Ideal Trading Instrument/broker?

pkfryer

Active member
243 0
I'm changing from Deal4Free, chosen for just the idea that it was 'free' rather than anything else.

Now, I'm after an instrument that will allow me to do intra-day trading with minimal spreads and wont cost a fortune and that closely represents the underlying market.

What is good for intraday? Spread bets, direct access (is this difficult to get and expensive?)?
What is good for swing/short term trading?

What is the best broker for these in your opinion?

Just what to get an idea of what you guys use, and why you use them?
 

JonnyT

Senior member
2,560 22
Now, I'm after an instrument that will allow me to do intra-day trading with minimal spreads and wont cost a fortune and that closely represents the underlying market.

Then you have to trade Direct Access. You then have the choice of Indices, Forex, Treasury Notes etc all with 1 tick spreads. I trade EUR/USD Future almost exclusively at $12.5 per tick

What is good for intraday? Spread bets, direct access (is this difficult to get and expensive?)?
What is good for swing/short term trading?


Intraday trading requires tight spreads and low costs so Direct Access is the way to go. It is not expensive as I am charged $3 per trade by www.interactivebrokers.com
For swing trading then Spreadbets are fine as the spread isn't as important as you are targetting bigger wins.

HTH

JonnyT
 

Indi

Member
50 12
Have to agree with jonny t,been using IB for about 2-3 yrs and are very good brokers and you will find trading the Mini Dow at $5/point,very liquid with 1 point spread during market Hrs,and no problem of 'Execution BIAS' which you suffer with spread betting companies.
slightly less eratic to trade would be Eurostoxx 50,although I haven't looked at it for some time.

Happy Trading
 

kevin546

Established member
699 0
Pkfryer

I see it got you thinking. I have used Interactive Brokers (IB) for FTSE futures index trading ideal for day trading no experience with shares but suspect the same. They are basically the cheapest for commissions but has been suggested this can be at the cost to customer service. I can only say I had no problems.
They are very cheap for US trades.

GNI and Etrade get mentions this will be CFD's and shares but I have no experience of them but pros seem to make use of GNI. I have never traded CFD's so have limited knowledge, better spreads and I suppose an extension of spreadbetting and futures because you are only required to use a small amount of capital to take on a very large position. Downside for longs where you wish to swing trade or longer then you will be hit for interest which can be rather a lot and of course tax. However intraday deals will not be subject to interest but if the position is to large you may have problems exiting as the order gets filled. Certainly I would prefer someone like GNI to one of the spreadbetters offering the CFD package because I am well aware of friends who found it quick to get into large positions but a nightmare to get out, which says it all about spreadbetters and there CFD's.

I think if you are using a strategy for longer holds then spreadbetters are ok but again the size of the deal may cause some problems when closing.

Good luck - would be interested to know how you get on!
 

pkfryer

Active member
243 0
Thanks a lot for your advice... It looks like direct access and IB win hands down!

I've applied for Interactive Broker's Active Trader account, that was before I saw the link for Universal Account? Eek! Can I still get direct access with the Active Trader? (preliminarily I limited myself to index/shares for US/UK... no options or commodities!) But it did say I can change that after I've applied!

Yes Kevin... got me thinking indeed!

I've also applied for the test account of Capital Spread for spread betting as they got some good reviews I think and seem to have very tight spreads!

Once I get use to these new ones I'll withdraw my funds from Deal4Free! Funny thing is... I scanned their whole site and couldn't find any automatic way to withdraw funds!!!! Its got big obvious links to depositing but nothing for withdrawing! But I suppose, if its true that 95% of novice traders fail, theres probably not much need for a withdrawal link!
 

kevin546

Established member
699 0
pkfryer

Good luck. A word of warning, the application process for IB is a right pain! As I said earlier they will offer exchange prices at much better spreads than the spreadbetters and will complete orders instantly so ideal for day trading. You will be subject to CGT and commissions. I do not know the price for shares, I dealt in futures on the FTSE index. One other difference when moving to conventional trading, you will require to either deposit more capital in the case of a CFD account with someone like GNI but then you can use the margin at 10 : 1 although I am not sure if this is such a good thing as it could encourage you to over trade but then so do spreadbetters. To compare IB to CMC then in the case of the FTSE index 1 contract which is £10 a point you would need £1,875 and around double this for overnight, CMC on the other hand requires £500 and CapitalSpreads £300. IB will be cheap and I find then fine but GNI or Etrade may still offer a better all round package, something to be aware of.

Kevin
 

kevin546

Established member
699 0
One last warning a friend of mine decided to close his CMC account, he had to become rather obstinate to get his way but they did close it in the end, so maybe you should expect some delays from them as they try to encourage you to stay with them. Of course the alternative would be to withdraw the majority and leave a little when you want to do some testing.

Kevin
 

pkfryer

Active member
243 0
Thanks for the heads up!

I plan to use the IB account purely for day trading and i will not be trading large at all, full-stop!! I have had my fingers burnt too badly in the past by trading too large when my skill wasn't up to the task! CMC actually encourages you to do bigger trades because the margins are extremely low: 5% in many cases! So it will be a much better discipline enforced by having to put up 25% and pay a commission for every trade! If I can trade the underlying market, with tight spreads and be filled quick on orders. I'll be happy! I'm planning on trading the major index and shares for UK/US.. but I might concentrate on US for day trading!

My plan is to use Capital spread for swing trading/short-term trading.. but I'm going to keep the CMC account open with minimal funds in it just incase it wasn't that bad after all.. and also if I want to test out a few things without paying commissions.

Maybe after I have gained a consistent level of profit and start to trade large positions it might be worth going over to a fixed fee broker like etrade!

I've already gone through the application form and set up a money transfer.. just got to send off my passport and proof of address now! I haven't had a chance to check out a lot of the features of IB yet! It definitely isn't a site/broker for 100% beginners!

Do they do all the order types and trailing stops etc?
 

traderjuk

Junior member
47 0
Have a look at betonmarkets.co.uk....Ive had a bit of success on this.

pkfryer said:
I'm changing from Deal4Free, chosen for just the idea that it was 'free' rather than anything else.

Now, I'm after an instrument that will allow me to do intra-day trading with minimal spreads and wont cost a fortune and that closely represents the underlying market.

What is good for intraday? Spread bets, direct access (is this difficult to get and expensive?)?
What is good for swing/short term trading?

What is the best broker for these in your opinion?

Just what to get an idea of what you guys use, and why you use them?
 

pkfryer

Active member
243 0
Thanks for that traderjuk!
That actually looks very good! A betting site... I never really considered it for trading before! but why not? We are actually just gambling on price movement anyway and there is no difference between using TA for placing a bet for the price to go down or shorting a stock!

I'll give it a try as well!
 

kevin546

Established member
699 0
pkfryer

I tended to trade at market but they do have a range of order you can apply. You can place stops and change them as a position develops. UK stocks are charged at £5 or 0.1 or 0.01% of share value whichever is the greater and stamp duty of course. US shares are traded at 1 cent for each share up to the 1st 500, thereafter it is 0.5 cents for any amount regardless of the value of the share. I think you need around 50% capital to cover a share position. They do options and futures but no CFD's.

Kevin
 
 
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