US stocks - Spread Betting

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Old Jun 17, 2009, 10:38pm   #1
Joined Jun 2009
US stocks - Spread Betting

Hi guys,

I just start trading, and I am trading US stocks in spread betting, but experiencing big slippages and big spreads. I use IG Index. I usually trade from 2 and 5 min, but is almost impossible. Almost every I get slippage. Any suggestions please.

Thanks guys, appreciated
Roman
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Old Jun 18, 2009, 12:58am   #2
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My suggestion is to not trade US stocks via spreadbetting on any time-frame less than the hourly, any lower and you want the very liquid stocks and ensure to choose ones with low spreads (Usually meaning high liquidity)...
Trading Us stocks on a 2-minute chart via spreadbetting is not going to work.
1. The moves aren't large enough to cover the spread if you are trading back and forth volatility.
2. The spreads are massive, you'd have to get the movements right big time and a loser would be too big due to the spread.
3. US shares on igindex massively fluctuate in spread sizing which sucks.
4. Slipperage will occur.
5. In markets that aren't heavily traded, on igindex its easy for them to widen the spread massively to accomodate for price movements they aren't hedged against, they can't do this for example on the FTSE100 because so many people trade it and they'd lose their customers!

Interactivebrokers.co.uk - Trade the direct market US shares (Real and best execution, real smaller spreads, no funny business).... Look at the average spread for the stocks your trading and keep this in mind and monitor the size of price swings on the 2-minute chart and ensure that the spread won't destroy any profit. This requires margin and $25,000 to day-trade...

If you can't do that and your serious about trading then i recommend moving on from US stocks until you can... I use Igindex to open swing-trades using intra-day setups for entry (only on small spread/highly liquid stocks) and my dad does a similar thing on Interactive brokers and hes execution, price and spread really beats mine... We'll be up 0.30pence for example in the same trade and i'll be breakeven, he'll be exiting for profit.

If you want to day-trade... Learn to trade forex or indices, stocks i find to be generally easier (but less liquid) because they aren't so complicated, there aren't as many reasons and forces for their momvements intra-day, its usually straight forward in a lot of stocks... Where as indices fluctuate with big volatility, i still recommend them though, from my experience i've learnt most from trading them and then when i started day-trading stocks it was extremely easy going

Hope that krap helps
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Old Jun 18, 2009, 10:21am   #3
Joined May 2008
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Originally Posted by roman123 View Post
Hi guys,

I just start trading, and I am trading US stocks in spread betting, but experiencing big slippages and big spreads. I use IG Index. I usually trade from 2 and 5 min, but is almost impossible. Almost every I get slippage. Any suggestions please.

Thanks guys, appreciated
Roman
You need to pick a new timeframe that has more of a range if slippage is killing you. . have to be scalping.That will mean re-assessing how you analyse positions and moves and also that you should only trade when your target should absorb any slippage-which should be treated as a cost and factored in because it not going anywhere. You could also try to account for average slippage when you plan your trade.
Ask around on the forum for any ideas on which brokers have the lowest slippage on average.
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Old Jun 18, 2009, 11:52am   #4
 
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Originally Posted by Aaronmalins View Post
Ask around on the forum for any ideas on which brokers have the lowest slippage on average.
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Old Jun 18, 2009, 11:54am   #5
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Originally Posted by new_trader View Post
I know. It's a f*cking hunting ground nowadays. I just put up with it but my account is only small so i'm not really affected.

PS. Do you really think brokers don't add to "slippage" on (esp on non-dma accounts) or did you just want an excuse to laugh at me?

Also how much do you think the guy is moving if he's just started?

Edit: Price + spread = what bids/offers being taken? The one that's the most beneficial for the client? Or maybe they just snap up all the physical shares for you and go through all the tax and paperwork lark on acquisition and disposal for a couple commission. I'll bet its the one that's most beneficial for the broker to fill i.e unhedged positions held by other clients. Therefore slippage should vary from broker to broker when spreadbetting. Or am I wrong. I'm always willing to learn.

Last edited by Technically Fundamental; Jun 18, 2009 at 12:51pm.
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Old Jun 18, 2009, 11:59am   #6
 
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Roman,
If you want some sensible thoughts on this feel free to email me - click on my name top left of the post and click on send email (NOT PM).
Richard
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