Can spread betting company cheat?

newTraderMike

Junior member
10 2
Hi folks,

I am new to this forum and like to ask some opinions from all experienced traders using spreadbetting.

I am not excatly new to spreadbetting and been doing this for about 4 years. I didn't made much money out of it and did't loss big as well. I had found some interesting statistics when I studied last 4 years positions (each one of them). what I realised is that the bigger I place the bet, the more chance my stop lost was hit. I am not here to argue when I was wrong and the market was against me. But there are really a lot of times I was right about the direction but the system just managed to hit my stop lost and turn in to my favour afterwards. To clairify how to get the data, here is what I normally do.

When I place a trade, I make a plan about size, direction, period I am holding it for, stop lost and stop win. If stop win is hit or I closed the position by myself, nothing recorded apart from profit. If the stop lost was hit I will record the lost and recheck the price at the end of the planned period. I only make about one/two trade per week, so it's not a lot of work to record them.

Does anyone had similiar experiences? Thanks in advance for any help.
 

Jessi_trader

Veteren member
4,110 172
Hi folks,

I am new to this forum and like to ask some opinions from all experienced traders using spreadbetting.

I am not excatly new to spreadbetting and been doing this for about 4 years. I didn't made much money out of it and did't loss big as well. I had found some interesting statistics when I studied last 4 years positions (each one of them). what I realised is that the bigger I place the bet, the more chance my stop lost was hit. I am not here to argue when I was wrong and the market was against me. But there are really a lot of times I was right about the direction but the system just managed to hit my stop lost and turn in to my favour afterwards. To clairify how to get the data, here is what I normally do.

When I place a trade, I make a plan about size, direction, period I am holding it for, stop lost and stop win. If stop win is hit or I closed the position by myself, nothing recorded apart from profit. If the stop lost was hit I will record the lost and recheck the price at the end of the planned period. I only make about one/two trade per week, so it's not a lot of work to record them.

Does anyone had similiar experiences? Thanks in advance for any help.

Hi There,

In this market, anyone can cheat. no matter if they are equity broker, future broker etc...

That's why its important to go with reputation.

In case of SB, SB companies frequently change spread between bid and ask and that's how they hit stops. This is known thing.

JT
 

darktone

Veteren member
3,986 1,041
Hi There,

In this market, anyone can cheat. no matter if they are equity broker, future broker etc...

That's why its important to go with reputation.

In case of SB, SB companies frequently change spread between bid and ask and that's how they hit stops. This is known thing.

JT
??? and what about the guys who offer fixed spreads?
 

darktone

Veteren member
3,986 1,041
Hi folks,

I am new to this forum and like to ask some opinions from all experienced traders using spreadbetting.

I am not excatly new to spreadbetting and been doing this for about 4 years. I didn't made much money out of it and did't loss big as well. I had found some interesting statistics when I studied last 4 years positions (each one of them). what I realised is that the bigger I place the bet, the more chance my stop lost was hit. I am not here to argue when I was wrong and the market was against me. But there are really a lot of times I was right about the direction but the system just managed to hit my stop lost and turn in to my favour afterwards. To clairify how to get the data, here is what I normally do.

When I place a trade, I make a plan about size, direction, period I am holding it for, stop lost and stop win. If stop win is hit or I closed the position by myself, nothing recorded apart from profit. If the stop lost was hit I will record the lost and recheck the price at the end of the planned period. I only make about one/two trade per week, so it's not a lot of work to record them.

Does anyone had similiar experiences? Thanks in advance for any help.
Sb dont need to cheat when theres a steady supply of crap traders out there to fade. The only time ive had an issue is when i was taking advantage of their pricing, i was then given 'more realistic' fills and a load of bollox when I phoned up to contest. "you wernt being very fair to us" they were right, I wasnt!
 
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counter_violent

Legendary member
10,514 2,784

newTraderMike

Junior member
10 2
I am using capital spread.

Got to say thanks for all the replies. I would guess I had to relook into my model and figure out whats wrong. I normally trade short term and with a stop lost less than 50 pips with 3% safty. The reason why I am asking is interesting. From my old records, the stop lost hit rate was much higher when I trade big. I.e. 10 or more. I personally don't think 10 is big trade but records shown my smaller trades are lot of more profitable than the big ones althought the same method was used. One more question here, would a 20 bet be a big impact on the market? I won't think so myself as I am trading index and that got be a lot money in the game. Thanks.
 

Jessi_trader

Veteren member
4,110 172
??? and what about the guys who offer fixed spreads?

Oviously, I was refering to the one who doesn't have fixed spread. Many have fixed spread during normal market hours and different spread in out of market hours.

Certainly not all have fixed spread. If you see their terms and conditions you will find some interesting stuff.
 

darktone

Veteren member
3,986 1,041
Oviously, I was refering to the one who doesn't have fixed spread. Many have fixed spread during normal market hours and different spread in out of market hours.

Certainly not all have fixed spread. If you see their terms and conditions you will find some interesting stuff.
Watching the order book out of hours its easy to see how thin markets can get, its then easier to understand why some sb would widen their spread then, or how a dynamic spread can widen and close back up rapidly.
Its also easy to see how joe bloggs sb trader sat there with his stop at 5, thinks hes been robbed when the market is bid 10 offered 11 and somewhere out there real market land 'other trader1' dumps 20 contracts at market. Other trader1 sees the market is only 20 contracts deep to 5 so understands that he will get filled at various prices between 10 and 5 and that his order will clear all bids at 5.
Unfortunately joe just sees his 'dynamic' spread price whack from 1 wide to 6 wide and back to 1 wide (when 'other trader2' bids 1 at 10 in real market a nano second later). To add insult to injury joes stop (market order to fire when x price is hit) is filled at 4!
After joes has got off the phone from his sb and completed his "I just been robbed!" post on T2W he has a chance to calm down. At this point joe can choose to do 1 of 2 things in regards to what just happened.
i) Go on believing he was robbed.
ii) Investigate the 'underlying price' thing the guy at the sb was talking about.

Imo, one of these choices will help him progress as a trader and one wont.
 
Last edited:

darktone

Veteren member
3,986 1,041
Got to say thanks for all the replies. I would guess I had to relook into my model and figure out whats wrong. I normally trade short term and with a stop lost less than 50 pips with 3% safty. The reason why I am asking is interesting. From my old records, the stop lost hit rate was much higher when I trade big. I.e. 10 or more. I personally don't think 10 is big trade but records shown my smaller trades are lot of more profitable than the big ones althought the same method was used. One more question here, would a 20 bet be a big impact on the market? I won't think so myself as I am trading index and that got be a lot money in the game. Thanks.
To be fair a 20ppp bet in any index is small, ie 2 contracts in ftse 100 (Z)
You can compare size per point / tick here.
http://www.prospreads.com/full_size_lots.php
More likely (and providing there has been no obvious change in PA) your increase in size affects your mindset which manifests itself in your trading (moving stops closer/missing trades/moving targets closer/waiting for more confirmation etc etc)
I know i sound like a broken record but imo Trading in the zone is essential reading for mindset management which imo is 90% of trading. Theres a pdf link in my sig below.
GL
 
Last edited:

Jessi_trader

Veteren member
4,110 172
Watching the order book out of hours its easy to see how thin markets can get, its then easier to understand why some sb would widen their spread then, or how a dynamic spread can widen and close back up rapidly.
Its also easy to see how joe bloggs sb trader sat there with his stop at 5, thinks hes been robbed when the market is bid 10 offered 11 and somewhere out there real market land 'other trader1' dumps 20 contracts at market. Other trader1 sees the market is only 20 contracts deep to 5 so understands that he will get filled at various prices between 10 and 5 and that his order will clear all bids at 5.
Unfortunately joe just sees his 'dynamic' spread price whack from 1 wide to 6 wide and back to 1 wide (when 'other trader2' bids 1 at 10 in real market a nano second later). To add insult to injury joes stop (market order to fire when x price is hit) is filled at 4!
After joes has got off the phone from his sb and completed his "I just been robbed!" post on T2W he has a chance to calm down. At this point joe can choose to do 1 of 2 things regards to what just happened.
i) Go on believing he was robbed.
ii) Investigate the 'underlying price' thing the guy at the sb was talking about.

Imo, one of these choices will help him progress as a trader and one wont.

:LOL::LOL::LOL: ...funny but true
 

newTraderMike

Junior member
10 2
To be fair a 20ppp bet in any index is small, ie 2 contracts in ftse 100 (Z)
You can compare size per point / tick here.
http://www.prospreads.com/full_size_lots.php
More likely (and providing there has been no obvious change in PA) your increase in size affects your mindset which manifests itself in your trading (moving stops closer/missing trades/moving targets closer/waiting for more confirmation etc etc)
I know i sound like a broken record but imo Trading in the zone is essential reading for mindset management which imo is 90% of trading. Theres a pdf link in my sig below.
GL

Thanks Darktone, very informative.
 

Splitlink

Legendary member
10,850 1,233
Hi folks,

I am new to this forum and like to ask some opinions from all experienced traders using spreadbetting.

I am not excatly new to spreadbetting and been doing this for about 4 years. I didn't made much money out of it and did't loss big as well. I had found some interesting statistics when I studied last 4 years positions (each one of them). what I realised is that the bigger I place the bet, the more chance my stop lost was hit. I am not here to argue when I was wrong and the market was against me. But there are really a lot of times I was right about the direction but the system just managed to hit my stop lost and turn in to my favour afterwards. To clairify how to get the data, here is what I normally do.

When I place a trade, I make a plan about size, direction, period I am holding it for, stop lost and stop win. If stop win is hit or I closed the position by myself, nothing recorded apart from profit. If the stop lost was hit I will record the lost and recheck the price at the end of the planned period. I only make about one/two trade per week, so it's not a lot of work to record them.

Does anyone had similiar experiences? Thanks in advance for any help.

A new thread has started that might be worth a read,

The other-side of the screen. Last post 1051 hours

Can they cheat or do they cheat? You may find the answer there. There is no doubt that trading is difficult as it is,without the further worry of cheating.

I never have thought that I was big enough to be cheated and so have never given much thought to it.
 

newTraderMike

Junior member
10 2
Watching the order book out of hours its easy to see how thin markets can get, its then easier to understand why some sb would widen their spread then, or how a dynamic spread can widen and close back up rapidly.
Its also easy to see how joe bloggs sb trader sat there with his stop at 5, thinks hes been robbed when the market is bid 10 offered 11 and somewhere out there real market land 'other trader1' dumps 20 contracts at market. Other trader1 sees the market is only 20 contracts deep to 5 so understands that he will get filled at various prices between 10 and 5 and that his order will clear all bids at 5.
Unfortunately joe just sees his 'dynamic' spread price whack from 1 wide to 6 wide and back to 1 wide (when 'other trader2' bids 1 at 10 in real market a nano second later). To add insult to injury joes stop (market order to fire when x price is hit) is filled at 4!
After joes has got off the phone from his sb and completed his "I just been robbed!" post on T2W he has a chance to calm down. At this point joe can choose to do 1 of 2 things regards to what just happened.
i) Go on believing he was robbed.
ii) Investigate the 'underlying price' thing the guy at the sb was talking about.

Imo, one of these choices will help him progress as a trader and one wont.


Thanks Darktone, a lot info here. Guess I am still qualified as a bad trader after 4 years. Surprisingly haven't lost a lot. :) In terms of underlying price on index, could you recommand some useful sources please? i.e. books, web links.
 
 
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