Day trading the DAX

[durrbrain]

Hi folks, I have recently started spread trading the Daily DAX using IG. I use Netdania as a charting facility. There has always been a small discrepancy (1-2pts) between the prices from both systems and I understand that IG manage their spreads

However, today I noticed that IG had a couple of bars that were unusually different. I have attached screen shots

You will see that at 12.01 there was a candle length 12 pts using IG. This does not appear on the Netdania chart??

I have checked the Netdania chart with another charting package and it is accurate

I phoned IG to query this but they just said their quotes were ok for this period

Now a spike of this nature could have caught me out.

If I were a cynic, I might say that these spikes would benefit the SB company by triggering the stops on open trades

Has anyone else noticed this happening?

 

[ChocolateDigestive]

trade the futures. just killing time in between trades. (35 winners in a row lol)

 

[The Leopard]

Hi folks, I have recently started spread trading the Daily DAX using IG. I use Netdania as a charting facility. There has always been a small discrepancy (1-2pts) between the prices from both systems and I understand that IG manage their spreads

However, today I noticed that IG had a couple of bars that were unusually different. I have attached screen shots

You will see that at 12.01 there was a candle length 12 pts using IG. This does not appear on the Netdania chart??

I have checked the Netdania chart with another charting package and it is accurate

I phoned IG to query this but they just said their quotes were ok for this period

Now a spike of this nature could have caught me out.

If I were a cynic, I might say that these spikes would benefit the SB company by triggering the stops on open trades

Has anyone else noticed this happening?

You hear a lot of stories about the bucket shops seriously monkeying with the Dax.

Bottom line - trade the real market, get a proper broker. Otherwise, put up with the bucket shop shenanigans.

If you like Dax (real contract FDAX) you really should look at FESX as well.

 

[x4x]

I too trade the DAX with IG. I use a MT demo account for charts - the prices match pretty much spot on.
The 5M charts match too.

 

[durrbrain]

Sorry folks, the charts weren't attached.

I'll try again

(Compare what happens at 1200 and 1201)

 

[durrbrain]

I too trade the DAX with IG. I use a MT demo account for charts - the prices match pretty much spot on.
The 5M charts match too.

Thanks for your reply x4x

I guess trading with 5 min charts means that you average out any errors on a 1m timeframe

 

[durrbrain]

You hear a lot of stories about the bucket shops seriously monkeying with the Dax.

Bottom line - trade the real market, get a proper broker. Otherwise, put up with the bucket shop shenanigans.

If you like Dax (real contract FDAX) you really should look at FESX as well.

Thanks for your reply,

I have no experience trading futures using a broker. Can you provide some pointers...

I am interested in short term day trades, so trades that generally last 10-30 mins

Would CFD's be appropriate for this type of trade

Is it practical to trade Futures using 1m charts - I mean, are the costs of trading prohibitive?

thanks

 

[x4x]

Thanks for your reply x4x

I guess trading with 5 min charts means that you average out any errors on a 1m timeframe

Here's a 1M chart - matches IG almost perfectly - people always go on about 'bucket shops' but to be honest I've had very little problem with IG during the 6 years I've been with them.

 

[durrbrain]

Here's a 1M chart - matches IG almost perfectly - people always go on about 'bucket shops' but to be honest I've had very little problem with IG during the 6 years I've been with them.

Thanks for your message

Hmmm...

I have attached another chart - this time from ProRealTime. You will notice that at 1200 and 1201 both candles show no body - this is at odds with IG and MT

I think the jury is still out on this one

 

[The Leopard]

Thanks for your reply,

I have no experience trading futures using a broker. Can you provide some pointers...

I am interested in short term day trades, so trades that generally last 10-30 mins

Would CFD's be appropriate for this type of trade

Is it practical to trade Futures using 1m charts - I mean, are the costs of trading prohibitive?

thanks

Is it practical to trade Futures using 1m charts - I mean, are the costs of trading prohibitive?

It's absolutely practical. People trade futures using 1 minute charts, volume or tick charts that are faster than 1 minute charts under normal circumstances (ie, throw out more bars during active periods than a 1 minute chart would) and no charts at all. People trade futures using the ladder and take incredibly tight entries. You could ask Dionysus Toast about that style if you wish.

Costs are not prohibitive but obviously the lower down you go and the tighter your stops / smaller your targets, then yes the greater the impact of spreads, commission and slippage. Of course you can trade limit orders and so on.

Aside from costs, for a whole host of reasons (I'll elaborate if you want) trading in this manner is very, very tricky.

I am interested in short term day trades, so trades that generally last 10-30 mins

Would CFD's be appropriate for this type of trade

Could be.


I have no experience trading futures using a broker. Can you provide some pointers...

It's a totally different thing, because you're trading the real market via a proper exchange. This has advantages and disadvantages, although if you get serious and seriously profitable, any advantages that the bucket shops might have for smaller traders disappears.

One problem you might have is that because you are really trading (rather than punting on a glorified bookie's made-up market) you have to trade real contracts. This can make position sizing difficult with a small account.

For example, you use IG (as I used to). Let's say you want to trade index futures. You use IG's contract, which allows you to bet £10 a point. Say your stop is 3 points, that's a risk of £30.

If you trade the real market, the minimum you can trade is 1 contract. That's $50 a point, plus commissions, say $4.50 (which you can get from Velocity - most brokers offer around $5 or so per completed trade - 1 buy/sell or 1sell/buy, also called a round trip or turn).

So with your 3 point stop your risk is $154.50 - rather more than 30 quid.

If you want to make serious money from short-term trading, the bucket shops are useless. You will find this out sooner or later, but sooner is better.

If you really want spread betting (presumably for tax reasons) you can use a DMA spread bet company. This is effectively a futures broker that gives you a spread bet wrapper, but you will be trading the real market, there is no interference, and they can't profit from your loss.

This might sound ideal, but costs are higher. Instead of commissions of $4.50, one such DMA SB company starts at $7.50. Whether this is worth it depends upon your style, trade frequency, circumstances etc.

 

[ChocolateDigestive]

I would have thought you need to get the round trip commission below £1 RT for true scalping . Should be a prop firm out there where you can do this on a split.

That way you can tick whore all day long

 

[ChocolateDigestive]

Deep Discount Futures Trading = .50 Cents Per Side + Fees

Around £1.40 RT. But needs to be lower

 

[durrbrain]

Is it practical to trade Futures using 1m charts - I mean, are the costs of trading prohibitive?

It's absolutely practical. People trade futures using 1 minute charts, volume or tick charts that are faster than 1 minute charts under normal circumstances (ie, throw out more bars during active periods than a 1 minute chart would) and no charts at all. People trade futures using the ladder and take incredibly tight entries. You could ask Dionysus Toast about that style if you wish.

Costs are not prohibitive but obviously the lower down you go and the tighter your stops / smaller your targets, then yes the greater the impact of spreads, commission and slippage. Of course you can trade limit orders and so on.

Aside from costs, for a whole host of reasons (I'll elaborate if you want) trading in this manner is very, very tricky.

I am interested in short term day trades, so trades that generally last 10-30 mins

Would CFD's be appropriate for this type of trade

Could be.


I have no experience trading futures using a broker. Can you provide some pointers...

It's a totally different thing, because you're trading the real market via a proper exchange. This has advantages and disadvantages, although if you get serious and seriously profitable, any advantages that the bucket shops might have for smaller traders disappears.

One problem you might have is that because you are really trading (rather than punting on a glorified bookie's made-up market) you have to trade real contracts. This can make position sizing difficult with a small account.

For example, you use IG (as I used to). Let's say you want to trade index futures. You use IG's contract, which allows you to bet £10 a point. Say your stop is 3 points, that's a risk of £30.

If you trade the real market, the minimum you can trade is 1 contract. That's $50 a point, plus commissions, say $4.50 (which you can get from Velocity - most brokers offer around $5 or so per completed trade - 1 buy/sell or 1sell/buy, also called a round trip or turn).

So with your 3 point stop your risk is $154.50 - rather more than 30 quid.

If you want to make serious money from short-term trading, the bucket shops are useless. You will find this out sooner or later, but sooner is better.

If you really want spread betting (presumably for tax reasons) you can use a DMA spread bet company. This is effectively a futures broker that gives you a spread bet wrapper, but you will be trading the real market, there is no interference, and they can't profit from your loss.

This might sound ideal, but costs are higher. Instead of commissions of $4.50, one such DMA SB company starts at $7.50. Whether this is worth it depends upon your style, trade frequency, circumstances etc.

Thanks for your very thorough reply

Lots to think about here

You mention that 'trading in this manner is very, very tricky'

Could you explain a bit more why you say this

thanks in anticipation

 

[The Leopard]

Thanks for your very thorough reply

Lots to think about here

You mention that 'trading in this manner is very, very tricky'

Could you explain a bit more why you say this

thanks in anticipation

Typically you'd use very tight stops, so easy to get washed.

Transaction costs / spread are hugely significant.

Above all, there are so many opportunities to get things wrong when you're down at this level.

 

[samirs]

Here's a 1M chart - matches IG almost perfectly - people always go on about 'bucket shops' but to be honest I've had very little problem with IG during the 6 years I've been with them.

actually I would agree with you. there are a lot people here trying to scare off people off bucket shops and with good intentions. But most of the times the problem is with the spreadbetter themselves than any of the tricks of the bucket shops. One of the biggest problem with spread betting (which ironically is perceived as its only benefit) is ability to trade small.

But that actually makes one careless in terms of money management, instills wrong practices and worst thing leads to chasing losses / death by thousand cuts.

And then the punter ends blaming spread betting company.