Smart Live Markets - Spread Bet on MT4

[Tired_Of_Conmen]

:help:

Oh.... sorry I misunderstood your previous post regarding GFT sounded like you were praising them...?

 

[Ross Spur]

Yes that's an idea thanks for the suggestion. The only problem is then having to adjust the position sizing between the daily cash and then the futures contract quote if I wanted to get the math spot on. Normally the cash moves further than the futures price and the futures have the financing premium built into the wider spread - so all this would have to be accounted for in the stake sizes. It's more to think about/calculate whilst I'm doing a busy day job - not ideal.

There are ways, but in reality I think I just want to stick with one SB broker who allows me to hedge on any chart. It keeps everything nice and simple. That's the simplicity I want. I can forgive other mistakes/short-comings along the way as like BS says nothing can be perfect in this game, but that said I do need the basic needs taken care of (honesty, fair fills, etc). Otherwise you're swimming against the tide before you've even made a trade.

In a nutshell: MT4, not out to con us, fair fills, minimal problems which are explainable and genuine mistakes on their part, small price increments in the stake (to keep MM accurate) and hedging facility - all wrapped up in one broker. I'm hoping still its gonna be SLM.

TOC

I don't think the cash and future move different amounts -- the SB 'cash' quote is just the underlying future, skewed for 'fair value'.

Don't get me started on GFT because my brain might explode.

 

[Tired_Of_Conmen]

I don't think the cash and future move different amounts -- the SB 'cash' quote is just the underlying future, skewed for 'fair value'.

Don't get me started on GFT because my brain might explode.

Yeah it's that price differential that will throw my money management out somewhat and I've worked too hard over the years trying to get it right LOL! I take 10 years to do a 12 month job but that's me I'm afraid. Hopefully will all pay off in the end.

Anyway, yes that is one way of "hedging" if you can't hedge you are right.

And ok enough said about GFT ... LOL I wont mention them again!!

 

[lovejoy21]

I do not trade FX very often, but isn't 1 point spread on the EUR/USD quite a decent spread?

Yes it is. I'm fairly new to SB but form what I've seen they offer very good spreads on the best known products like the major indicies and EUR/USD for FX. I guess this is the products that newbies are most likely to trade. But when you look at other FX pairs, in particular the non-USD pairs their is big differences in spreads, for example, here is a selection of pairs - I would class all these pair as liquid fx instruments...some more than others but there is no exotics here from my own review here is the average comparable spreads.

Pair Typical non-Sb spread typical SB spread
AU 1.5 2.5
UC 2.5 4.0
GJ 2.5 8.0
GCHF 2.0 8.0
EAUD 2.5 10.0
NJ 2.5 5-12
GNZD 9 25

But I guess the SB firms are competing amongst themselves rather than against traditional FX brokers and they pull in clients with the tax advantage and ease of use and simplicity of spread betting and thus the real competition is just against each other. Plus SB is a UK think so client bases must be much smaller than FX brokers.

 

[lovejoy21]

Yes good point, the SB industry is UK only as far as I know, so their client base will be much less than say FXCM etc.. hence why they are their own seperate industry and act as such.

It would be really handy if you could let us all know how your experiment goes after a few days or whatever, please could you keep an eye on the actual fills/prices with SLM too?

I think as for the tax advantage it boils down to one thing: how much money are you going to win in the markets? I don't like it when people say "oh you don't pay tax on the first £10,000 with real brokers anyway (approx tax allowance in UK - can't remember exact figure) so what the hell you wont make £10k anyway stop dreaming etc" - that's a totally negative attitude!!

I plan to retire wealthy enough one day thanks to trading. That means I need to make more than £10,000!!! So the tax advantage then is HUGE hence why I'm dedicated to SB. If I want to build and account into the £100,000's + then to pay no tax at all is heaven sent.

If people argue that the tax advantage isn't worth it then they're not planning on winning long term and that mentality will make you lose from the start - it's like they want to be losers in this game and don't believe that a professional, disciplined approach to capital preservation and a proven trading model can and will lead to ongoing profits. Add account compounding into the mix and watch it grow over a decade. Time is a huge factor in creating wealth but we all want it in 3 months. I'm so serious about this I gave myself 10 years allowance.

I'm still young enough to dedicate 10 years to this and still then be "young" enough (!) to enjoy my life on the wealth created.

I don't want tax/government dipping it's dirty little hands into my hard earned personal wealth creation only to waste it on art funding for some modern UK city eyesore or bail out the next failing industry with it.

TOC

The 'tax advantage' really comes down to two things:

1. The size of your account and thus the size of your profits (i.e. what tax bracket you fall in)
2. What type of trader you are e.g. if you scalp then the spreads will be a very high cost per trade and would make the tax benefit of SB not worthwhile most likely...whereas if you are a position trader the tax advantage will be much more beneficial

I started trading 5 years ago and used SB first before I started trading FX seriously then I moved away from SB to MT4 based brokers. I'm starting to use SB again because my account is at a size where tax becomes a material amount and I am to SB for the next 12-18 months after which my account (will hopefully) be too large to realistically spreadbet and I'll move back to MT4 brokers but set up more tax efficient arrangements.

I'm currently testing SLM whit a small account (about £1-£4 per bet) so will let you know any other useful things that crop up, the only thing so far was the price feed error, other than that everything has been working as it should IMO.

 

[Tired_Of_Conmen]

I'm currently testing SLM whit a small account (about £1-£4 per bet) so will let you know any other useful things that crop up, the only thing so far was the price feed error, other than that everything has been working as it should IMO.

That's great news, looking forward to hearing how SLM goes for you.

I'm curious as to why to you changed from SB to regular broker after you started taking, in your own words, FX trading seriously? I understand now why you would come back to SB as now the tax saving actually means something of decent value to you - but what made you leave SB in the first place? Spread costs on the non-top majors?

Thanks

 

[Tired_Of_Conmen]

Pair Typical non-Sb spread typical SB spread
AU 1.5 2.5
UC 2.5 4.0
GJ 2.5 8.0
GCHF 2.0 8.0
EAUD 2.5 10.0
NJ 2.5 5-12
GNZD 9 25

WOW!! Some of those are 4 times bigger than the typical non-SB spread!!

Maybe then the best scenario for us SB traders is to find a trading method that uses just the handful of top liquid instruments we can get value on: that's probably the top 4-5 FX major pairs (normally SB brokers offer 1-4 pip spreads on those), the Dow Jones at 1 or 2 points (remember that 1 point on Dow is probably a short lived gimmick?), 1 point FTSE and maybe a 1 point on the DAX but all these European indices basically move the same along with the FTSE most of the time so it's hardly great diversity.

So that gives us SB traders a portfolio to trade of about 6 or 7 instruments.

Anything else and you're probably better off with the real underlying market.

Just my humble opinion!

TOC

 

[lovejoy21]

That's great news, looking forward to hearing how SLM goes for you.

I'm curious as to why to you changed from SB to regular broker after you started taking, in your own words, FX trading seriously? I understand now why you would come back to SB as now the tax saving actually means something of decent value to you - but what made you leave SB in the first place? Spread costs on the non-top majors?

Thanks

Well i stumbled into trading and spread-betting was the obvious way to get into trading...as a newbie spread-betting is certainly one of the most user friendly ways of starting to trade and I mainly traded the indicies...I had no idea what I was doing to be honest...and after going through the usual mu.ti indicator systems I decided to learn more and take learning to trade as a serious business, then I stumbled across FF and that's where I decided to focus on FX trading. I don't know anyone that spread bets over there and most retail traders use MT4 so I followed the crowd into MT4 brokers...MT4 is very user friendly IMO and thus this is the platform on which I developed my own style of trading. As my own account has grown it's then that I thought it would worthwhile to look into SB again...that's when I was looking into the SB part of this forum and stumbled across this thread. I currently use IG, Trade Fair and SLM for spreadbetting but still use Oanda, JadeFX and FxPro too. My aim is to completely migrate over to SB over the course of the next month or so but I need to make some subtle changes to the way I trade to take into account the increased spreads. There's no point shooting for 20 pips on a GJ trade if the spread is 8 pips IMO so I need to make sure that there is enough space on my trade setups to make it worthwhile taking the trade...more so than I would have to do normally.

I see SB as a temporary thing until I grow my account further to a level where SB is too small to be able to accomodate my account size then I'll switch back...but by this time my account will be big enough that I can consider common tax efficient ways of structuring my trading 'business'...anyway I'm droning on now, I'll continue to post here anything I find useful with regards SLM.

No broker is perfect and you have to expect some errors etc to occur...my non-fx brokers are far from perfect but on the whole they are ok and on the whole SLM has been good for so far, I'm not sure what would have happened if I was in short on the GU trade and the price feed error occurred...whether they would refund you for the error?

SLM are attempting to break the mould and think outside the box by offering MT4 for SB...they are obviously trying to attract people like me who don't currently use SB but use MT4 IMO rather than compete with other SB firms...most people who trade FX on SB won't have ever used MT4 so an SB offering MT4 won't mean anything but small/medium account size UK traders who religiously use MT4 but don't spread bet could be attracted to the SLM offering...that's the way I see it anyway, plus by the range of FX pairs they offer they are obviously focusing a lot on being a dedicated FX broker.

 

[lovejoy21]

WOW!! Some of those are 4 times bigger than the typical non-SB spread!!

Maybe then the best scenario for us SB traders is to find a trading method that uses just the handful of top liquid instruments we can get value on: that's probably the top 4-5 FX major pairs (normally SB brokers offer 1-4 pip spreads on those), the Dow Jones at 1 or 2 points (remember that 1 point on Dow is probably a short lived gimmick?), 1 point FTSE and maybe a 1 point on the DAX but all these European indices basically move the same along with the FTSE most of the time so it's hardly great diversity.

So that gives us SB traders a portfolio to trade of about 6 or 7 instruments.

Anything else and you're probably better off with the real underlying market.

Just my humble opinion!

TOC

Yeah, it depends, if you are a position trader and your typical profit on a trade is for example >100 pips then the difference in spreads is low as total cost of the trade compared to the tax savging (depending on what you income is) but if you are only looking for 10 pips per trade for exmaple then the difference in spreads will make a big difference and it would be debatabale as to whether the tax saving would be worth it.

I compiled a spreadsheet on all the pairs I traded over thast month or so, the number of trades (i.e. so I have a % weighting for each pair) and the common spreads for IG, SLM and TF compared to Oanda. When you go out side the 'majors' the spreads are vastly increased for the likes of E/AUD, E/CAD etc...I don't really understand why the spreads are so high, SB firms should surely access the same underlying liquidity providers as normal FX brokers? Anyway as an example of the majors I trade (AU, AJ, EU, EJ, GU, GJ, UC, CJ, UCHF, UJ, EG, GCHF) the average spread across all of these were as follows:

Oanda 1.83
TF 3.73
IG 4.06
SLM 3.58

Other pairs I trade outside of this like E/CAD etc only represent about 5% of my trading so I'll probably not trade these pairs as the difference in spreads is stupidly high, unless I'm position trading them.

I actually found that when I considered the best spread for each pair than SLM was either best or equal best on all of these pairs apart from AU, TF 8 of these pairs and IG only 4.

That is just my way of trying to work out the likely impact of the increased spreads on my trading results. As I said previously I'm entering all trades I take on both SLM and FxPro and Alpari over the next moth via Copy EA tool to get a better gauge to the likely difference in results.

I actually don't trade indicies or commodities that often, although I do use them in my FX analysis (inter-market analysis etc.) but i might start trading them more often ... if I did I'd only be looking to trade Gold, US Light Crude oil and Dow Mini Futures (YM)...and the spreads difference on these pairs between Fxpro and SB is minimal.

But from my lmited knowledge and experience of spread betting, it is ideal for the major indicies and major commodities and major FX pairs as SB firms are marketing to beginners, small traders, newbies etc with the tax free advantage and the ease of use of spreadbetting...calculating a set £ per pi is easier than calculating lot sizes etc. and thus I would have thought that a large % of SB firms clients are new traders who are going to looking to trade the most common and well know instruments e.g. gold, ftse, EU, GU and hence why spreads are good on these pairs as I can imagine they are by far the most commonly trades instruments....and SB firms compete quite hard amongst themselves for having the best spreads on these pairs from what I've seen.

Anyway digressing again spurting non-useful thoughts. I'll post next week my experience's with SLM I've had during the week.

 

[Tired_Of_Conmen]

There's no point shooting for 20 pips on a GJ trade if the spread is 8 pips IMO so I need to make sure that there is enough space on my trade setups to make it worthwhile taking the trade...

...I'm droning on now, I'll continue to post here anything I find useful with regards SLM...

No broker is perfect and you have to expect some errors etc to occur...my non-fx brokers are far from perfect but on the whole they are ok and on the whole SLM has been good for so far, I'm not sure what would have happened if I was in short on the GU trade and the price feed error occurred...whether they would refund you for the error?

...SLM are attempting to break the mould and think outside the box ...

... small/medium account size UK traders who religiously use MT4 but don't spread bet could be attracted to the SLM offering...that's the way I see it anyway, plus by the range of FX pairs they offer they are obviously focusing a lot on being a dedicated FX broker.

Great reply thanks! Yes with wide spreads we find many trading ideas/methods wont work coz we have to jump to the moon just to cover the spread. That's why perhaps for SB like I posted before we maybe can only realistically use the top major markets with nice small spreads (depending on your timeframe of course). I would be interested to see just how much business in general SB companies do on these "not so popular" wide spread pairs and markets. Probably not a lot apart from newbies perhaps who don't really know what a good spread is yet?

Please drone on... I love droning LOL! But yes anything that crops up about SLM please do keep us all updated, good and bad.

I'm glad to hear this resounding "no broker is perfect" stuff... it keeps my faith everytime I see one as I know there isn't a holy grail of brokers LOL. It's good to hear SLM have been "good on the whole" and yes by the sounds of they would have refunded and sorted the whole mess out fairly as they have already openly promised on this thread no less!!

Yeah SLM are thinking outside the box you can see that by the answers they give to certain issues and questions. They have obviously worked hard at getting MT4 sorted with their SB offering and are taking all comments and suggestions seriously to give us what we want.

And yes they seem to be dedicated to FX traders more than anything by offering the largest amount of pairs in the world of SB (so they claim) - but this is a natural progression of the SB industry anyway I think as everyone just seems to love those highly liquid 24hr markets!! Everywhere you go it's FX, FX, FX.... (although I don't believe FX is actually the best market to trade IMHO)

TOC

 

[Tired_Of_Conmen]

....average spread across all of these were as follows:

Oanda 1.83
TF 3.73
IG 4.06
SLM 3.58

Other pairs I trade outside of this like E/CAD etc only represent about 5% of my trading so I'll probably not trade these pairs as the difference in spreads is stupidly high, unless I'm position trading them.

You have put a lot of dedication into this, it's that kinda hard work that should pay off.

Thanks for sharing what you found. It's a real eye-opener. I'm going to stick with SB I think, probably SLM unless some big bad news comes up about them, but stick to the major major major markets! I just don't see the point of trading charts with spreads so large it takes the edge off. Small spreads are often part of the edge itself.

TOC

 

[Smart Live Markets]

unable to place a trade on the SPX or Dow for the last few minutes since the news came out.
Annoying. First real complaint from me.
Not having this issue with my other brokers.

Hi
We had NO issues with any of our price feeds.
If you have a problem please call/email us directly and we can try and help.
Regards
SLM

 

[Smart Live Markets]

I noticed some price feed errors earlier.

at 15.05 GMT there was price errors on gj and gu (there might have been others but I was only watching these two). Price was @ about 1.5630 on other MT4 brokers and SB and was nearly 40 pis higher on SLM on both GJ and GU. I had a GU long so it worked out well for me cos I closed it at a much better price than I should have got.

I'm fairly new to SB as been slowly making the transition due to the tax benefits...why are spreads typically so much higher on SB's than traditional FX brokers?

Hi
We had no problems with our price feed. If you think you had a result then I am pleased for you.
Regards
SLM

 

[Smart Live Markets]

Hmm this is weird. If anyone from SLM is reading please comment. If you was short and this happened, it would be completely unacceptable. That's where a phonecall, refund etc would come in but this shouldn't happen full stop. The price must follow the underlying market else it's all pointless.

To answer your question, the spread is wider on SB due to there being no commission to pay - the commission is built into the spread. They make their money from the little bit they add onto the natural market spread. So SB brokers are supposed to make small amounts per trade from the slightly wider spread they offer and therefore volume of trades is their lifeblood like with all brokers - so when they don't get enough trades to make a living one month, they play dirty tactics like stop hunting, frozen platforms, re-quotes etc... we're all on this thread hoping and praying SLM are going to be different.....

But with the price differences people are now mentioning... well.... ouch... SLM please comment.

Hi
We had no problems with our price feed. If anyone does think there is a problem then please let us know directly and we will help.
Regards
SLM

 

[lovejoy21]

Hi
We had no problems with our price feed. If you think you had a result then I am pleased for you.
Regards
SLM

Okay, what would have caused the difference in price between your price and other brokers?

At the time stated your GJ and GU prices were around 40 pips higher than 2 other SB firms prices and 3 other FX brokers that I use?

 

[redart]

Hi
We had NO issues with any of our price feeds.
If you have a problem please call/email us directly and we can try and help.
Regards
SLM

Hi,
After the news came out, if I 'right clicked' on the chart the 'trading' option (where you place an order) was not visible. It was visible on my other instruments.
The 'trading' option became visible again about 10 minutes later.
I assumed that you had stopped taking trades on the Dow/spx due to the news.

Another little thing that happens to me sometimes, is when I double click an open position which I intend to close, the 'close position' tab is greyed out and can't be clicked, which means I have to close the box and then try again (has always worked on the second attempt so far) but this can result in losing the price that i was after.

Cheers

 

[gle101]

Yes there seems to be some problems for SLM to take care of. It look like they are quite alert in communicating and try to fix the problems quickly. But I still have problems with the opening of the FTSE in the morning. The chart shows movement, but there is no option for Trading in the New Orders window. It becomes trade able about one and a half minutes later. This has happen 3 trading days in a row now. I can't see that the problem is on my side.

 

[Smart Live Markets]

Okay, what would have caused the difference in price between your price and other brokers?

At the time stated your GJ and GU prices were around 40 pips higher than 2 other SB firms prices and 3 other FX brokers that I use?

Hi
Well I have just cheked your account.
You certainly dealt at a good rate for you.
All I can say is that for a few minutes after those figures came out the markets were very volatile and some of the crosses (GBPJPY etc) were somewhat erratic.
It does seem we may have been a little high, (certainly not 40 pips though) which I will look into.
Regards
SLM

 

[Smart Live Markets]

Yes there seems to be some problems for SLM to take care of. It look like they are quite alert in communicating and try to fix the problems quickly. But I still have problems with the opening of the FTSE in the morning. The chart shows moment, but there is no option for Trading in the New Orders window. It becomes trade able about one and a half minutes later. This has happen 3 trading days in a row now. I can't see that the problem is on my side.

Hi
I cannot believe you still have a problem with this.
Can I just clarify, is the the UK100 (FTSE indices) or individual FTSE stocks ?
Thanks
SLM

 

[Smart Live Markets]

Hi,
After the news came out, if I 'right clicked' on the chart the 'trading' option (where you place an order) was not visible. It was visible on my other instruments.
The 'trading' option became visible again about 10 minutes later.
I assumed that you had stopped taking trades on the Dow/spx due to the news.

Another little thing that happens to me sometimes, is when I double click an open position which I intend to close, the 'close position' tab is greyed out and can't be clicked, which means I have to close the box and then try again (has always worked on the second attempt so far) but this can result in losing the price that i was after.

Cheers

Hi
Well obviously that should not be happening. I can assure you we would never switch off or disable a market over figures, so I cannot for the life of me think why that happened. All I can say is that if you get a problem like that then please call up on the phone or Live Chat and let us know at the time. There is not a lot we can do after the event. I will of course let our IT dept know about this issue. Thanks. Regards SLM