IG Index - you've been warned!!!

[Black Swan]

Apologies to Black Swan for being abusive to him. I should have bitten my tongue but, I felt that he was unnecessarily arrogant and dismissive of Maudy's predicament.

Those of us who have traded for many years have made loads of mistakes. No one is born a trader; we all have to learn. It's a tough business.

No sweat mate, it's a birth by a thousand cuts..

 

[maudy]

Hi guys,

Thanks for all the replies to my post. Of course, there have been some excellent, practical responses. Of course, one or two abusive posters had to give their tuppence worth too...but as they say, in every bunch of roses you always find the odd prick!

Of course, as a new enough trader, I am very grateful to get a reality check about my situation but a couple of points I wanted to make are:

a) as I have been placing mechanical style orders of small enough stops and limits, I just treated Friday like any other day for trading - to be honest I didn't even know that 'big news' was just around the corner! Of course, for future reference, this is something I need to be aware of going forward
b) My actual trading balance was 7,500. The reason I only had just over 1,000 on account with IG was because I only wanted to release funds to them as and when the account needed it, and hoped that if the account did get smashed then they would only take me for my balance. Therefore, my 10 point stop loss was set so that each trade was only really 1% of my opening account size
c) I appreciate that the markets moved very quickly around 1.30pm, but as my pip by pip figures show, surely there were many opportunities to close out my second trade earlier(and the first trade should have been a winner?). Surely, if things moved 'that quickly' then they would not have been able to fill my order at such a precise price(my exact order level), yet they seemed to ignore the fact that my win limit was actually hit/exceeded before the price reversal, and as my stats show, there were many price levels that occurred prior to the one they 'chose' as my stop out price - which co-incidentally happened to be the lowest price it got to around that time before the recovery began!!!!
This is why the 2 compromises I have suggested do not seem unreasonable to me???

 

[maudy]

The bottom line is that I don't like losing, but accept it as part of trading, and life in general. However, I do have a problem with losing unfairly...

 

[gle101]

Hi guys,

Thanks for all the replies to my post. Of course, there have been some excellent, practical responses. Of course, one or two abusive posters had to give their tuppence worth too...but as they say, in every bunch of roses you always find the odd prick!

Of course, as a new enough trader, I am very grateful to get a reality check about my situation but a couple of points I wanted to make are:

a) as I have been placing mechanical style orders of small enough stops and limits, I just treated Friday like any other day for trading - to be honest I didn't even know that 'big news' was just around the corner! Of course, for future reference, this is something I need to be aware of going forward
b) My actual trading balance was 7,500. The reason I only had just over 1,000 on account with IG was because I only wanted to release funds to them as and when the account needed it, and hoped that if the account did get smashed then they would only take me for my balance. Therefore, my 10 point stop loss was set so that each trade was only really 1% of my opening account size
c) I appreciate that the markets moved very quickly around 1.30pm, but as my pip by pip figures show, surely there were many opportunities to close out my second trade earlier(and the first trade should have been a winner?). If, their real prices were 20 points lower than their charts showed, as it may have been suggested by somebody, then surely my orders would not have 'kicked in' in the first place? Yet they just happened to allow my orders to open at EXACTLY the price I requested!
This is why the 2 compromises I have suggested do not seem unreasonable to me???

I am involved in a project visualrmm.com, that deals with this very important aspect of trading. Risk & Money Management is no.1 trading rule for a successful trader. Natural statistical variation is bound to occur, and when these kick in one should be prepared enough to be able to stay in the game.
Have a look, you might find it interesting, we will go live in September.

 

[donaldduke]

The bottom line is that I don't like losing, but accept it as part of trading, and life in general. However, I do have a problem with losing unfairly...

You have just learnt the hard way that spread betting is inherently unfair.

The closest to fairness is an account with a direct market access firm like IB.

Real DAX futures have a bet size increment of 25 euro a point, you cant trade 7.5 euro a point on the DAX in the real world. So you probably want to start off trading either Eurostoxx 50 futures or CAC40 futures. Both these are 10 euro a lot and the intra day point movement range is much less than the dax too.

 

[Splitlink]

The bottom line is that I don't like losing, but accept it as part of trading, and life in general. However, I do have a problem with losing unfairly...

Without going into the pros and cons of SB, which has been done to death for me, if not for others, I suggest that your bottom line of not liking to lose has not been accepted, otherwise you would not put all your eggs in one basket, in a **** or bust attitude.

When you have accepted that you will lose, and always when you think it unlikely, will I consider your dependants out of danger.

I don't know how old you are but the younger your age, the more patient you can be, I am old, my family is secure, and can afford to take risks, although I choose not to take them as it is bad business practice. Old habits die hard.

Take it easy---you'll be ok.

 

[maudy]

Without going into the pros and cons of SB, which has been done to death for me, if not for others, I suggest that your bottom line of not liking to lose has not been accepted, otherwise you would not put all your eggs in one basket, in a **** or bust attitude.

When you have accepted that you will lose, and always when you think it unlikely, will I consider your dependants out of danger.

I don't know how old you are but the younger your age, the more patient you can be, I am old, my family is secure, and can afford to take risks, although I choose not to take them as it is bad business practice. Old habits die hard.

Take it easy---you'll be ok.

For the record I am 37, married and with 2 kids. Trading for me is a part time way of trying to make more money, on top of my other work commitments. To say that placing 2 orders of 1% each of my starting capital(based on my stop losses in force) is a s##t or bust attitude is a bit unfair, but when one spike robs me of 20% of my balance in an unfair manner I think I have reason to complain and be more than a little despondent about trading in general

 

[x4x]

For the record I am 37, married and with 2 kids. Trading for me is a part time way of trying to make more money, on top of my other work commitments. To say that placing 2 orders of 1% each of my starting capital(based on my stop losses in force) is a s##t or bust attitude is a bit unfair, but when one spike robs me of 20% of my balance in an unfair manner I think I have reason to complain and be more than a little despondent about trading in general

I think most should see that you weren't trying to make it big quick, but have just been a bit unfortunate due to your lack of experience. The problem IG have is if they scrub your trades they will likely have to scrub several (hundred) others.

I think the only thing that you must learn from this is to trade at 1 pound per point until you are certain of what you are doing - this will likely take 2 or 3 years.

 

[gle101]

For the record I am 37, married and with 2 kids. Trading for me is a part time way of trying to make more money, on top of my other work commitments. To say that placing 2 orders of 1% each of my starting capital(based on my stop losses in force) is a s##t or bust attitude is a bit unfair, but when one spike robs me of 20% of my balance in an unfair manner I think I have reason to complain and be more than a little despondent about trading in general

If you apply proper Risk & Money Management correctly you will not get yourself in this kind of situation. This means you will not trade when there is a risk of your basic RMM strategy to default. You didn't know about the important figures the day in question, you should have been prepared on what was coming. Also when trading SB, you have to be double secure not to let yourself totally in the hands of a market maker. Everybody makes this kind of mistake (especially in the first years of trading), the traders who say they don't is simply not telling the truth.

 

[gle101]

You have just learnt the hard way that spread betting is inherently unfair.

The closest to fairness is an account with a direct market access firm like IB.

Real DAX futures have a bet size increment of 25 euro a point, you cant trade 7.5 euro a point on the DAX in the real world. So you probably want to start off trading either Eurostoxx 50 futures or CAC40 futures. Both these are 10 euro a lot and the intra day point movement range is much less than the dax too.

Are you serious, it is like giving a loaded gun to somebody who had no practice how to handle it.

 

[maudy]

I appreciate all of the constructive and, mainly, educational points that are made. However, my beef here with IG is:

a) if the price quickly spiked up and down with no other price changes in between(I guess a version of 'gapping') then I would accept it as an unfortunate loss. e.g if it jumped above my order to buy and then quickly reversed then I would have to accept the downward price it landed on
b) as the sequence of pip prices showed, they not only opened my orders but did so at EXACTLY the order price I requested, proving that these fast incremental changes were manageable to them at the early part of the trades
c) my first trade should have won as there were 3 different pip prices at levels more than 15 points(my limit) above my opening price(18-19 points) and the spread is only 1 point, before the market moved against me
d) there were many, many pip prices that they could(should) have used to execute my stop loss order but instead decided to take the price which suited them best(the lowest price) during this volatile period.

I honestly think that they waited until recovery began before determining what the optimum result would be for them. If say they executed the orders to buy but at prices above my order price, then they would have more clout when it comes to proving that this fast moving market was too quick for them to execute the trade fairly???

 

[x4x]

I appreciate all of the constructive and, mainly, educational points that are made. However, my beef here with IG is:

a) if the price quickly spiked up and down with no other price changes in between then I would accept it as an unfortunate loss. e.g if it jumped above my order to buy and then quickly reversed then I would have to accept the downward price it landed on
b) as the sequence of pip prices showed, they not only opened my orders but did so at EXACTLY the order price I requested, proving that these fast incremental changes suited them at the early part of the trades
c) my first trade should have won as there were 3 different pip prices at levels more than 15 points above my opening price(18-19 points) and the spread is only 1 point, before the market moved against me
d) there were many, many pip prices that they could(should) have used to execute my stop loss order but instead decided to take the price which suited them best(the lowest price) during this volatile period.

I honestly think that they waited until recovery began before determining what the optimum result would be for them. If say opened the orders but at prices above my order price then they would have more clout when it comes to proving that this fast moving market was too quick for them to execute the trade fairly???

Fair comment and I think you deserve, and IG should feel compelled to offer you a full and detailed explanation - it'll be interesting to see if they provide it.

 

[donaldduke]

I think I have reason to complain and be more than a little despondent about trading in general

You should be despondent about your own ignorance.

You made so many mistakes:

1. You were DAY trading with a Spread Bet firm. Just because you can doesn't mean you should.
2. You weren't aware the most volatile market news of the month, NFP numbers, was about to come out.
3. You were over leveraged, you are using over 10:1 leverage at a time when the markets are very volatile even outside of news events like NFP.
4. You weren't aware of the kind of slippage you can expect with a spread betting firm during market spikes (around news or otherwise).

No point complaining.. take responsibility for you own mistakes and learn from them.

 

[gle101]

I appreciate all of the constructive and, mainly, educational points that are made. However, my beef here with IG is:

a) if the price quickly spiked up and down with no other price changes in between(I guess a version of 'gapping') then I would accept it as an unfortunate loss. e.g if it jumped above my order to buy and then quickly reversed then I would have to accept the downward price it landed on
b) as the sequence of pip prices showed, they not only opened my orders but did so at EXACTLY the order price I requested, proving that these fast incremental changes were manageable to them at the early part of the trades
c) my first trade should have won as there were 3 different pip prices at levels more than 15 points(my limit) above my opening price(18-19 points) and the spread is only 1 point, before the market moved against me
d) there were many, many pip prices that they could(should) have used to execute my stop loss order but instead decided to take the price which suited them best(the lowest price) during this volatile period.

I honestly think that they waited until recovery began before determining what the optimum result would be for them. If say they executed the orders to buy but at prices above my order price, then they would have more clout when it comes to proving that this fast moving market was too quick for them to execute the trade fairly???

If you think they have executed unfairly, write to them several times. The SB companies have a tendency not to accept any fault on their side in the first attempt of a complain. Still you are in the hands on what they decide (avoid this in the future). Also do some research, there might be some other SB company that will suit your need better.

 

[gle101]

You should be despondent about your own ignorance.

You made so many mistakes:

1. You were DAY trading with a Spread Bet firm. Just because you can doesn't mean you should.
2. You weren't aware the most volatile market news of the month, NFP numbers, was about to come out.
3. You were over leveraged, you are using over 10:1 leverage at a time when the markets are very volatile even outside of news events like NFP.
4. You weren't aware of the kind of slippage you can expect with a spread betting firm during market spikes (around news or otherwise).

No point complaining.. take responsibility for you own mistakes and learn from them.

I don't think he made "so many mistakes".

 

[tar]

I appreciate all of the constructive and, mainly, educational points that are made. However, my beef here with IG is:

a) if the price quickly spiked up and down with no other price changes in between(I guess a version of 'gapping') then I would accept it as an unfortunate loss. e.g if it jumped above my order to buy and then quickly reversed then I would have to accept the downward price it landed on
b) as the sequence of pip prices showed, they not only opened my orders but did so at EXACTLY the order price I requested, proving that these fast incremental changes were manageable to them at the early part of the trades
c) my first trade should have won as there were 3 different pip prices at levels more than 15 points(my limit) above my opening price(18-19 points) and the spread is only 1 point, before the market moved against me
d) there were many, many pip prices that they could(should) have used to execute my stop loss order but instead decided to take the price which suited them best(the lowest price) during this volatile period.

I honestly think that they waited until recovery began before determining what the optimum result would be for them. If say they executed the orders to buy but at prices above my order price, then they would have more clout when it comes to proving that this fast moving market was too quick for them to execute the trade fairly???

It is not important how many price stamps there was between your requested level and the filled level , it is about liquidity , everyone wants an exit but how much liquidity is available in each price stamp . But you could try and complain about the take profit order for the first trade .

" If your Order is triggered (as set out in Term 11(1) above) we will seek to open/
close the Bet to which your Order relates, acting in accordance with our duty of best
execution. In the case of a Stop Order, we will seek to open/close a Bet at a level that
is the same (but may be worse) than your stop level; and in the case of a Limit Order,
we will seek to open/close a Bet at a level that is the same or better than your limit.
You acknowledge and agree that the time and level at which Orders are executed will
be determined by us, acting reasonably. In this regard:
(a) We will seek to execute your Order within a reasonable time of your Order
being triggered. Because there may be a manual element to our processing of
Orders and because it is possible for a single sudden event to trigger a large
number of Orders, you acknowledge that what constitutes a “reasonable time”
may vary according to the size of your Order, the level of activity in the Underlying
Market, and the number of Orders that have been triggered at the time your
Order is triggered.
(b) At the time we are seeking to execute your Order, we will have regard to
the price that could be achieved in the Underlying Market for a similar order
(including as to size). "

 

[Splitlink]

You should be despondent about your own ignorance.

You made so many mistakes:

1. You were DAY trading with a Spread Bet firm. Just because you can doesn't mean you should.
2. You weren't aware the most volatile market news of the month, NFP numbers, was about to come out.
3. You were over leveraged, you are using over 10:1 leverage at a time when the markets are very volatile even outside of news events like NFP.
4. You weren't aware of the kind of slippage you can expect with a spread betting firm during market spikes (around news or otherwise).

No point complaining.. take responsibility for you own mistakes and learn from them.

I morning trade with a Spread Bet firm and have done for years. Should I? That depends on how successful I have been.

The rest of your points have logic. SB firms are not the problem, IMO.

Let's be clear about my stance. I do not like SB firms over brokers. Brokers are honest? In a pig's ****! The difference that I see for new people starting to trade is budget. Buying a contract with a broker comes at 10 pounds per point. The profit is taxable. I've been down that road. Get it wrong is not only expensive, it is ruinous.

Maudy's mistake was in thinking that he could bet big with an SB firm because they were cheaper in overheads ie. lower margins and no tax because it is betting.. Lower margins, for him, meant that he could have higher stakes. In my case, lower margins and lower stakes meant that I would last longer.

I take money out on a regular basis, otherwise I would be trading with higher stakes than I do but I believe that all this is a question of attitude.

 

[gle101]

I morning trade with a Spread Bet firm and have done for years. Should I? That depends on how successful I have been.

The rest of your points have logic. SB firms are not the problem, IMO.

Let's be clear about my stance. I do not like SB firms over brokers. Brokers are honest? In a pig's ****! The difference that I see for new people starting to trade is budget. Buying a contract with a broker comes at 10 pounds per point. The profit is taxable. I've been down that road. Get it wrong is not only expensive, it is ruinous.

Maudy's mistake was in thinking that he could bet big with an SB firm because they were cheaper in overheads ie. lower margins and no tax because it is betting.. Lower margins, for him, meant that he could have higher stakes. In my case, lower margins and lower stakes meant that I would last longer.

I take money out on a regular basis, otherwise I would be trading with higher stakes than I do but I believe that all this is a question of attitude.

I agree, although I see nothing wrong in trading with higher stakes. This as long a proper RMM is applied and the stakes is within your own "comfort" line.

 

[mrfigure]

Whats the problem with day trading with an sb firm ?...whether he made many mistakes or not, we are talking about ig's management of the trade once opened, and I happen to think the op has a point. Its difficult not to look at incidents like this without forming the opinion that the sb firm has 'conveniently' come out better off ! I also agree that this slippage malarky is nothing but a load of ****.

 

[Splitlink]

Whats the problem with day trading with an sb firm ?...whether he made many mistakes or not, we are talking about ig's management of the trade once opened, and I happen to think the op has a point. Its difficult not to look at incidents like this without forming the opinion that the sb firm has 'conveniently' come out better off ! I also agree that this slippage malarky is nothing but a load of ****.

One thing that we can be assured of with IG is that they intend their guaranteed stop facility to be used. I've learned that lesson and I am not a client of theirs! As far as the "take profit" order is concerned, I have checked around and the charts appear to agree so, although it was close, they were in their rights not to trigger it.That whole area was littered with sell orders and stops. The market decided to take them out., Hard luck Maudy, but that happens to all of us.