The Daily Index Trader

[Splitlink]

I have used fins as well when I opened an account with them and with IG during my first foray into this world a couple of years ago. I found them very good as well but I just seem to remember it was slightly easier to manage deposits and withdrawals with the IG account.

Since we are on associations between companies at the moment as well I believe that IG are the same as City Index.

You mean that they belong to the same group? No, Fins is with City Index.

 

[Astarte3141]

You mean that they belong to the same group? No, Fins is with City Index.

Yes, I stand corrected.

 

[Ross Spur]

Since we are on associations between companies at the moment as well I believe that IG are the same as City Index.

City Index is Finspreads, not IG, but I don't think you should blaming the SB company for losses here. Their quote is based on the underlying future, corrected for 'fair value' and the figures given by different companies will often vary by a few points. It shouldn't make much difference if Gekko has been 2pt higher all day, but you always need to watch for spikes that only appear in one provider's quote.

 

[sarnia cherie]

My stop was higher than yours at 3780.56 and was hit also. Anyone here using IG for this and if so are your results different?

 

[Dommo]

As someone else has mentioned a while ago, there's a way of putting on exactly the same trade as DIT on a single index ie. DAX.
My question is...........Is this more beneficial than using two closely corrolated indices?

I'd be grateful for a reply from any knowledgeable member!

I'll probably end up trying it for a week on the Demo a/c. anyway.

I suggested this after I read Leonarda's summary. Trade looks like two parts - enter a hedged spread trade (long one index, short another). If the correlation is reliable the hedge works so broadly you don't expect to make or lose very much on this part.

Then at some point, you close the losing side, in the belief that momentum will continue. At the point you do this, if the correlation has been perfect, you would not expect to have made or lost any money (apart from bid/ask spreads). After this point, you have a position in a single index, and you now have a completely different trade. I offer no opinion on whether this second part is generally a good or bad strategy - as a very crude approximation it seems like attempting to jump on a trend halfway through the trend - I could not say how viable that is in the long run. But yes, you can implement the same (second part of the) trade simply by entering in a single index at that point.

I simply cannot understand why the original spread trade is included. But it is good business for brokers.

If anyone is mystified by why performance is down while correlation is high, this is because DAX/CAC correlation is more or less irrelevant to final outcome - once you're in the second half of the trade (the part where you hope to profit), you're no longer using the correlation hedge, so it becomes irrelevant.

 

[Ian HDIT]

So what was the outcome today win or loss, or is it still open? I completely cocked mine up and then the evaluator wouldnt work on the stop/proft section so had no idea where to put targets so closed it down for about £1 proft. Biggest winning day I have had in about a week

 

[SteveBanks]

Quite so Baldeagle- also don't forget that if Gekko quoted 2pts lower in line with IG then your stop would also have been two points lower, so you would still have been taken out. You are effectively asking Gekko to 'give' you 2pts Don't get me wrong, I've had problems with Gekko's platform and I'm not a big fan of theirs, but nobody moves prices in search of stops quite like IG! I prefer Capital Spreads, but their minimum £1/pt stake stops a poor soul such as I from trading forex or using DIT, (not that I'm using it much at the minute!). Onthe subject of introducers fees, surely all SB companies have arrangemets with someone? It seems standard business practice to me and no one has to use them. I think we're getting a bit paranoid here!

Hi annicx,

I don't think the word paranoid is the word you're looking for. I think the word is disappointed.

Of course all companies have introducers arrangements. What is disappointing is when people like Richard Hill holds himself up as the trader's friend and then recommends a spread bet provider not because it is a good one but because he is with Agora and part of the same group.

Like insurance salesmen telling you a particular policy is best because of their commission.

Then there's Mark Rose who some of us have been giving the benefit of the doubt and who has a set up whereby if everyone sends back the system for a refund he still makes X numbers of £100 commissions for each person he sends to Gekko.

He can't lose. Yes, I think the word is disappointed not paranoid.

S

 

[Splitlink]

Hi annicx,

I don't think the word paranoid is the word you're looking for. I think the word is disappointed.

Of course all companies have introducers arrangements. What is disappointing is when people like Richard Hill holds himself up as the trader's friend and then recommends a spread bet provider not because it is a good one but because he is with Agora and part of the same group.

Like insurance salesmen telling you a particular policy is best because of their commission.

Then there's Mark Rose who some of us have been giving the benefit of the doubt and who has a set up whereby if everyone sends back the system for a refund he still makes X numbers of £100 commissions for each person he sends to Gekko.

He can't lose. Yes, I think the word is disappointed not paranoid.

S

You have to move on, mate. Unfortunately, you learn by your own mistakes in this business. Try not to spend too much while you are learnng, ok?

 

[GlynJ]

Thanks Dommo and Baldeaglebloke.

The way I'm doing it is with an oco.
.
My concern was I might be losing the advantage of one index being undervalued to the other,but I guess I shouldn't be worrying too much about that with all the whipsaws and rangebound action that's happening recently.

Rgds, Glyn.

 

[SteveBanks]

You have to move on, mate. Unfortunately, you learn by your own mistakes in this business. Try not to spend too much while you are learnng, ok?

That's for that Splitlink,

but I'm not really in need of the comforting verbal hug. As it happens I do very well in trading in the financial markets; commodities, stocks as well as Forex, so I'm not totally naive.

It's just that I thought that DIT looked interesting enough to give a go and was willing to give Mark Rose the benefit of the doubt. A second chance so to speak.

The system certainly hasn't been discredited yet and so the jury's still out.

I just wish I had stayed with IG Index instead of listening to the sound of the bonus calling me at Gekko. I just really didn't think they could be as poor as they have been. Their platform, customer service etc.

But there you go, another lesson learnt.

S

 

[c0py]

So what was the outcome today win or loss, or is it still open? I completely cocked mine up and then the evaluator wouldnt work on the stop/proft section so had no idea where to put targets so closed it down for about £1 proft. Biggest winning day I have had in about a week

Hi Ian,

CAC stopped out at about 9:45 for me. DAX is still open but not much movement at all, currently only 1.5 points up

 

[annicx]

I suggested this after I read Leonarda's summary. Trade looks like two parts - enter a hedged spread trade (long one index, short another). If the correlation is reliable the hedge works so broadly you don't expect to make or lose very much on this part.

Then at some point, you close the losing side, in the belief that momentum will continue. At the point you do this, if the correlation has been perfect, you would not expect to have made or lost any money (apart from bid/ask spreads). After this point, you have a position in a single index, and you now have a completely different trade. I offer no opinion on whether this second part is generally a good or bad strategy - as a very crude approximation it seems like attempting to jump on a trend halfway through the trend - I could not say how viable that is in the long run. But yes, you can implement the same (second part of the) trade simply by entering in a single index at that point.

I simply cannot understand why the original spread trade is included. But it is good business for brokers.

If anyone is mystified by why performance is down while correlation is high, this is because DAX/CAC correlation is more or less irrelevant to final outcome - once you're in the second half of the trade (the part where you hope to profit), you're no longer using the correlation hedge, so it becomes irrelevant.

I agree with this in theory, however DIT is supposed to allow one to enter a trade at a set time and then go about other business or manage the trade- whichever suits. Not everyone can watch for certain levels to be reached before entering a trade. I trade the FTSE using support/resistance, pivots and advisory emails, but if nothing happens in the first hour or so that's generally it for me as I am busy until around lunch time and don't like trading FTSE when it is at the mercy of the Dow in the afternoon.

 

[Dommo]

I agree with this in theory, however DIT is supposed to allow one to enter a trade at a set time and then go about other business or manage the trade- whichever suits. Not everyone can watch for certain levels to be reached before entering a trade. I trade the FTSE using support/resistance, pivots and advisory emails, but if nothing happens in the first hour or so that's generally it for me as I am busy until around lunch time and don't like trading FTSE when it is at the mercy of the Dow in the afternoon.

I don't follow this. Market if touched (better known here as 'stop') order? DIT opening trade bleeds you for transaction costs that you don't need.
Regards
Dom

 

[annicx]

I don't follow this. Market if touched (better known here as 'stop') order? DIT opening trade bleeds you for transaction costs that you don't need.
Regards
Dom

I agree you can use stops and limits, but it would be very difficult to work out where CAC would be when DAX was stopped out and vice-versa to enter the prices. You could just use 3% and 6% away from the current price, (first to open, second to close), but long term I can't see this working any better. I decide on a daily basis whether I want to trade DIT or not based on the information available, I don't feel I can do much more than that. I think worrying about 2 points spread instead of 1 is a bit pointless, (scuse the pun!), I used to trade FTSE with 6-8pt spreads and it was still possible to make a profit, for example. It is surely a case of either you want to use DIT or you don't, in which case you ask for a refund. If you have the time to experiment with oco orders on one index all the better!

 

[rodcar]

very good point dom, which is why no serious trader would buy this. or ever if given away they would not use it.
tradinging is hard to master for most people and there is a learning curve
daytrading has a low sucess rate, this is not always because the trades picked are wrong, there a lot to learn about position sizing and amount at risk.
users of this system have chosen to accept double costs
if the system is reliant on correlation there is no positive expectancy of both trades working
common sense would tell me if i wanted to sell the cac i would do it at high levels , also if i wanted to buy the dax i would do it at low levels.this would enable tighter stop management if i am wrong.

As to the current position if people are long the dax as long as we see buying at this point on the SP at fib levels and daily pivot and gap fill new highs are likely , you may have a very good result
nobody knows , party of trading is dealing with uncertainty and one of the few things that you have control over is you own risk

http://tools.boerse-go.de/index-tool/

 

[Dommo]

All right - best of luck with it Annicx

 

[stevespray]

I had a quick think about the 'single trade method' as soon as I read the DIT pdf but it would not be workable. The DIT spreadsheet must consider some kind of MA (Moving Average) for each index when calculating which index to buy and which to sell. So common sense tells us that we sell the weak one and buy the stronger one. In order to use just one trade per day our trigger to enter the index which is going our way would be based on the other index hitting a psuedo stop loss in the opposite index. You can see the problem here. You cannot be sure how far the winning market has moved (since 9.15am) when the losing market hits its simulated stop loss level. Statistically, because we are using MA's and Trend as our tools, on more occasions than not the winning market is more likely to have gone a further distance into profit than the losing market has gone into loss (as the losing market hits its stop) and therefore using a single entry would result in us entering 'too late' into the winning trend.

Hope this makes sense.


Steve.

 

[Astarte3141]

I had a quick think about the 'single trade method' as soon as I read the DIT pdf but it would not be workable. The DIT spreadsheet must consider some kind of MA (Moving Average) for each index when calculating which index to buy and which to sell. So common sense tells us that we sell the weak one and buy the stronger one. In order to use just one trade per day our trigger to enter the index which is going our way would be based on the other index hitting a psuedo stop loss in the opposite index. You can see the problem here. You cannot be sure how far the winning market has moved (since 9.15am) when the losing market hits its simulated stop loss level. Statistically, because we are using MA's and Trend as our tools, on more occasions than not the winning market is more likely to have gone a further distance into profit than the losing market has gone into loss (as the losing market hits its stop) and therefore using a single entry would result in us entering 'too late' into the winning trend.

Hope this makes sense.


Steve.

Yeah, it's the old thing about hindsight being 20/20!

 

[Baldeaglebloke]

I had a quick think about the 'single trade method' as soon as I read the DIT pdf but it would not be workable. The DIT spreadsheet must consider some kind of MA (Moving Average) for each index when calculating which index to buy and which to sell. So common sense tells us that we sell the weak one and buy the stronger one. In order to use just one trade per day our trigger to enter the index which is going our way would be based on the other index hitting a psuedo stop loss in the opposite index. You can see the problem here. You cannot be sure how far the winning market has moved (since 9.15am) when the losing market hits its simulated stop loss level. Statistically, because we are using MA's and Trend as our tools, on more occasions than not the winning market is more likely to have gone a further distance into profit than the losing market has gone into loss (as the losing market hits its stop) and therefore using a single entry would result in us entering 'too late' into the winning trend.

Hope this makes sense.


Steve.

I've given the same thought process and over the last few weeks it wouldn't matter when you'd entered really - fundamentally the trends have not continued and we've been whipped out so to my mind with a sideways or whipsawing market trading pairs in opposition will lead to losses.

 

[princetrader]

And don't know wheather people have heard of the Net Trap system? I'm not much of a fan of that system eigther, but one thing I have to give credit with the Net Trap system is that, if the market conditions looks unfavourable it gives you a signal not to trade. With DIT there is no such signal, you just dive in.