FTSE 100: Cash vs. future

[Vrothdar]

I've recently become interested in trading and have been considering spread betting as a way to get involved with a small initial investment.

The main instrument I've been looking into is the FTSE 100 cash on an intraday basis. It is my understanding that when spreadbetting dailies you are usually betting against the futures market however I've noticed a couple of SB companies offering two types of dailies.

The attachment is from IGindex's dealing handbook. Would I be correct in saying that the "Daily FTSE 100" would be a bet against the cash price and the "Daily FTSE 100 Futures" would be a bet against the futures price?

I've also got a question about scalping. I'm aware that scalping and spreadbetting don't mix and would like to get some clarification of whether or not a total of 1 - 2 trades lasting 10 - 30mins each day exiting at a 10 point gain (each trade) would be considered scalping. Previously I thought scalping would involve a much larger number of shorter trades however some of the posts I've read recently have led me to believe that the method I'm currently working on could be considered scalping.

Thanks.

 

[tar]

1-2 trades no problem , maybe 20 - 40 would be a problem

 

[tomorton]

Are you sure scalping or multiple daytrading is the only right mechanism for you? If you're considering 10pts as your profit target, that suggests you would have to consider 10pts as your max loss also, but preferably less. Most instruments I have seen on SB plaform that are volatile enough to offer multiple entry levels per day are also way too volatile to offer a realistic stop at only 10pts, so the game becomes a pure coin-tossing exercise as to which level is hit first - profit or loss. What about swing trading on a longer time-frame?

 

[cryten]

Read some of Nkrugers posts, he makes a living I beleive scalping with sb companies.

 

[Splitlink]

I've recently become interested in trading and have been considering spread betting as a way to get involved with a small initial investment.

The main instrument I've been looking into is the FTSE 100 cash on an intraday basis. It is my understanding that when spreadbetting dailies you are usually betting against the futures market however I've noticed a couple of SB companies offering two types of dailies.

The attachment is from IGindex's dealing handbook. Would I be correct in saying that the "Daily FTSE 100" would be a bet against the cash price and the "Daily FTSE 100 Futures" would be a bet against the futures price?

I've also got a question about scalping. I'm aware that scalping and spreadbetting don't mix and would like to get some clarification of whether or not a total of 1 - 2 trades lasting 10 - 30mins each day exiting at a 10 point gain (each trade) would be considered scalping. Previously I thought scalping would involve a much larger number of shorter trades however some of the posts I've read recently have led me to believe that the method I'm currently working on could be considered scalping.

Thanks.

I'm with Fins. I put both charts on the screen and, apart from the difference in price, they have the same rise and fall. I like daily Future because I have to go out so, if my stops don't get triggered I won't get rolled over until the next day. The Rolling FT I, also, like because you can zoom out and see where the highs and lows are for the previous month.

I've never done this, yet, but I think that using both might be useful for reversals.
You can't (please correct me if I'm wrong) do an automatic stop and reverse on the same instrument with Fins so, if you have a limit order on one to open and a stop on the other, that should work the same.

What do you others say? Please don't nag Fins---we've had all that before!

Split

 

[Vrothdar]

Are you sure scalping or multiple daytrading is the only right mechanism for you? If you're considering 10pts as your profit target, that suggests you would have to consider 10pts as your max loss also, but preferably less. Most instruments I have seen on SB plaform that are volatile enough to offer multiple entry levels per day are also way too volatile to offer a realistic stop at only 10pts, so the game becomes a pure coin-tossing exercise as to which level is hit first - profit or loss. What about swing trading on a longer time-frame?

My methods still need some more serious back testing before I start paper trading it but currently look rather promising when used with a 5pt stop loss. The FTSE cash looks to offer me between 1 and 3 setups per day with a very high success rate. The reason for my two questions was that there's no point in my doing serious back testing and paper trading using the cash figures from advfn if I can only ever spreadbet against the futures. Unless of course I'm missing something with the relationship the two have. Likewise there's little point in my putting this through it's paces if I'm likely to get hassle from SB companies should I find any success with it.

I have considered swing trading, the time frames would probably suit me quite well but I've been having difficulty moving from knowing what a swing is to working out something on the charts that works.

 

[tomorton]

Vrothdar - have a look at Marc Rivalland's method - not revolutionary but effective. Especially posts by Barjon on swingin' the ftse 2008 thread. Key is to be in a trade WITH the trend, always repsect your entry / stop levels, and never risk too large a percentage of your capital. But its nice to have days to plan your positions, rather than minutes.

 

[Vrothdar]

Thanks for the tips. I'll take a look into those. Swing trading would probably compliment my scalping like method quite well (if my method turns out to be workable) as I'd not have to worry quite so much about getting a trade in every day.