I am afraid of CMC/Deal4Free please help!

[tradetowin6]

I am afraid of CMC/Deal4Free please help..

Hello everybody,

i want to trade a system which took me very long to develop and it works quite fine at the moment (no extreme gains, but rather constant small gains).
The Problem is i do not have large free equity, which is nesessary to trade my strategy in the real market.
So the only way i see to trade the strategy is, to use a Broker like CMC/Deal4Free who offers me a leverage of 20 (5% Margin for share trading) and not too bad Comissions.
The problem is i read so many negative reports about this Broker , that i am now totally afraid of them.
My main worries are the following:

1.)D4F does only profit if you lose (no hedging?), so if you win they will:
a) Requote you offen which will kill my very small average gains very soon
b) Let you wait a few minutes before you get filled which will also totaly kill my gains

2.) They could steal my Strategy which was very hard to develop.

So i would be very happy if anybody can help me by answering the following questions:

Do you think my worries are exagerated?
Do you think D4F will let me make profits without interfering in an unfair manner?

Thank you all very much for your help

John

 

[chump]

I have tested their services and experienced most of the problems you listed so interpret that anyway you wish. Above that there might be an assumption that a system based on small gains (what is that exactly 4pts , 24 pts , 34 pts ?) may be inappropriate for SB use. Other advices given on these boards would advocate SB's to be more useful for position/swing trading whereby implication the trade over a longer timeframe will return a consistent gain large enough to overcome the gain reducing issues you have mentioned.

 

[FetteredChinos]

Hello everybody,

i want to trade a system which took me very long to develop and it works quite fine at the moment (no extreme gains, but rather constant small gains).
The Problem is i do not have large free equity, which is nesessary to trade my strategy in the real market.
So the only way i see to trade the strategy is, to use a Broker like CMC/Deal4Free who offers me a leverage of 20 (5% Margin for share trading) and not too bad Comissions.
The problem is i read so many negative reports about this Broker , that i am now totally afraid of them.
My main worries are the following:

1.)D4F does only profit if you lose (no hedging?), so if you win they will:
a) Requote you offen which will kill my very small average gains very soon
b) Let you wait a few minutes before you get filled which will also totaly kill my gains

2.) They could steal my Strategy which was very hard to develop.

So i would be very happy if anybody can help me by answering the following questions:

Do you think my worries are exagerated?
Do you think D4F will let me make profits without interfering in an unfair manner?

Thank you all very much for your help

John

yes, i think you are exagerrating things.

firstly they wont steal your strategy. how on earth are they going to work it out? they have thousands of clients. they are onto such a good thing anyway that they dont need the extra hasslehoff.

secondly, you will only get a requote if trying to trade larger sizes.. say £50 a point, so i wouldnt worry on that score either.

thirdly, if you only have a small average gain, then perhaps you should think again, as the spread on this will kill you in the long run.

if using spreadbets, you should try to have an average game at least 5-10 times the spread..

eg on the FTSE your average trade should be at least 20 points, on the dow at least 50..

good luck with it though, there is only one way to find out if your system works..

FC

 

[chump]

"5-10 times "....LOL...that's a fair spread itself

 

[FetteredChinos]

"5-10 times "....LOL...that's a fair spread itself

well i do have a family to feed.. not to mention satisfying my own gut...

 

[chump]

"not to mention satisfying my own gut..".....are we bringing an whole new meaning to the word "spread"

Apologies to TWT6 for the asides..slow day..need a little fun.

 

[SOCRATES]

The root core of the problem is that you are frightened. If you are frightened you ought not to be trading.
You cannot trade effectively with frightened money. you have to overcome your fears first.Try a period of paper trading to see how you make out and give yourself an opportunity to regain your confidence.

 

[LION63]

Deal4Free will only delay filling your orders if you trade relatively illiquid shares or deal in large size. On that basis, you should try and trade the shares that are in the top 25 of the FTSE.

No company offers a one size fits all for traders, some of the gripes on these boards are from those that have got it wrong but fail to accept responsibility for their failings. In other cases (quite a few), the complaints are well founded and one would be well advised to take heed. That said, YOU PAY YOUR MONEY AND TAKE YOUR CHANCES.

 

[wwatson1]

The problem with a system that produces lots of small gains is they are eaten up in spread and commission costs, I would make sure you have taken this into account fully or you will be very dissapointed.

 

[JillyB]

Hi

I've been with Deal4Free since I started trading and I've never had any real problems with them filling orders. However as a new trader I've only been dealing in small trades - £1 a point - to lessen the risk whilst I'm learning. I've also read a lot of bad press about them on this web site - but it mainly seems to be in connection with their customer relations side, not the actual trading platform.

You don't say what you're trading though, UK shares or indices? I trade the Dow Jones as the spread is small taken against the potential gains. Again the spread and the risk/reward ratio is essential to get right. Too little reward leaves too much risk and it's not worth trading.

If you're in any way frightened or doubtful of the trade, then don't do it, you'll only end up losing. The right mentality for trading is essential. I started off with the same fear and really only started having winning trades when I changed my attitude and viewed the money in the pot as already lost, so it didn't matter.

Hope this helps.

 

[tradetowin6]

Hi everybody

And thank you for all your answers.

Yes i didn't mentioned some Things that might be important:

- i want to Trade liquid US Stocks (SP500, Nasdaq100)
- Timeframe 3-5 hours one Trade
- the everage gain would be around 10cts (with D4F Spread 5 cts), this might be a very big
Problem (FetteredChinos already mentioned that), even if everything works as it should, i propably can't afford any requoting...

What would you say?

Thank you

regards

ttw6

 

[zigglewigler]

Average target 10cts/points against 5 point spread with D4F? Forget it! Add on D4F front running of the spread, since it's rarely tight to the underlying, and you're chasing scratch let alone profit. Reward risk ratio is well off!

 

[rinker]

Deal4free-in-fear

Interesting that i have noticed this thread, because: HAVE ANY DEAL4FREE CLIENTS HAD SOFTWARE PROBLEMS TODAY?? Especially approx. 2.45 pm GMT.

The following record of events is not compulsory.
At 2.43 pm today i entered a buy position at 10294spread betting the US30 cash (DOW). i had the chart open, single price window and the new order window minimised.
At 2.44 (ish) i attempted to enter a sell position at 10303. the minimised new order window was not present. it had gone someplace within the page but could not find it. i reopened the US800 display and attempted to open the orders board again.
The window would not open. I went to the tool bar and had similar experience. this meant i could not get out of the trade. the software had locked up i phoned DEAL4FREE and was 2nd in the queue. I rebooted the PC. When i got through at 2.54 the price was at 10274.

The above movements were not corrections but simply announcements to the markets. I shall not bore you much further, although i did not close the trade due to the $ vs euro hitting 6 month high was announced just as i was on the button, there was hope. i was still in the trade and followed it up and got out at exactly 10315 at 3.16 pm. Extremely fortunate.

I have not written this in order to gather sticks against D4Free. Any genuine replies are most welcolm.
Rinker.

 

[Trader333]

the everage gain would be around 10cts

A 10c move over 3 hours on a Nasdaq stock is very low. Can you give some indication of which stocks you wish to trade ?



Paul

 

[stevespray]

Tradetowin6….

Having read what you have stated I would suggest that Direct Access is the only way forward. The only way which you will succeed if your targets are around the 10c mark is by trading directly to market. The spread on CMC US Stocks is 5 cents minimum – that’s 50% of you profit eroded on your best trades.

The minimum requirement for ‘Day – Trading’ on US Stocks is a maintained account balance of $25,000. In all seriousness, if you can not raise such a sum then you are unlikely to succeed. If you trade through a third party (Spreadbet or CFD’s) then you will just find that your account balance will be eroded. This erosion normally leads to frustration which in turn leads on to you breaking your trading rules. In the end your trading will degenerate into the chasing of losses rather than the slow accumulation of profits which you are looking for.

The point which most people miss when they enter trading is the control of losses. Loss control is 100 times easier with direct access in my experience. It’s a psychological issue. When you ‘pay the spread’ on a spreadbet your mind seems to view it like it would when you buy a ticket for a ride at the fun fair – You mentally accept that a certain size of loss is going to occur (in respect of the cost of the spread). Because you pay this spread it becomes harder for you to jump back out of the stock if it isn’t reacting as you suspected it would. This is not so with direct access. Dealing costs are so low you hardly worry about them. Added to that is the fact that you are dealing on a 1 point spread. If you buy a stock thinking that you are joining a trend and subsequently see the stock drop back 2 or 3 ticks then you can get out for a loss of 3 / 4 ticks – not so with spreadbetting where you find yourself 8 points against.

Hope this helps,
Steve.

 

[tradetowin6]

Thank you very much for your answers!

I think i have expressed something wrong:

With the 10cts gain i wanted to say that this is not my trading target but the average gain after the 5cts D4F Comission/Spread. So sometimes i would make 1$ sometimes i would make -30cts, if everything works as it should...

Despite of that i think you are right, i won't have a chance of trading my strategy with D4F properly.
Cause of their OTC tricks..

thank you all

 

[JillyB]

Interesting that i have noticed this thread, because: HAVE ANY DEAL4FREE CLIENTS HAD SOFTWARE PROBLEMS TODAY?? Especially approx. 2.45 pm GMT.

The following record of events is not compulsory.
At 2.43 pm today i entered a buy position at 10294spread betting the US30 cash (DOW). i had the chart open, single price window and the new order window minimised.
At 2.44 (ish) i attempted to enter a sell position at 10303. the minimised new order window was not present. it had gone someplace within the page but could not find it. i reopened the US800 display and attempted to open the orders board again.
The window would not open. I went to the tool bar and had similar experience. this meant i could not get out of the trade. the software had locked up i phoned DEAL4FREE and was 2nd in the queue. I rebooted the PC. When i got through at 2.54 the price was at 10274.

The above movements were not corrections but simply announcements to the markets. I shall not bore you much further, although i did not close the trade due to the $ vs euro hitting 6 month high was announced just as i was on the button, there was hope. i was still in the trade and followed it up and got out at exactly 10315 at 3.16 pm. Extremely fortunate.

I have not written this in order to gather sticks against D4Free. Any genuine replies are most welcolm.
Rinker.

Surprisingly I had my first software problem with D4F last night. Placed a trade which wasn't filled and was cancelled. Waited - fortunately market moved to my advantage - placed another trade, only to see both trades then register on my account.

I had to contact their dealers and test their infamous customer service set-up. Have to say they dealt with the problem straight away. Sorted it out and left me with the trade I wanted. No problems. Have they been taking note of all the negative comments I wonder?

 

[bluetipex]

Interesting that i have noticed this thread, because: HAVE ANY DEAL4FREE CLIENTS HAD SOFTWARE PROBLEMS TODAY?? Especially approx. 2.45 pm GMT.

The following record of events is not compulsory.
At 2.43 pm today i entered a buy position at 10294spread betting the US30 cash (DOW). i had the chart open, single price window and the new order window minimised.
At 2.44 (ish) i attempted to enter a sell position at 10303. the minimised new order window was not present. it had gone someplace within the page but could not find it. i reopened the US800 display and attempted to open the orders board again.
The window would not open. I went to the tool bar and had similar experience. this meant i could not get out of the trade. the software had locked up i phoned DEAL4FREE and was 2nd in the queue. I rebooted the PC. When i got through at 2.54 the price was at 10274.

The above movements were not corrections but simply announcements to the markets. I shall not bore you much further, although i did not close the trade due to the $ vs euro hitting 6 month high was announced just as i was on the button, there was hope. i was still in the trade and followed it up and got out at exactly 10315 at 3.16 pm. Extremely fortunate.

I have not written this in order to gather sticks against D4Free. Any genuine replies are most welcolm.
Rinker.

Rinker

I've been using D4F for about 18 months and never ever had a problem with them. I think their dealing platform is excellent. I also day trade the US30. I also went long yesterday at 15.04 at 10280. At 15.36 i closed at 10309 and went short again. When I open a trade I LEAVE THE WINDOW OPEN and then click on "follow on trade" when I'm ready to close part or all of the position. This I find very satisfactory, and I find my trades are filled almost instantly. I read the reams of bad press about D4F on here, but I'll keep using them because in my opinion they have the best dealing platform by far. I don't think a 4 point spread on the DOW excessive, but I do appreciate however that a 1 point spread in Direct Access is preferable, and one day I will try it out.

 

[dpate]

I think Socrates has a good point - there are 2 main emotions in trading - greed and fear! If you're scared, you shouldnt be trading yet!

However, if your strategy does work well, SB man not be ideal due to the spreads although a lot of the SB firms have only a 2-point spread but SB amy be ok if you're looking to build up your capital rather than pay high commissions to a broker, although this could be a possibility in the L-R.

Also, have you looked at Options - I trade them mainly for US Indices and shares and Im doing very well at the moment (as long as you close your trade before the time decay really kicks in!)

 

[tradetowin6]

...
Also, have you looked at Options - I trade them mainly for US Indices and shares and Im doing very well at the moment ..

Yes i thought about using options, but looking at the options traded on the AMEX (Amex.com) i was very suprised, that the average spread after leverage (omega) is higher than the spread after leverage on D4F (if D4F treats you fair ).

how do you chose your options?

regards

ttw6