Alternative to spread betting the dow

jeadie1

Junior member
16 0
Hello,
I have been studying the DJI.
I understand the advantages of spreadbetting.

However, I fancy trying to skelp 10 points, long or short, and the spreads from most of the spread bet companies will take 1/2 of this at least.

Is there an alternative ?

Thanks
 
Last edited:

ChartMan

Legendary member
5,580 46
SB's will take all of that and more, typically 20-30 points, with their spread and bias........... Trade ES with IB at market...minimal spread, NO bias. min account size £1500 I think
 

Marathonchap

Junior member
19 0
Hi,

If you want to trade the DJIA in that way you could try trading DIA(The DJIA tracking stock) through a US broker.
 

jeadie1

Junior member
16 0
Thanks for the reply marathonchap.

How much do I need in an account to trade with a broker ?

I think chartman was talking about Eurostox when he mentioned ES, a lot of people have started trading this. I think it is liked because you only nedd circa £2k in your account and you can trade at circa £10 a point.
What I want is something like this but for the Dow, the ES does'nt move in the right way for me.

If there is something like this for the Dow, maybe something similar exist for the larger indeces ?
 

ChartMan

Legendary member
5,580 46
No, by ES I mean the E-Mini S&P500 futures. This chart precedes the DOW by about 30 seconds as does the mini NAS futures. The characteristics of the ES are very similar to the dow, just scaled by about a factor of 9.3 ish.... One definite benifit to trading ES is that you have REAL traded volume that you can chart. Trading ES with International Brokers (IB) will cost you $2.40 per deal,0.25 point spread, but the downside is that the minimum contract is 50$ per point. The biggest bonus is there is NO BIAS. So, you can scalp this till the cows come home and a one or two point scalp is well profitable. That would equate to 18/20 points on the DOW @ 5$ a point. You need a minimum of £1500 to fund the account and can daytrade it to your hearts' content. I guess realistically you would need double that or the first big loss would put you below the account minimum.....
Hope this helps.
 

Skimbleshanks

1
2,325 16
Yes, the absolute minimum with IB is £1,500 ... but ... they have just brought in a rule that you must have a minimum of $2,000 in your account to trade.

This means that with an opening balance of £1,500 ($2,325), you have just $325 to lose before you need to add funds.

These figures refer to trading futures, not equities where the minimum is $25,000 (£16,700).
 

delboy trotter

Active member
112 2
Can someone please explain how this scalping technique would work in practice? (perhaps with a detailed example) If the brokers are using a live feed from the s&p futures and there is no bias, how can you scalp a few points profit out of this scenario?
 

jeadie1

Junior member
16 0
Ok thanks for all the info.
At $50 a point, I am going to have to make sure all my ducks are in a row, before I start trading.

Delboy in response to your question, I am not entirely sure what you are asking.....But I would use technical analysis of the chart pattern to determine a good entry point.
 

neil

Legendary member
5,167 748
Delboy Trotter

Delboy.

Your question betrays a lack of essential knowledge, so before you risk your money I suggest low key spread betting if you must risk your cash.

And use the search function on the home page for "scalp."

Visit www.elitetrader.com and use their search function. Check out book reviews on each site. Check out Motley Fool "Contemplating trading Stratagies
"http://boards.fool.co.uk/Messages.asp?bid=51315

You must know your TA and chart reading (Price/volume) if you are to scalp or trade longer term.

You ask for detailed scalping examples - sorry, it's not that easy, plus it would take several pages to begin from TA to executed trades. In between you have the matter of discipline and stops.

Eventually you evolve your own method via study and testing in the real world. Sadly it cannot be read in a book and applied straight to the screen because you (The human mind) gets in the way.

As an aside I have noticed that some questions from our members seem to indicate that they believe trading is the easy route to riches - if only they have the right book or correct method placed in their palm.

Sorry to disabuse you of that notion. What you can do is to read the above, search for books on TA and trading (We have past questions relating to same under the "Search" facility), watch prices and look into the chatrooms, read other web sites, and test.

People here are only too pleased to help you - but please make the simple effort to use the search facility and read up on your TA ,since you will find many of your questions will then be unnecessary, and those that you do ask - more enlightened.

Happy days.

:D
 

ChartMan

Legendary member
5,580 46
Scalping is for the experienced and the brave.... it entails taking just the barest minimum of a move, say 1 or 2 points on ES, the E-Mini S&P500 futures ( current daily range 890-905). To make a living at this, one has to "bet" $50-$100 (or more) per point. Great, you may think - piece of cake. Maybe, untill you get hit for a 5 point drop and you become mesmerised by fear of the huge potential loss and think.....I'ts gonna come good any minute now.... and it drops another 3 points. whoosh 800 bucks down the pan..... and to claw that back you have to have 5 good wins....
Better off by far to start is SB co's at £1 a point and a longer time scale- at least tens of minutes/a few hours. If you must play scalping- which is almost impossible with SB's, do it at 10p a point. That way you can play, learn, experience losses and not damage your wealth.
If you can regularly win 3/4 points on ES and achieve ,say, a 4:1 win lose ratio with max losses 3/4 points, then you are on the right track. By regularly , I DON'T mean every half hour, I mean over all your trades. You may only do 2 or 3 trades a day, or just a couple in the evening. If you find that you lose as often as you win, start to re-think what you are doing by way of strategy....
 

jeadie1

Junior member
16 0
Hello,

I have done a bit more research, apparently there are DOW eminis at $5 or $2 a point.

Are these any good ?

Thanks

James
 

Helenqu

Established member
841 3
Hi James,

Have a look at the knowledge centre here:

http://www.cbot.com

Good, free tutorial should answer most of your questions. Liquidity on the Dow e-mini is nowhere near as good as for ES or Eurostoxx50.

If you want a cheap (10euros a contract point) , liquid futures contract with a spread of 1 point then ESTOX50 is the place to look. But I think you should gain some experience with SBs before thinking about using your money on futures. You can gain it fast but lose it quicker and it's a tough game, needs dedication and discipline.

Good luck
 

ChartMan

Legendary member
5,580 46
Agreed Helen, Eurostoxx has got great volume, and trading it isn't going to put huge amounts of cash per point at risk and as you have found to your liking, it doesn't have the fury or volatility of ES, whilst still enjoying decent ,albeit slower, moves. Having said that, I'm sure it will still scare the pants off some.... :)
 
 
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