IG Index

[fmahmood]

Ok Anley,

Thanks for that advice.

I've done that, I have placed a bet on US light crude (March 11) to go up, opened at 9191.0 at 20p per point currently 9121.

I have BP plc (Jun 11) opened at 473.6 at £5 per point, currently 473.80

Are there any others you can recomend?

 

[fmahmood]

I'm reading a lot of bad comments about IG Index on this forum , any of them I should worry about?

 

[anley]

I'm reading a lot of bad comments about IG Index on this forum , any of them I should worry about?

No, I wouldn't worry about them, they're in my opinion the best at best and top 3 at worst. Most people complaining will have had stops too close or other sorts of mistakes, hence they're whining. But most people who're happy with them don't post saying so etc.

But you might also want to consider Capital Spreads, they seem to get goodish reviews.

 

[alphahunter]

Hi Fmahmood,

I used IG index, no complain, good service and they do ring back.
Once I web-traded and pushed the wrong button (sold shares in a micro cap that was having a good run and was trading at a 8% underlying bid-offer spread). I called them within three minutes, the stock was still on their book, they simply cancelled the transaction.

On what type of investor you are, quite frankly, what makes you tick?

Reading the FT and the alphaville blog, downloading companie's trading statements and occasionally listenning to some conf calls?

Following the intricaties of QE2, listenning to Trichet's monthly interest-rates address live on the ECB website and tracking the input cost inflation in the UK?

Scrutinising chart and volume (don't forget the volume - you won't find it on IG Index) looking for some pattern and setting-up a back-tested system that will alert you whenever a winning trade may be made.

In my opinion find first where you interest lies, what excites you. If you are passionate, you are likely to put in the hours that are required (IMO) to make money while lowering the risk you take.

I personnaly enjoy reading transcripts of US companies quaterly conference calls and apply relevant cross-read to UK/European stocks.

 

[montmorencyt2w]

I totally agree, I can safely say I am that idiot...

I am going to start a clean slate in January. Do you recommend keeping trades open for a number of days? What kind of instruments do you recommend? Currencies seem too volatile.

Currently, I have a position open on BP Plc (JUN-11). opening position was 473.6, currently 475.01
P/L: +£7.05
I think this will go up by June to the levels before the big oil leak.

I have tried currencies (EUR/USD), Crude oil, FTSE 100. I have made a fatal mistake of £5/£10 per point, although it worked for me on some trades but I think that may have been pure luck.

Probably.

I wouldn''t start with crude.
Or gold (like I did ...heh heh...).

EUR/USD isn't such a bad one to start on, but not at £5 or £10 per pip.


EDIT: I would encourage demo-ing, but would add that it can be both good and bad.

It is good because it gives you chance to make classic horrendous mistakes in a safe environment.

Not so good because (depending on provider) the platform may not behave quite in the same way, the charts not quite the same, and for example, you probably won't get the potential delays in filling orders that you are subject to on the live platform.

More important are the psychological factors. Ideally, you have to make believe it's your own, real money you are trading and use the same caution you would then. Personally I find that hard to do. Others may be better at it.
Once you trade your own money, you take it very seriously, but I don't need to tell you that.

IG are good; I don't have any complaints. I've also had good experiences at Tradefair, for example.
CS also worth a look. I'm currently demo-ing CMC markets, but I'll save my comments about it for the corresponding thread.


EDIT2: A not unreasonable, and relatively cheap, place to start (apart from some of the better "how to" type threads on T2W, is Malcolm Pryor's "The Financial Spread Betting Handbook". (Looking on amazon, he seems to have produced a few other works since, which I haven't looked at, but the first one is a good basic guide.

 

[fmahmood]

Probably.

I wouldn''t start with crude.
Or gold (like I did ...heh heh...).

EUR/USD isn't such a bad one to start on, but not at £5 or £10 per pip.


EDIT: I would encourage demo-ing, but would add that it can be both good and bad.

It is good because it gives you chance to make classic horrendous mistakes in a safe environment.

Not so good because (depending on provider) the platform may not behave quite in the same way, the charts not quite the same, and for example, you probably won't get the potential delays in filling orders that you are subject to on the live platform.

More important are the psychological factors. Ideally, you have to make believe it's your own, real money you are trading and use the same caution you would then. Personally I find that hard to do. Others may be better at it.
Once you trade your own money, you take it very seriously, but I don't need to tell you that.

IG are good; I don't have any complaints. I've also had good experiences at Tradefair, for example.
CS also worth a look. I'm currently demo-ing CMC markets, but I'll save my comments about it for the corresponding thread.


EDIT2: A not unreasonable, and relatively cheap, place to start (apart from some of the better "how to" type threads on T2W, is Malcolm Pryor's "The Financial Spread Betting Handbook". (Looking on amazon, he seems to have produced a few other works since, which I haven't looked at, but the first one is a good basic guide.

Thanks for the advice.

 

[fmahmood]

Hi Fmahmood,

I used IG index, no complain, good service and they do ring back.
Once I web-traded and pushed the wrong button (sold shares in a micro cap that was having a good run and was trading at a 8% underlying bid-offer spread). I called them within three minutes, the stock was still on their book, they simply cancelled the transaction.

On what type of investor you are, quite frankly, what makes you tick?

Reading the FT and the alphaville blog, downloading companie's trading statements and occasionally listenning to some conf calls?

Following the intricaties of QE2, listenning to Trichet's monthly interest-rates address live on the ECB website and tracking the input cost inflation in the UK?

Scrutinising chart and volume (don't forget the volume - you won't find it on IG Index) looking for some pattern and setting-up a back-tested system that will alert you whenever a winning trade may be made.

In my opinion find first where you interest lies, what excites you. If you are passionate, you are likely to put in the hours that are required (IMO) to make money while lowering the risk you take.

I personnaly enjoy reading transcripts of US companies quaterly conference calls and apply relevant cross-read to UK/European stocks.

I am interested in technical analysis and trading over 2-3days max per trade. Where can I get chart and volume? and how do I setup a backtested system with alerts?

Many thanks for your reply.

 

[hacks]

IG Index offer the backtest feature (ProRealTime/ProBackTest) with their Advanced Charts package, but this costs £30 per month, refunded if you trade at least twice in a calendar month.

 

[alphahunter]

IG Index is a spreadbetting platform - so you won't get market volume, which pretty critical TA trading.
Besides I believe that DMA-CFDs are more suited for short-term trading as you definitively want to avoid the cost of spread. With SB, at best you buy on the market's offer and sell on the market's bid.

 

[diy_]

IG Index is a spreadbetting platform - so you won't get market volume, which pretty critical TA trading.
Besides I believe that DMA-CFDs are more suited for short-term trading as you definitively want to avoid the cost of spread. With SB, at best you buy on the market's offer and sell on the market's bid.

Isnt the cost of the spread on spread betting a lot less than the tax you would pay if you CFD?

 

[alphahunter]

"Isnt the cost of the spread on spread betting a lot less than the tax you would pay if you CFD?"

DIY

It is - although traders who live exclusively from spreadbetting may be in a grey area -.

But Fmahmood has not entirely answered the question. What underlying does he want to trade? And what edge does he think he has?

Spreadbetting on a 1 - 3 day horizon is fine for highly volatile underlying securities/contracts and/or ultra-low spread. As such, front-month gas contract, indices and FX are fine with SB. The key question is what is the daily rolling one, two or three-day standard deviation and how does that compare with the sum (underlying bid-offer spread + commission + skew).

If you go for individual stocks, as I do, I very much doubt that you can make money trading in and out day-in day-out using a spread betting platform because of the taxing (spread + com + skew) that can cost you upfront a good 30bp for minimum for large caps, 50-150bp for mid-caps. You'd better DMA-CFD playing inside the bid and offer (even if you have a directional view) or embrace a longer horizon with SB. It is said that stocks take about 5 to adjust to earnings surprises (which I sum up as being numbers out + the conf call + the on-the-wire brokers notes + couple of days of road-shows and epsilon inertia)

Just an opinion.

 

[funkymusician]

"Isnt the cost of the spread on spread betting a lot less than the tax you would pay if you CFD?"

DIY

It is - although traders who live exclusively from spreadbetting may be in a grey area -.

But Fmahmood has not entirely answered the question. What underlying does he want to trade? And what edge does he think he has?

Spreadbetting on a 1 - 3 day horizon is fine for highly volatile underlying securities/contracts and/or ultra-low spread. As such, front-month gas contract, indices and FX are fine with SB. The key question is what is the daily rolling one, two or three-day standard deviation and how does that compare with the sum (underlying bid-offer spread + commission + skew).

If you go for individual stocks, as I do, I very much doubt that you can make money trading in and out day-in day-out using a spread betting platform because of the taxing (spread + com + skew) that can cost you upfront a good 30bp for minimum for large caps, 50-150bp for mid-caps. You'd better DMA-CFD playing inside the bid and offer (even if you have a directional view) or embrace a longer horizon with SB. It is said that stocks take about 5 to adjust to earnings surprises (which I sum up as being numbers out + the conf call + the on-the-wire brokers notes + couple of days of road-shows and epsilon inertia)

Just an opinion.

You make a very good point here AlphaHunter, however you do say that exclusive spread betters are in the grey about this...Why do you think that is if you believe it to be so?

 

[montmorencyt2w]

You make a very good point here AlphaHunter, however you do say that exclusive spread betters are in the grey about this...Why do you think that is if you believe it to be so?

I believe he may be referring to the possibility that if HMRC believe you are a professional trader, rather than an investor, they may want to tax you, and possibly at income tax rates (+class 4(?) NIC), and not Capital Gains Tax. However, being taxed at all (even if it's CGT not IT), may rob you of the apparent benefits. Very much a grey area though, as far as I can tell. I don't have personal experience (yet) of being collared by HMRC in this respect; I'm just going by what I've read in various places. I'm keeping my eyes peeled though. If you are going to be taxed anyway, then you might as well go DMA, but then you need a sizeable trading pot. (But if you didn't have a sizeable trading pot, perhaps the revenue wouldn't care much about you in the first place, even if you appeared on their radar as a spread-betting "professional trader"...this gets a bit circular, but you see where I'm going, I hope).