for 2.67% MM.

My educated guess is that INT 30/30 (30INT30) however you want to say it, would be a better performer in pure pips and for 2% MM.
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Old Oct 3, 2010, 2:11pm   #43
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Re: Spreadbetting Company reviews for use with Forex Net Trap

Just wondered whether any of you have any experience trading Forex "properly", e.g. not spreadbetting but trading lots from a non-SB provider such as FXCM or ALPARI?

Reason I ask is that I'm interested in the income tax implications if and when I ever get to the point where I can make a living from trading and can give up the day job. I think if you're making a living income from forex alone then you'd have a job persuading HMRC to let you continue to pay no tax on your income, even though its from spreadbetting which is technically tax-free. In this situation, if you're gonna have to pay income tax anyway, I'm thinking it probably makes more sense to trade forex "proper" (lots or mini-lots), and take advantage of the better spreads and fewer slippage problems that these non-SB providers offer?

Any thoughts or experience on this anyone?
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Old Oct 3, 2010, 3:20pm   #44
 
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Just wondered whether any of you have any experience trading Forex "properly", e.g. not spreadbetting but trading lots from a non-SB provider such as FXCM or ALPARI?

Reason I ask is that I'm interested in the income tax implications if and when I ever get to the point where I can make a living from trading and can give up the day job. I think if you're making a living income from forex alone then you'd have a job persuading HMRC to let you continue to pay no tax on your income, even though its from spreadbetting which is technically tax-free. In this situation, if you're gonna have to pay income tax anyway, I'm thinking it probably makes more sense to trade forex "proper" (lots or mini-lots), and take advantage of the better spreads and fewer slippage problems that these non-SB providers offer?

Any thoughts or experience on this anyone?
Yes, but not sure how it would fly with HMRC. I have also thought about this but it is possible for me to carry on with my self employed work but limit the business I take on once I have earned above £7k +£1k (10k +£1kin a few years).

This means The HMRC will get some tax income from me but once I am over £1k above the tax free threshhold would limit the self employed work to say 1 job a month and then trade with the extra time.

TBH loads of "self employed" people I know run a standard practice of only banking jobs paid by cheque / BACS and put cash job receipts straight into the "safe".

Then if at year end the "declared" payments are not £1k profit above the tax free limit they let through enough of the undeclared cash jobs to raise the profit enough to give £1k of taxable income then keep the rest back as cash.

It seems the ethos is as long as you pay the HMRC some tax they don't look into your affairs.

Obviously they have to plan ahead a few years for mortages because they need to declare "all" profits to show the right level of income to get the mortgage but revert once the house is bought.

M
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Old Oct 3, 2010, 4:09pm   #45
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Re: Spreadbetting Company reviews for use with Forex Net Trap

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Yes, but not sure how it would fly with HMRC. I have also thought about this but it is possible for me to carry on with my self employed work but limit the business I take on once I have earned above £7k +£1k (10k +£1kin a few years).

This means The HMRC will get some tax income from me but once I am over £1k above the tax free threshhold would limit the self employed work to say 1 job a month and then trade with the extra time.

TBH loads of "self employed" people I know run a standard practice of only banking jobs paid by cheque / BACS and put cash job receipts straight into the "safe".

Then if at year end the "declared" payments are not £1k profit above the tax free limit they let through enough of the undeclared cash jobs to raise the profit enough to give £1k of taxable income then keep the rest back as cash.

It seems the ethos is as long as you pay the HMRC some tax they don't look into your affairs.

Obviously they have to plan ahead a few years for mortages because they need to declare "all" profits to show the right level of income to get the mortgage but revert once the house is bought.

M
There is a thread on t2w dedicated to the tax implications of spreadbetting. There has always been debate on this subject. Localy some tax offices along with some accountants say that if trading for a living from spreadbetting is taxable, but the vast majority say that tax is not payable under any circumstances from spread betting. I have taken specific advise of www.traderstaxclub.co.uk, and they agree with this (no tax or N.I.). That said I still work one day a week so that I can still fill in a tax return and avoid undue attention as it's hassle I could do without, even though I effectively trade for a living. (There is no requirement to even list SB income on a tax return as it is gambling)

There does, however, seem to be a general concensus of opinion that HMRC would ultimately back down, as there is no way they would ever want an official court ruling that betting of any sort is taxable. If this were the case, then anyone betting would be able to offset their losses against their regular income. As the vast majority of spreadbetters lose along with gamblers of any sort, then this would potentially cost the revenue billions. So, ultimately, I think we will be left alone.

Anyone worried about this should just use a regular broker such as alpari. If you have a regular income, then you can still use up your £10,100 capital gains tax allowance. Also, you could open an account in a partners name and trade under that. On that basis, there would be no need to use a spreadbetter until you are earning more than £20k a year from trading. This is what I did before moving to SB.

W.
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