Yes and no! You won't have the formal commission charge that you'd have with a direct market access broker (DMA) - but you will have a wider spread. Whichever way you cut it - you end up paying one way or the other. And the spreads can be very wide indeed with some SB companies, such that the cost of trading with them could be higher than it would be trading via DMA.. . .would spread betting help reduce the commission?
Yes, it could. However, if you trade it based solely on the information you've provided here, if it 'works', it will be the result of good fortune rather than skill and judgement. In other words, the next time you try it - it might not work. As it stands, it's not a complete strategy; it's a hypothesis around which a strategy could be built. If it's forward tested and produces a positive expectancy then, at that point, you may have a tradeable, potentially profitable strategy.could it work maybe a couple times a year on the big events?
However Paul writes:
The "Essentials Of ..." are very helpful, after reading 2-3 books and losing some money on spread betting forex, this forum really opens my eyes. Still lots of reading left, but im keen to get started and the first problem i got is to decide what timeframe to choose as a begginer for my trades.
Because of my day job i have only 3-4 hours (realistically)a day for trading left so i guess day trading is not for me, scalping not for begginers, and with swing trading you still better to wait for right setup to come up.
Can you please advice me what timeframe would be optimal to get some experience in trading.
Paper trading has its uses and, certainly, most members would advise paper trading before commiting real money to the markets. At the very least, it will enable you to become familiar with the trading platform you're using and the various different order types etc. Additionally, if your methodology is fundamentally flawed, it's best to discover this whilst trading paper money rather than trading real money. The danger comes when the new trader does very well paper trading and then thinks they'll replicate their success with their live account. They very rarely ever do. The reasons for this can vary but, as you imply, the most common one is the psychological pressures that traders tend to experience when real money is on the line. It's easy to remain calm and detached when trading paper money, less so when it's your hard earned savings. If you've not yet seen it, check out the Essentials Of Trading Psychology Sticky.1) Psychology - is it only during the paper trading stage that you find what kind of trader you are, or whether you're a trader?
Please refer to the answer given to 'akratic', above.2) Timeframe - how do you determine which is right for you? Having read a few charts I feel somewhat averse to intraday, I've always been more of a 'hunter' than a hyena. Again, is this something you determine during your paper days?
This is tricky question to answer! Paulds11 doesn't provide reasons as to why - in his view - spread betting ia a "sophisticated tool not a beginners tool", other than to say that spread betting firms profit when their clients lose. There are many threads that dissect this allegation every which way, so I recommend you check them out and try to come to your own view about the merits or otherwise of spread betting companies. Here are two to get you started:3) Spread betting, which I'd hoped to begin my trading career with. TIm writes:
However Paul writes: .... " Spreadbetting is not a Newbie tool"
I appreciate the two stances are not absolutely mutually exclusive, but what is the situation for the newcomer?
Hi dante3,which book is the best in essentials point of view?
If you mean you wish to open and close trades on an intra-day basis, then most traders tend to use timeframes of an hour or less. However, this is a generalisation and there's no particular time frame that's better than any other. Some traders prefer to dispense with time based charts altogether and, if they use charts at all, prefer to use non-time based charts such as Point & Figure or Renko. For more info' about charts, timeframes and TA, check out this Sticky: Essentials Of Technical AnalysisIf I wish to trade indices live on a daily basis which time frame on TA charts is it best to set at.
No one can answer this for you. Your results will tell you if the idea has merit or not. Look at your success and profit ratios and work out whether or not you have a positive expectancy. If you have, you're in business. If you haven't, you will need to figure out why not and make any necessary adjustments which may (or may not) include the use of MAs breaking trendlines. If you're unfamiliar with any of these terms - they are all explianed in detail in this Sticky: Essentials Of 'Risk & Money Management'Also is the M A breaking the trend line a good criteria to work on. I using the word trend line as in the line showing stock price movement.
There's nothing wrong with 'basic' - most experienced traders advise keeping things as simple and as straightforward as possible. If what you're doing works for you - stick with it and don't worry about what other people think. If you get stuck, you can always ask for help from fellow T2W members. There's a good recent example of the sort of feedback you can expect in this thread: StuckAm I mad considering trading indices with only demo account experience. I have been trading dax,cac,ftsi,dow and done quite well with above strategy. Seems a very basic strategy but maybe I lucky.
Hi Richard,Hi Tim,
Having traded with many companies over the past 7 years, would it be pertinent at all to advise new and existing traders of some of the pitfalls of spreadbetting, as some of these companies employ tactics that hinder traders. It would be helpful to educate them (particularly newbies) to overcome some of these pitfalls? If not here, could you please suggest where it would be appropriate to do so. Thank you, Richard