Spread Betting

Hi

Im new to spread betting, infact i dont really know what it involves.

Is this how it works, if i can see a stock is about to go down, lets say ive seen a dark cloud cover, stochastics are about to go down too, i just simply bet that the stock will go down, and i make tax free money?

It surely cant be this simple, so can someone put me straight please lol.

Thanks

Matt

GameOver22 said:

Hi

Im new to spread betting, infact i dont really know what it involves.

Is this how it works, if i can see a stock is about to go down, lets say ive seen a dark cloud cover, stochastics are about to go down too, i just simply bet that the stock will go down, and i make tax free money?

It surely cant be this simple, so can someone put me straight please lol.

Thanks

Matt

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I see you live in Essex so you will know what the footsie is. For example sb,s are quoting 5527 at 5529, this was the closing bid and offer for deal4free on Friday. If you think the market is going to drop then you sell at 5529 or buy at 5527 if you think it will rise. For every point it goes in the direction you have chosen to bet your account will rise multiplied by your stake money. So lets keep it simple. You stake £1.00 per point prior to close of business on Friday .You bet that the market will rise. On Monday the market opens down 50 points, your account is now worth £50.00 less than it was on Friday. You can place a stop loss
either when you bet or at any time during the course of the bet. The stop can be as far away from the current quote as you ar comfortable with. Obviously if the market opens up 50 points this is added to your account value. Remember you can place an oco order which is very useful if you want to place a bet then go away and forget about it. OCO stands for one cancels other. Hope this helps , oh almost forgot, be very carefull.

It is that simple!

Wow, thanks Reuben!

Im still very confused. Does it matter what the spread is? If theres any spread at all! Can i just say, ok this stocks going down, im going to put 100 on it going down?

Using candles, ide surely make good money spread betting, wouldnt i? Make more than i lose? Am i betting against the "bookie"? Or who am i betting against? Where do i bet that wont limit my account if i keep winning?

Thanks

Matt

Gameover22 have a read of the firms dealing handboook online at their site.. most give a few examples of how you can place a bet etc, brief details of the workings on it.. Remember though the vast majority lose, so whilst it may appear simple you'll need to be on your guard continually.

Tweezer tops and dark cloud covers with stochastics would be almost 95% accurate though?

GameOver22 said:

Tweezer tops and dark cloud covers with stochastics would be almost 95% accurate though?

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If it was only that simple...

Will you be holding positions overnight? or daytrading - in that you will open and close on the same day?

Do you have access to or knowledge of fundemental data relating to companies you will be trading?

Do you have a particular stratergy that you have backtested?

Please don't take this the wrong way...i would encourage everyone i know to trade, i can't think of a better way to make a living/extra income, but do do do take care particularly with spreadbetting co's because if you are going to be placing large bets you want the best possible spread (i guess that can also depend on your trade timeframe too).

Hello again gameover22
There is something puzzling me about your questions. If you know nothing about trading, where did you learn about dark clouds and stochastics?

GameOver22 said:

Tweezer tops and dark cloud covers with stochastics would be almost 95% accurate though?

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They might be I have no Idea, but people can behave in odd ways when they put money on the line...

Don't think of the money,just what the market is telling you.

GameOver22 said:

Tweezer tops and dark cloud covers with stochastics would be almost 95% accurate though?

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Tweezer tops? Sounds like you have an edge over me- not difficult!

Seriously, watch your trade size. I started at 50p per point with Finspreads- if you take the course they will let you start lower, but 50p should be safe enough if you feel ready. The important thing to remember is that if you are losing points it is better to be at 50p than even 1 pound. You'll last a lot longer when you are making mistakes. Also remember that 50p is 50p. Don't say "Oh, what the hell, it's only 50p !" Take a 50p loss very seriously, pretend it's 50 quid.

Don't know what you want to trade but, if it is UK stocks I would stick to Footsie100 for everyday stuff., the spreads are better.



Split

I never said i know nothing about trading, i said i know nothing about spread betting.

I know how to trade shares using candlesticks, stochastics, volume, and trend lines.

GameOver22 said:

I never said i know nothing about trading, i said i know nothing about spread betting.

I know how to trade shares using candlesticks, stochastics, volume, and trend lines.

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Sorry, misunderstood. I've done day trading with IB but lost money at it. Lots are against spreadbetting but I believe that it is OK for swing and position trading. No good for day trading-I think that is generally accepted. The no tax status plus low bet requirement is what makes it attractive and I have made some good trades so know that it works, but it can be very difficult in the first hour with gaps of over 50 points sometimes. Spreadbetting companies widen the gaps whenever there is a spike, especially in the first minutes and it is very difficult for an overnight trader to get out with a profit, then. I have done it, 55 points with RB way back in March, I think, but in October I was in AUN and closed frustrated with a loss of 8 points when, probably, trading in IB would have shown a profit of 40, at least. There is the rolling bet system, which means that you are out of the trade after hours, but you can still be caught in the gap up or down on the open.

What I said about Finspreads 50p per point is worth looking into until you get the feel of how they work the spread and bias. By the way, their spread on Dow and FT is 2 points.

I'm not banging the drum for them- they are the only ones I know! Hope that helps.

Good Luck

Split

GameOver22 said:

I never said i know nothing about trading, i said i know nothing about spread betting.

I know how to trade shares using candlesticks, stochastics, volume, and trend lines.

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Good morning

If you know this and you are successful then instruct a sb company in the same way as you instruct your broker. Sell or buy a a share quote as per the direction you have decided that share is going. Use Whatever amount of money you can afford per point move. Place oco orders if you are away from your screen. Ask if they accept controlled risk bets, this will cost you a premium but at least you have a guaranteed stop . A trading friend of mine sb's shares at £400.00 per point over long periods ie 3 - 6 months. He is very successful.
There is nothing complicated about spread betting , the difficult part is the part you already understand,
recognising a chart pattern which results in a profit.
I trade ful time mainly the Euro Fx futures. I trade using both a conventional broker and an sb co.
I use Esignal advanced plus Hawkeye which costs me $350.00 per month.
I trade up to 10 times per day on this market.
I also trade the Footse, S&P, Dow and sometimes the Dax all on longer term sb positions.
I never trade shares.
Regards.

Hawkeye software

reuben

I am glad to notice that your are using Hawkeye: this probably because you are pursuing (in a much more advanced way) the same analysis philosophy as myself.

I am in fact considering to buy Hawkeye for swing trading stocks and indexes (3 to 10 day period).
Can I know what you think of this software; is it effective, honest (no backward adjustments on chart analysis if the given signal were wrong ) consistent etc.. ?

Thank you for assistance

Regards.

Hawkeye is very good in trending markets. I use it almost exclusively on the euro dollar futures. It will also work well on forex. I trade intraday using a 200tick and 89 tick chart set up. I also use the cci indicator set at 100. Lastly I trade only at specificic times of the day to avoid being whipped. You get the software from esignal for $150 per month which is a gift if used correctly. I have no experience in using it over longer time frames but it looks good on the historical charts.
Hope this is useful.

reuben said:

Hello again gameover22
There is something puzzling me about your questions. If you know nothing about trading, where did you learn about dark clouds and stochastics?

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That is exactly what I was thinking . . . . .. .

And . . . .. .can we please see your back-testing for your 95% success on this trading strategy

Also please be aware that in spreadbetting the quote is wider than on the exchange, and thus a 1p spread on a UK share could easily become a 5-6p spread on a sb transaction, does your strategy still look ok?

rgds and good luck

I did not claim 95% success. The good thing about Hawkeye is the money management. It tells you where to place a stop followed by telling you when to move the stop. In a choppy market you will have a large number of failed trades BUT your account will always be safe and when you hit a trending market you will take a large number of points. Also the indicators have a facility to add to a winning position which results in a spectacular increase in profits. Check their website for details. To be fair I have only had the system for 3 months but it is the best I have come across in 20 years. There are other systems out there which I have not tried so this is purely my own view. I do not use it for spread betting , I use it on my electronic trading futures account. Start with say £20000, follow the rules exactly. Use it on the currencies. Remember to look at the fundamentals as well. Look at the long term trend so if the long term is up buy the dips and ignore the sell signals . Do not get upset if a sell signal in this scenario results in a good profit missed. It does not matter. Once the long term changes then you change. I never back test.
I used to when using Trade Station but found that any system I created would eventually BLOW UP and cost a lot of money. Hawkeye is not a system. It is a set of indicators. Never forget this most important point. Always check the CCI before entering a trade.
Feel free to answer with your questions.
Kind regards.

Hi Matt,

Try the free bet offer by WorldSpreads. Their trading platform is sort of 'under construction/development' but you lose nothing by taking up the free 3 pounds per point offer on the FTSE futures. More info here http://www.trade2win.com/boards/showthread.php?t=18619

Best of luck,

Hung

With my winnings from last months competition @ trade2win. £500

http://www.trade2win.com/competition/

UP £422 on my first weeks spreadbetting. Beginners Luck!