arabianights
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cheers
Best Thread Capital Spreads
capitalspreads
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concerning the 'close' button there are several other things to be considered.
if it was 1 click then some clients would accidentally click on it when they really wanted to just amend an order.
and
as ncfc says a client might want to part close a position. If the 'close' button just automatically closed the entire bet then the client (to actually do a part close trade) would then have to search through our drop down boxes to find the right market then open a trade ticket and trade. A very irritating palaver.
we try to make it an easy platform to trade on and a difficult platform on which to make a mistake. 1 click trading would make client mistakes a frequent occurrence.
simon
if it was 1 click then some clients would accidentally click on it when they really wanted to just amend an order.
and
as ncfc says a client might want to part close a position. If the 'close' button just automatically closed the entire bet then the client (to actually do a part close trade) would then have to search through our drop down boxes to find the right market then open a trade ticket and trade. A very irritating palaver.
we try to make it an easy platform to trade on and a difficult platform on which to make a mistake. 1 click trading would make client mistakes a frequent occurrence.
simon
Why would a 'professional client' trade with Capital Spreads though? If they make money, they wont last long, you'd find a way to defeat their strategy or eventually close their account for supposedly abusing your system by 'trading at off market or latent prices'. I mean from a spreadbet company point of view all winners are trading on latent prices. How could anyone dare make money? If they do they need to be immediately investigated and dealt with. What you want to attract are the mug punters that dont really know whether to go long or short. Then you can clean out. That's the reality.
Yes, they will for sure go for solutions like CFDs or futures, trading under the umbrella of a registered company. I am quite certain there are those who make a living out of trading SB, but if you like to call them professionals is a matter of categorizations. With all respect, I think yours views are outdated and does not reflect the industry as a whole of today.
capitalspreads
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Pip Star
i think that you are confusing professional with 'scalper'
'professional' means a person with more than £500k, who fulfils all the Mifid criteria to be designated as 'professional'.
To say that we make life difficult for winning traders is just not true. What is fair to say is that we put winning clients (if they are big enough) into our 'A' book, we call them "marked risk" clients.
Which means that, after they have traded, we hedge the position directly in the open market.
The reason we might want to make a client 'professional' would be that we may then be able to designate their funds as "Collateral Title Transfer" monies (with their agreement) meaning that we could use their money to hedge positions. A not unreasonable situation as they may have huge positions which it would be unreasonable (or indeed difficult) for LCG to commit its own money as margin with our brokers.
To put this into persepective one of our competitors (much smaller than us) had a famous client who held well over £100m of Bank stock as a spread bet. The margin required on the hedge of this bet would have been of the order of £20m (at least) to the spread betting company's broker. The company concerned certainly did not have this type of resource just for one client. So it was able to use the clients own funds, deposited with the company, as margin by designating him as "Professional".
As a matter of fact DMA private clients trading on futures exchanges/FX platforms actually have a greater probability of being losers than with Capital Spreads (CME/CBOT report from 2005/06). Sorry but facts are facts. Last month we had 35% of our clients who traded in the month as 'winning'. Are you seriously suggesting that we make it difficult for 10,000 of the 30,000 trades a day we take?
simon
i think that you are confusing professional with 'scalper'
'professional' means a person with more than £500k, who fulfils all the Mifid criteria to be designated as 'professional'.
To say that we make life difficult for winning traders is just not true. What is fair to say is that we put winning clients (if they are big enough) into our 'A' book, we call them "marked risk" clients.
Which means that, after they have traded, we hedge the position directly in the open market.
The reason we might want to make a client 'professional' would be that we may then be able to designate their funds as "Collateral Title Transfer" monies (with their agreement) meaning that we could use their money to hedge positions. A not unreasonable situation as they may have huge positions which it would be unreasonable (or indeed difficult) for LCG to commit its own money as margin with our brokers.
To put this into persepective one of our competitors (much smaller than us) had a famous client who held well over £100m of Bank stock as a spread bet. The margin required on the hedge of this bet would have been of the order of £20m (at least) to the spread betting company's broker. The company concerned certainly did not have this type of resource just for one client. So it was able to use the clients own funds, deposited with the company, as margin by designating him as "Professional".
As a matter of fact DMA private clients trading on futures exchanges/FX platforms actually have a greater probability of being losers than with Capital Spreads (CME/CBOT report from 2005/06). Sorry but facts are facts. Last month we had 35% of our clients who traded in the month as 'winning'. Are you seriously suggesting that we make it difficult for 10,000 of the 30,000 trades a day we take?
simon
arabianights
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simon do you have a copy of the cme report btw? It sounds interesting
capitalspreads
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Arabian
I cannot find the original report but the following might be of interest. It might be pertinent to mention that niether of the reports mentioned below concerned Spread Betting or CFDs. They were for DMA traders.
The North American Securities Administrators Association reports that only 11.5% of traders actually trade profitably over the term of their trading. At least 70% lose money and the balance breakeven. A large majority of losers will lose everything they invest (trading account). So a new trader has a 1 in 10 chance of winning. I trade three strategies that are quite simple. There are thousands of strategy combinations that will work but still only about 12% of traders will win over the long term.
On another level I've recently been reading a staggering report from the Taiwan Stock Exchange regarding intraday traders (stocks and futures). It was conducted by the University of Cailfornia with 925,000 trader accounts being studied over a four year period. That's 100% of all Taiwan day traders from the occasional dabbler to regular everyday traders. The traders were grouped depending upon their trading criteria.
Of all traders 82% lost.
Of the winners 100% were regular traders.
Of occasional traders most lost.
Those that lost over a six month period also lost over the next six months.
Those that won over a six month period also won over the next six months.
Of those who traded every day, those who traded aggressively lost overall.
Of those who traded every day, those who traded passively (fewer trades) won.
so please can stop with the "DMA is great" mantra. As a point of interest who the h*ll do people think they are trading with on a DMA platform? Yes ocassionally they may trade with another private client but the vast majority of the time they are just trading with "Market Makers". Pretty much the same as trading with Capital Spreads as we also take the best price available to quote our spreads.
Simon
I cannot find the original report but the following might be of interest. It might be pertinent to mention that niether of the reports mentioned below concerned Spread Betting or CFDs. They were for DMA traders.
The North American Securities Administrators Association reports that only 11.5% of traders actually trade profitably over the term of their trading. At least 70% lose money and the balance breakeven. A large majority of losers will lose everything they invest (trading account). So a new trader has a 1 in 10 chance of winning. I trade three strategies that are quite simple. There are thousands of strategy combinations that will work but still only about 12% of traders will win over the long term.
On another level I've recently been reading a staggering report from the Taiwan Stock Exchange regarding intraday traders (stocks and futures). It was conducted by the University of Cailfornia with 925,000 trader accounts being studied over a four year period. That's 100% of all Taiwan day traders from the occasional dabbler to regular everyday traders. The traders were grouped depending upon their trading criteria.
Of all traders 82% lost.
Of the winners 100% were regular traders.
Of occasional traders most lost.
Those that lost over a six month period also lost over the next six months.
Those that won over a six month period also won over the next six months.
Of those who traded every day, those who traded aggressively lost overall.
Of those who traded every day, those who traded passively (fewer trades) won.
so please can stop with the "DMA is great" mantra. As a point of interest who the h*ll do people think they are trading with on a DMA platform? Yes ocassionally they may trade with another private client but the vast majority of the time they are just trading with "Market Makers". Pretty much the same as trading with Capital Spreads as we also take the best price available to quote our spreads.
Simon
tar
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Totally different , with capitalspreads u r the marketmaker and you also have control over my trading , u could delay , delete , reverse , suspend , slip ... etc . on CME i trade with multiple market makers , but they dont have control over my trading ...
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arabianights
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I know exactly who I'm trading with most of the time on DMA, a bunch of bastrads called RSJ
stevespray
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In fairness to CS I think that you'll find that CME will 'bust trades' from time to time if they have cause.
In terms of spreadbetting generally, it's about using the tools which best fit your methodology. There are many things about CS which benefit a trader if you understand how to use them effectively. Particularly useful is their stop policy where they fill stops at first available tick - I can tell you that this very beneficial if you're running trades in certain markets like forex or less liquid small caps.
Steve.
tar
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CME does but not marketmakers who take the other side of your trade , it is diffrent with capitalspreads , it is a market maker and at the same time it has full control over my trades , anyway i dont have a problem with trading with market makers directly outside an exchange , it is called OTC derivatives , and it is a huge market .
http://en.wikipedia.org/wiki/Derivative_(finance)
stevespray
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I don't think that they do have "full control" over your trades. Once the trade is open it's down to where the market takes you. All they have is a small amount of control over execution.
tar
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They have the right to reverse your trade ...
stevespray
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Technically that is incorrect. I won't go through all the in's and out's but put simply the Financial Services and Markets Act makes all spreadbets legally enforceable instruments from the moment of conception. That means that firms cannot just cancel bets ad-hoc in the manner which is implied.
tar
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Bottom line that is incorrect .
stevespray
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Okay, let’s cut to the chase...
I don’t always see eye to eye with Simon but on this point I happen to agree with him. The statistics from SBing and DMA both broadly appear to show the same thing – that a high percentage of people lose their money and ultimately either get knocked out of the game or are forced to re fund accounts and start again from square one.
The matter regarding “who are we actually trading against” is irrelevant provided of course that execution methods are fair and transparent. What (or who) we are ultimately trading against is price.
People fail in trading for many reasons but normally it’s not the market which defeats them – it’s themselves – normally a lack of understanding combined with an inability to control emotions and remain rational. Obviously this isn’t the thread for a big ‘deep and meaningful’ about trading psychology so I’ll come right to the point...
The whole “DMA Mantra” (as Simon has termed it) is just a convoluted extension of some kind of ‘Holy Grail’ theory which many people carry around in their heads – that somehow smaller spreads and faster execution will turn a loss making trader into someone who is successful and profitable. Sorry to be the bearer of bad news but this utter twaddle is just the kind of mental junk which stops people from making steps forward and developing their psychology beyond that of a loser. In order to move forward people need to take responsibility for their trading. So many people use the DMA vs SBing argument as a reason to excuse their losses and therefore the chance to develop and move forward on their trading journey is lost.
Steve.
I don’t always see eye to eye with Simon but on this point I happen to agree with him. The statistics from SBing and DMA both broadly appear to show the same thing – that a high percentage of people lose their money and ultimately either get knocked out of the game or are forced to re fund accounts and start again from square one.
The matter regarding “who are we actually trading against” is irrelevant provided of course that execution methods are fair and transparent. What (or who) we are ultimately trading against is price.
People fail in trading for many reasons but normally it’s not the market which defeats them – it’s themselves – normally a lack of understanding combined with an inability to control emotions and remain rational. Obviously this isn’t the thread for a big ‘deep and meaningful’ about trading psychology so I’ll come right to the point...
The whole “DMA Mantra” (as Simon has termed it) is just a convoluted extension of some kind of ‘Holy Grail’ theory which many people carry around in their heads – that somehow smaller spreads and faster execution will turn a loss making trader into someone who is successful and profitable. Sorry to be the bearer of bad news but this utter twaddle is just the kind of mental junk which stops people from making steps forward and developing their psychology beyond that of a loser. In order to move forward people need to take responsibility for their trading. So many people use the DMA vs SBing argument as a reason to excuse their losses and therefore the chance to develop and move forward on their trading journey is lost.
Steve.
arabianights
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behead those who insult tar
B
