Help Required!!!

[maudy]

Hi ladies and gentleman from a new forum user looking for a little help.

In the past I have traded recklessly, without a plan or proper strategy, and, inevitably, lost what I had put in. So I took a gap from executing trades, and after spending lots of time on backtesting and forward testing ideas, I have recently started to implement 1 or 2 of these theories in the hope they will continue to be profitable. They are based on the specific opening hour price of the Dax 30 and the orders are to be executed at the opening price, when it gets hit in the direction of the trend, after going in one direction and then reversing(I'm sure there is a term for this but I call it reversal momentum for my benefit!) The deal is that after the price goes in one direction for a minimum number of points and then reverses back through the opening price, a new momentum is being built up and I 'catch' the trade on it's way back. This can, of course, happen more than once in an hour if a 'double reversal' occurs.

The good news is that the theories still hold true, and working on disciplined stop losses and gain limits(stops of 10 and limits of 15) based on predetermined order values, a tidy profit should still hold up. For example, on Friday I placed 15 orders(buy or sell) at different times of the day at specific prices. Had these been executed correctly(by IG Index, my Spread Betting Provider) then I would have won 8 and lost 7, giving me a pip gain of 50 points(8 x 15) - (7 x 10). This is after allowing for their 1 point 'house edge' on each trade.

However, due to the fact that IG Index decided to rip me off, instead of a 55 point gain I ended up with a loss! This was due to them:
a) opening some orders at up to 3 points out(if they opened at the exact price then I would have had up to a 3 point headstart on the trade).
b) extending stop losses beyond the 10 points(one trade was as high as 14 points, but of course, the gain limits were never increased by 0.1 of a point)

As a result, 2 of the trades should have been +15 but ended up as -10 and -11.5 respectively due to wrong opening prices and, on the one occasion, an increased stop loss(double frustration for me). On another couple of trades the losses were between 11.8 and 14, instead of the requested 10. All in all, my result of -8 points is 58 points less than it would have been(an average of nearly 4 points per trade, which technically pushes their spread from an advertised 1 point to nearly 5 points!)
The above example only relates to 1 day of trading and on other occasions they have 'increased their edge' to suit them, but not to this extent.

I am frustrated as I honestly feel that I have a good system here and for the first time, even after suffering the above, I have not been chasing losses, etc as I have put a lot of research in to my strategies(hundreds of hours) and have a rigid trading plan and money management strategy in place which allows me to trade properly and not gamble my money away.

Does anybody know of anything I can do which will allow me to test my system properly with a reputable company which does not consistently take the pi$$, or simply have any ideas to help me going forward??? I have tested many other permutations for the above, but the 15/10 strategy here gives me by far the best results from the testing done so far. Guaranteed stop losses would cost me too much due to my low exit requirements, and they would not improve the ability to execute the opening price properly by them anyway so I could be double paying for something that still does not hold up!

Sorry about the length of this letter, but any help from you more experienced guys and girls would go a long way to helping me decide if I am to continue trading or whether I should jack it in for good, to avoid total frustration and despair!!!!

I am happy to give them their 1 point spread edge but am reluctant to watch my profits go down the drain because of their greed

Craig

 

[rawrschach]

shortsandlongs have guaranteed stops try them

 

[pboyles]

Hi ladies and gentleman from a new forum user looking for a little help.

In the past I have traded recklessly, without a plan or proper strategy, and, inevitably, lost what I had put in. So I took a gap from executing trades, and after spending lots of time on backtesting and forward testing ideas, I have recently started to implement 1 or 2 of these theories in the hope they will continue to be profitable. They are based on the specific opening hour price of the Dax 30 and the orders are to be executed at the opening price, when it gets hit in the direction of the trend, after going in one direction and then reversing(I'm sure there is a term for this but I call it reversal momentum for my benefit!) The deal is that after the price goes in one direction for a minimum number of points and then reverses back through the opening price, a new momentum is being built up and I 'catch' the trade on it's way back. This can, of course, happen more than once in an hour if a 'double reversal' occurs.

The good news is that the theories still hold true, and working on disciplined stop losses and gain limits(stops of 10 and limits of 15) based on predetermined order values, a tidy profit should still hold up. For example, on Friday I placed 15 orders(buy or sell) at different times of the day at specific prices. Had these been executed correctly(by IG Index, my Spread Betting Provider) then I would have won 8 and lost 7, giving me a pip gain of 50 points(8 x 15) - (7 x 10). This is after allowing for their 1 point 'house edge' on each trade.

However, due to the fact that IG Index decided to rip me off, instead of a 55 point gain I ended up with a loss! This was due to them:
a) opening some orders at up to 3 points out(if they opened at the exact price then I would have had up to a 3 point headstart on the trade).
b) extending stop losses beyond the 10 points(one trade was as high as 14 points, but of course, the gain limits were never increased by 0.1 of a point)

As a result, 2 of the trades should have been +15 but ended up as -10 and -11.5 respectively due to wrong opening prices and, on the one occasion, an increased stop loss(double frustration for me). On another couple of trades the losses were between 11.8 and 14, instead of the requested 10. All in all, my result of -8 points is 58 points less than it would have been(an average of nearly 4 points per trade, which technically pushes their spread from an advertised 1 point to nearly 5 points!)
The above example only relates to 1 day of trading and on other occasions they have 'increased their edge' to suit them, but not to this extent.

I am frustrated as I honestly feel that I have a good system here and for the first time, even after suffering the above, I have not been chasing losses, etc as I have put a lot of research in to my strategies(hundreds of hours) and have a rigid trading plan and money management strategy in place which allows me to trade properly and not gamble my money away.

Does anybody know of anything I can do which will allow me to test my system properly with a reputable company which does not consistently take the pi$$, or simply have any ideas to help me going forward??? I have tested many other permutations for the above, but the 15/10 strategy here gives me by far the best results from the testing done so far. Guaranteed stop losses would cost me too much due to my low exit requirements, and they would not improve the ability to execute the opening price properly by them anyway so I could be double paying for something that still does not hold up!

Sorry about the length of this letter, but any help from you more experienced guys and girls would go a long way to helping me decide if I am to continue trading or whether I should jack it in for good, to avoid total frustration and despair!!!!

I am happy to give them their 1 point spread edge but am reluctant to watch my profits go down the drain because of their greed

Craig

Why do people spreadbet or trade retail forex when you have to put up with this nonsense. Either get a futures account or forget about the whole thing, how are you going to make money when they are creating slippage like that?

 

[Splitlink]

Why do people spreadbet or trade retail forex when you have to put up with this nonsense. Either get a futures account or forget about the whole thing, how are you going to make money when they are creating slippage like that?

I spreadbet and have done for decades. There have been a few anti IG comments, lately and where there is smoke there is fire. My first SB company was IG and I have now been with Finspreads since they started up. The telephone trading was so difficult that when I finally got through and, irately, said that I had been trying to get through to a dealer for 10 minutes the answer was "I'm so sorry, Sir, what did you want to close at?" "-----level, alright, we"ll close you for that. Have a good day".

Those were the days, alas, long gone!

Hey! Not everyone likes Fins, either! Everyone to his own.

Why did I leave IG? Can't remember, but that is what I did. Others should do the same.

I'd like to add that when I started spreadbetting there was no one else. Then, I believe, City Index came along, followed by the rest. There is, now, a lot of competition.

 

[Black Swan]

In theory your edge (what you think is one) is correct, however, you've made the fatal flaw of not playing the game...their game..

You know that phrase about forgetting the golden rule "he who has the gold makes the rules"? Well I'd also add; "don't hate the game, or hate the players, learn to play their game and play the players..."

In all trades I take I mentally build in a 10-15% 'tw@t factor', I honestly expect roughly one in ten trades to go wrong and the system to take 10-15% of my winnings over and above the agreed cost of doing business. It's not even a trust issue, it is how it is..

IMHO your strat (you think it's an edge) is cutting it too fine. You can't possibly play that game/set up from the comfort of you home office on a wireless network, on a 1-2 screen set up bought from pc world 4 years back..your strat is akin to 'prop shop tactics', feeding off the spread or taking one tick, the execution is that crucial, too crucial in your instance.

If you want to spread bet imho your have only two ways to ensure that the tw@t factor doesnt impact too much on your trading, swing and or position trade. Setting orders, stops, timing it with fast moving markets etc. is a recipe for disaster imho, nothing wrong with the science, just the reality and practicality.

 

[new_trader]

‘Mechanical’ trading strategies like yours are based on complete ignorance of the real market and will invariably result in losses like you have experienced. Although they are not paragons of transparency, spread-betting companies will always be made the scapegoats for such strategies.

 

[Black Swan]

New Trader's 'twitter lite' summation is harsh but fair..you're expecting the market and the system to give you what you want based on your theory..re-engineer your personal hard drive first.

 

[pboyles]

These are all the same excuses we heard about forex companies not so long ago. Now we have had the biggest two heavily fined for dishonest slippage practices and we are supposed to believe that spreadbetting companies aren't doing the same thing. They will take as much money off you as they think they can get away with, sooner or later this will be exposed, just as it has been in fx.

 

[DaddyJohn]

What you have here is a scalping strategy, which is fine but I would not scalp using a spread better. For all the reasons you mention yourself. If you are serious and do this full time, the. You should be using one of the pro tools like TT or Stellar. However, they are costly and you will pay several hundred pounds in license costs per month. There are cheaper options like Ninja Trader you can check out. Another alternative is to look at Pro Spreads, they have a ladder based execution tool which seems to combine what the benefits of spread betting and pro based DMA tools. I have not used it myself in anger, I just tried the demo version which looked ok , but was not right for someone like me that scalp maybe 100 trades a day. I am also sceptical of any sb company and the ability of there platforms to perform during large Market volatility. But have a look at it, you can always use the demo and try out your trading strategy.

 

[brettus]

These are all the same excuses we heard about forex companies not so long ago. Now we have had the biggest two heavily fined for dishonest slippage practices and we are supposed to believe that spreadbetting companies aren't doing the same thing. They will take as much money off you as they think they can get away with, sooner or later this will be exposed, just as it has been in fx.

I think there's a lot of valid points made here. You can't expect that much from them. What size have you been trading btw?

I hope they do get exposed, because that slippage is pretty bad. They don't need to be unreasonable to make money. If they don't hedge it in the market, that's their problem not the customers. I don't understand why if they simply hedged it in the market you would have been filled at your price, but if they don't like they do, then you get bad slippage. If they don't hedge it in the market, that's their risk not the customers! Get a futures account then send them a screenshot of all the last trade prints around the time your stop got filled and ask them why you had 4 points slippage when the market traded 10 lots at your stop price for example.

Spreadbetting companies aren't completely useless but like black swan said, they are only good for position trading or swing trading. Scalping on IG is a bad idea. If i scalp on ig, i only get filled when the price goes against me, but i've accepted that and rarely scalp on there anymore.

 

[pboyles]

What you have here is a scalping strategy, which is fine but I would not scalp using a spread better. For all the reasons you mention yourself. If you are serious and do this full time, the. You should be using one of the pro tools like TT or Stellar. However, they are costly and you will pay several hundred pounds in license costs per month. There are cheaper options like Ninja Trader you can check out. Another alternative is to look at Pro Spreads, they have a ladder based execution tool which seems to combine what the benefits of spread betting and pro based DMA tools. I have not used it myself in anger, I just tried the demo version which looked ok , but was not right for someone like me that scalp maybe 100 trades a day. I am also sceptical of any sb company and the ability of there platforms to perform during large Market volatility. But have a look at it, you can always use the demo and try out your trading strategy.

Reliable futures platforms with a trading ladder can be had for $50 a month and above. Global futures and Velocity futures are two brokers that spring to mind. I've been trading futures for about 3 years or so and I've never seen a platform freeze, regardless of volatility, even on the most basic of platforms.

 

[tar]

Maudy

Slippage is part of the game , you will get slippage everywhere not only with IG , futures trading : mmm , i prefer futures but you will not only get slippage you even could get stuck in a trade for a few hours when the exchange is down , like what happened to the Ftse futures 2 weeks ago ! can you imagine ! .
Finspreads ( Cityindex ) : they are the worst in fast market conditions like the current conditions , check the spreadbetting sector and you will see the bad reviews .
It will not hurt to try different bookies if you want try CMC . But i don't think this is the problem , your tight stop in volatile times isn't working that's the problem , you know what try trading your method on the Dax with a futures demo account with ninjatrader and tell us about the horrible slippage u will get .

 

[pboyles]

Yeah if you trade onion futures or some other crap. If you trade the e mini s&p or the Eurostoxx you won't see any unless you're trading a very large number of contracts. I trade up to 10 and have never noticed a single tick of slippage.

 

[tar]

Yeah if you trade onion futures or some other crap. If you trade the e mini s&p or the Eurostoxx you won't see any unless you're trading a very large number of contracts. I trade up to 10 and have never noticed a single tick of slippage.

I said Dax , that's what he is trading . And it depends on your trading method , even with the ES you could get some slippage .

 

[pboyles]

What's the daily volume on the dax compared to the Eurostoxx for instance? Is it about a tenth?

 

[tar]

yeah

 

[pboyles]

He should try his system on the Eurostoxx then. If it works problem solved. Dax requires a larger margin too if I remember correctly, couple of grand??

 

[G.O.A.T]

He should try his system on the Eurostoxx then. If it works problem solved. Dax requires a larger margin too if I remember correctly, couple of grand??

pb I seem to recall you mentioned that the Eurostoxx and was it the S+P is spread free, Am i right? If so, what is cost to open and close a trade? Tia.

 

[Splitlink]

in all trades i take i mentally build in a 10-15% 'tw@t factor',

 

[new_trader]

Yeah if you trade onion futures or some other crap. If you trade the e mini s&p or the Eurostoxx you won't see any unless you're trading a very large number of contracts. I trade up to 10 and have never noticed a single tick of slippage.

Slippage has nothing to do with the number of contracts traded.