Spreadbetting the Indices

Hi there

Just joined the forum and thrilled to see the wealth of information that is here! I've been EOD trading the FTSE stocks for around 6 months now and interested to start trading the indices themselves, particularly the FTSE. Strategy is all via technical analysis.

Would be interested to hear from any of you who trade these EOD. I'm currently in the US, so its extremely hard to day trade!

Jen said:

Hi there

Just joined the forum and thrilled to see the wealth of information that is here! I've been EOD trading the FTSE stocks for around 6 months now and interested to start trading the indices themselves, particularly the FTSE. Strategy is all via technical analysis.

Would be interested to hear from any of you who trade these EOD. I'm currently in the US, so its extremely hard to day trade!

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Hi Jen,

I trade the FTSE and occasionally the Dow... Without wanting to sound dumb...what do you mean by trading them EOD ??

My FTSE\DOW strategy is purley based on technical analysis of the charts. I spread bet the FTSE through Capital Spreads....They offer a 1point spread on this market.

I find the indicies are not as volatile as most currency and commodity markets, with a 1 point spread profit taking becomes just that little bit easier.

Hi Ceydababy

Sorry, should have been clearer, EOD means end of day trading.

Being in the US, means I have to stay up quite late waiting for the UK markets to open. I tried it once and found it was really tough to give it 100%. Having said that you mention that you trade the Dow, maybe that's something I should look into. Currently I only trade the FTSE 350 stocks themselves but am finding it has very slow gains!

When you say that your strategy is via technical analysis of the charts, do the same principals apply as what you would use for stocks themselves? Or do you use a different analysis for indices?

Thanks for the tip on Capital Spreads, I will check them out!

Jen said:

Hi Ceydababy

Sorry, should have been clearer, EOD means end of day trading.

Being in the US, means I have to stay up quite late waiting for the UK markets to open. I tried it once and found it was really tough to give it 100%. Having said that you mention that you trade the Dow, maybe that's something I should look into. Currently I only trade the FTSE 350 stocks themselves but am finding it has very slow gains!

When you say that your strategy is via technical analysis of the charts, do the same principals apply as what you would use for stocks themselves? Or do you use a different analysis for indices?

Thanks for the tip on Capital Spreads, I will check them out!

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Hi Jen

I apply the same trading principles (system) to FX, Futures, Indicies and Shares. I generally manage an 85% hit rate.

I know what you mean about being in the States, my gfriend lives there and when I am over there the FTSE is a pain in the ass because of the time difference between Illinois and London. I generally trade the Dow when in the States.

I don't really find that much action on or before the London Close. The London open is my preferred time.

In terms of trading stocks it is something I have never really looked in to. I know some guys who spreadbet the FTSE100 and FTSE 250 stocks and get some very good results but their holding period generally is a lot longer than I like to be in the market for. I find for intra day trading the spreads offered by most firms is not inducive to trade stocks profitably. I agree with you gains are painfully slow and I really look to take a quick turn, taking approx 20 points from the market a day.

I don't hold positions over news often these can be catalysts to change trends. I literally base all trading decisions from the chart.

If you have never traded indicies before I would recommend cutting your teeth on the FTSE. There is generally a lot less volatility, but you will find a lot more gains than trading FTSE 350 stocks.

How are you trading FTSE 350 Stocks ? Techincally ? Fundamentals ? or a mixture ??

Hi Ceydababy

Sounds like you're doing really well on the indices and thanks for the tips! It looks like whilst I am over here, I need to start investigating the Dow!

I'm currently trading all via technical analysis. I don't often hold a position for more than a few days, so the fundamentals aren't as important to me. From the small amount of time I have spent looking at the indices, I find it harder to see patterns forming than with the stocks themselves.

I'm using Sharescope Gold for all of my technical analysis (although thinking of upgrading to the next version). What do you use?

Jen said:

Hi Ceydababy

Sounds like you're doing really well on the indices and thanks for the tips! It looks like whilst I am over here, I need to start investigating the Dow!

I'm currently trading all via technical analysis. I don't often hold a position for more than a few days, so the fundamentals aren't as important to me. From the small amount of time I have spent looking at the indices, I find it harder to see patterns forming than with the stocks themselves.

I'm using Sharescope Gold for all of my technical analysis (although thinking of upgrading to the next version). What do you use?

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Hi Jen,

I use the charts that come free with Capital Spreads ! To be honest they work for me. I have been recommended E Signal charting by Trader Tom (www.tradertom.com) However, I don't really feel I need to invest when I can use the charts provided free.

What time chart do you use ?

Personally I use 2min / 5 min dependent on market. I generally find a support/resistance based system works on the indicies. Using a 2 minute chart especially you can take some nice points relative to the stop you have in play (usually 5-6 points).

Who are you trading through at the moment ?

What kind of patterns do you look for ?

I generally don't look for double tops, head and shoulders, pennants, flags etc etc. I prefer working from a straight support and resistance based system and find this works very nicely on the indicies.

Hi Ceydababy

I'm still quite new to the game, so still trying to find my feet. My trading platform is Echelon, but the graphs on there are quite basic line graphs.

Most of the time I use end of day data via Sharescope but have been thinking up upgrading to get intraday data. At the moment, for this I use ADVFN which offers 1 or 5 minute charts. Again, have only just started to explore the indices so I think I'll take your advice on time frames. When you say that you use 2/5minutes based on the market. What differentiates which time frame you will use?

In terms of patterns, I find triangles and consolidation breakouts seem to work quite well for me. If I see strong double tops or bottoms, I will trade those also, and like you the ever reliable support and resistance also. Not so much flags, they don't seem to be as obvious to me!

Hi Jen,

I find that the free charts from most spread betting companies do the job in terms of trading, and they are free. If I am trading something more volatile I will use a 5 minute chart and something that is a little bit slower I use the 2 minute charts. For example Brent Crude I will use a 5 minute chart and the FTSE I use a 2 minute chart.

In terms of technical studies you will get on the free charts they really are quite extensive. You can draw trend lines, Fibonacci Studies, RSI, MACD, Bollinger Bands.....the list goes on.

If I am trading the dow I would generally either use a 2 or 5 minute, dependent on my mood !

Jen,

Have you thought of trying the SP500? I mention this because of your time zone. Trading Europe must be a bit hard on the shuteye for you! Fins has a 0.6 spread but, maybe, you could get better elsewhere.

Split

Hi Ceydababy

Unfortunately, Echelon doesn't provide the most interactive charts. They are a simple line chart (and sometimes the wrong ones!), and aside from charting over 1 day, 2 days etc, there are no other functions available. So ADVFN is compensating for this at the moment and its only costing me £5 a month.

Thanks for the tips on timeframes, you've inspired me to start trading the Dow! But before I go jumping to the ocean, I think I better sit back and watch for a while. I have it up on my screen now and after doing end of day trading for so long, it all seems to be happening so fast!

Splitlink - thanks for the advice. It's definitely something I have thought about (also another reason for updating Sharescope as my current version doesn't have all the S&P stocks). Is this something that you trade yourself?

Jen said:

Hi Ceydababy

Unfortunately, Echelon doesn't provide the most interactive charts. They are a simple line chart (and sometimes the wrong ones!), and aside from charting over 1 day, 2 days etc, there are no other functions available. So ADVFN is compensating for this at the moment and its only costing me £5 a month.

Thanks for the tips on timeframes, you've inspired me to start trading the Dow! But before I go jumping to the ocean, I think I better sit back and watch for a while. I have it up on my screen now and after doing end of day trading for so long, it all seems to be happening so fast!

Splitlink - thanks for the advice. It's definitely something I have thought about (also another reason for updating Sharescope as my current version doesn't have all the S&P stocks). Is this something that you trade yourself?

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Good for you Jen ! Just wait for the cash to come rolling in ! What company are you trading through at the moment ??

I'm using Echelon. Very user friendly interface, but a bit limited on the data!

Jen said:

I'm using Echelon. Very user friendly interface, but a bit limited on the data!

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what are their spreads like ?

Jen said:

Hi Ceydababy

plitlink - thanks for the advice. It's definitely something I have thought about (also another reason for updating Sharescope as my current version doesn't have all the S&P stocks). Is this something that you trade yourself?

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No, I live in Spain and work during US trading times. European markets for me, except on odd holidays, when I have tried the SP. The margin is less, too, by the way.

Split

Splitlink said:

No, I live in Spain and work during US trading times. European markets for me, except on odd holidays, when I have tried the SP. The margin is less, too, by the way.

Split

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Hey Split !!

Thanks for opening my eyes to the S&P. It works for me as well as the FTSE. S&P is now my US index of choice !! Awseome

Thanks again

Mark

ceydababy said:

what are their spreads like ?

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Spreads vary but generally you are looking at a 2 point difference between buy and sell. The DOW for example currently has a 4 point difference between buy and sell.

Let us know how you go with the S&P!

Jen said:

Spreads vary but generally you are looking at a 2 point difference between buy and sell. The DOW for example currently has a 4 point difference between buy and sell.

Let us know how you go with the S&P!

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What is their web address ? I was looking for echelon and got something totally different

ceydababy said:

What is their web address ? I was looking for echelon and got something totally different

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Hi there, yeah it doesn't come up in web searches, but their website is: www.echelonwm.com

Based in Glasgow, phone is always answered promptly when you need to call!

Hi, you guys, today's Labour Day and a holiday in Spain so I thought I'd have a try with S&P500. I'm short and into profit quite quickly.

Split

Hello Jen,
Like you I trade the 350 shares. I use Sharescope ADVFN and Echelon.I'm not a happy camper at the moment as Echelon have upped their margin requirement to 75% with no notification that they were doing so.The margin requirement applies to shares outside the Footsie 100. I find that my exposure has increased by 600% so I have to close some positions on Tuesday which were just starting to develope.I am considering moving my account but most spread betting companies seem to have some drawback.