Hallo,
I am new to this forum, which I expect to follow regularly. My name is Fabrizio and I am from Rome, Italy.
My personal relation with stocks dates back to 2000 and is mainly a buy-and-hold story. The bulk of my stocks are kept according to a buy-and-hold or to a "fundamental" logic.
I also have some small experience in day-trading, starting from end of 2006: some day-trading with shares, some swing trading with shares, options and covered warrants, but not in a continuous way.
Recent volatility made me begin again day-trading and also look around for different instruments.
I am getting more and more interested in "spread-betting" with a UK firm. I have searched the internet about the firms which might better serve my needs and I think I will go with gftuk.com, with odlmarkets.co.uk as a possible alternative (or a backup shop). I would mainly trade stock indices, making from 0 to 2 or 3 round trips per working day.
What attracts me in spread-betting with indices is mainly the tight spread. I would often or always close my positions during the day.
And now here is my first question in this forum.
A new possibility offered by spread-betting firms is the guaranteed stop-loss, also known as controlled risk order. I have never seen this while trading with shares, options or covered warrants (obviously it is realisable with "strategies" with options and futures, but I have always kept it simple).
With some spread-betting firm for a cost of a couple of points (or even free of charge with the beginner account @ ODL), it is possible to put a stop-loss order at a certain minimum distance (not really huge: 0,6% circa with ODL, 1,1% circa with GFT) and be guaranteed the closure of the position at the stop-loss price, whichever the gap the market makes.
And that also overnight, if I understand well.
Question: this sounds too good to be true, there must be something I miss. With GFT I can move my stop-loss any time (I have downloaded their demo platform, quite interesting, very well done actually).
So let's say I want to hold a swing trading position with a time horizon of a few weeks.
Before market closing, I would put, or move, my guaranteed stop-loss near the current price, and be guaranteed from negative gaps at tomorrow openings.
By repeating this every day, I would profit entirely from "positive gaps" but be partially protected from "negative gaps". In the long run (especially if the underlying tends to "gap" frequently) isn't this obviously advantageous for me?
Please explain what I miss.
Cheers
Fabrizio
I am new to this forum, which I expect to follow regularly. My name is Fabrizio and I am from Rome, Italy.
My personal relation with stocks dates back to 2000 and is mainly a buy-and-hold story. The bulk of my stocks are kept according to a buy-and-hold or to a "fundamental" logic.
I also have some small experience in day-trading, starting from end of 2006: some day-trading with shares, some swing trading with shares, options and covered warrants, but not in a continuous way.
Recent volatility made me begin again day-trading and also look around for different instruments.
I am getting more and more interested in "spread-betting" with a UK firm. I have searched the internet about the firms which might better serve my needs and I think I will go with gftuk.com, with odlmarkets.co.uk as a possible alternative (or a backup shop). I would mainly trade stock indices, making from 0 to 2 or 3 round trips per working day.
What attracts me in spread-betting with indices is mainly the tight spread. I would often or always close my positions during the day.
And now here is my first question in this forum.
A new possibility offered by spread-betting firms is the guaranteed stop-loss, also known as controlled risk order. I have never seen this while trading with shares, options or covered warrants (obviously it is realisable with "strategies" with options and futures, but I have always kept it simple).
With some spread-betting firm for a cost of a couple of points (or even free of charge with the beginner account @ ODL), it is possible to put a stop-loss order at a certain minimum distance (not really huge: 0,6% circa with ODL, 1,1% circa with GFT) and be guaranteed the closure of the position at the stop-loss price, whichever the gap the market makes.
And that also overnight, if I understand well.
Question: this sounds too good to be true, there must be something I miss. With GFT I can move my stop-loss any time (I have downloaded their demo platform, quite interesting, very well done actually).
So let's say I want to hold a swing trading position with a time horizon of a few weeks.
Before market closing, I would put, or move, my guaranteed stop-loss near the current price, and be guaranteed from negative gaps at tomorrow openings.
By repeating this every day, I would profit entirely from "positive gaps" but be partially protected from "negative gaps". In the long run (especially if the underlying tends to "gap" frequently) isn't this obviously advantageous for me?
Please explain what I miss.
Cheers
Fabrizio
