My take on spread betting,...

[ULTIMATEONE]

Hey guys,

Started spreadbetting about a week ago, initially made £266 but had a bad day yesterday and lost £200 due to the rapid ftse drop around 1pm. I was unlucky and pulled it out, to my surprise and regret it bounced back up to the level I bought at.

We've got to live and learn, and I've got to take the knock on the head. I was thinking worse case scenario where it would drop another 70 points and my margin would become less - I didn't want it to close loosing say £1200 (if it'd dropped that low).

Whilst there is no way in predicting, being told etc how the market is going to turn I've been trying to look at what the influences are.

What do you guys trade often on, and are sucessfull in? I made that £266 in the FTSE100 in a few days,, however it can fluctuate incredibly quickly - one instant dropping from £-55 to bumping up to £86 in a matter of seconds.

Is it better to go for companies such as Vodafone, Barclays rather than going for the FTSE as a whole (i.e; can I research the company, news etc) more of a focused and accurate prediction?

Also what are peoples thoughts on leaving trades open? I got some advice and was told its completley the wrong thing to do, however at times it looks like it could be the best thing to do.

When I mean open, for example I buy FTSE at 5000, and it drops to 4800 throughout the day and I think after 4:30 pm (close) i'll leave it until the next morning (8am) then it jumps to 5200.

Another question, regarding the example above I thought the FTSE100 only traded between 8am and 4:30pm UK time. Why (for example yesterday) at 6AM was there a huge point increase when the market isn't opened?


Thanks people :cheesy:

 

[Shakone]

The FTSE out of hours is tracking the other main indices on spreadbetting companies. In this case the Dow Jones or S&P. There is correlation between them. If the Dow Jones shoots up after the FTSE closes, the next morning you would expect the FTSE to be opening at 8am much higher. If you wish to give a 24 hour price for the FTSE index, then they obviously have to track the movements of other indices.

I think the rest of your questions all come down to why you are trading. What is the reason for you being in a particular trade. If you know that reason, then you should know whether to hold onto it overnight or not. If you have a reason for being in a trade, you should also have a place to put your STOP. There isn't a one-size fits all answer. Outline your strategy and people can give specific advice.

I recommend you focus on developing a plan for entering and exiting trades. And you spend some time looking at money management and how to limit your losses, and what % of your account you should be risking on each trade.

You can give those details if you wish, and I'm sure people can give you good advice on whether you're risking too much etc.

 

[barjon]

ult

When you spreadbet you're not trading ftse but the sb company's proxy version. During ftse opening hours sb quote will be pretty near the real thing, out of hours their quote reflects what's happening to the dow - as shakeone says - or futures and other markets when dow is closed.

The fierce drop you experienced occured at 1:30pm Friday and followed dow (futures) reaction to the poor US retail trade figures that were announced then - always dangerous to trade across important news. Keep your eye on http://www.forexfactory.com/calendar.php .

cheers

jon

 

[leonarda]

Hey guys,

Started spreadbetting about a week ago, initially made £266 but had a bad day yesterday and lost £200 due to the rapid ftse drop around 1pm. I was unlucky and pulled it out, to my surprise and regret it bounced back up to the level I bought at.

We've got to live and learn, and I've got to take the knock on the head. I was thinking worse case scenario where it would drop another 70 points and my margin would become less - I didn't want it to close loosing say £1200 (if it'd dropped that low).

Whilst there is no way in predicting, being told etc how the market is going to turn I've been trying to look at what the influences are.

What do you guys trade often on, and are sucessfull in? I made that £266 in the FTSE100 in a few days,, however it can fluctuate incredibly quickly - one instant dropping from £-55 to bumping up to £86 in a matter of seconds.

Is it better to go for companies such as Vodafone, Barclays rather than going for the FTSE as a whole (i.e; can I research the company, news etc) more of a focused and accurate prediction?

Also what are peoples thoughts on leaving trades open? I got some advice and was told its completley the wrong thing to do, however at times it looks like it could be the best thing to do.

When I mean open, for example I buy FTSE at 5000, and it drops to 4800 throughout the day and I think after 4:30 pm (close) i'll leave it until the next morning (8am) then it jumps to 5200.

Another question, regarding the example above I thought the FTSE100 only traded between 8am and 4:30pm UK time. Why (for example yesterday) at 6AM was there a huge point increase when the market isn't opened?


Thanks people :cheesy:

I think you've discovered how volatile and unpredictable this is... and luckily didn't lose any money this time. However, think about it you could easily have lost £500...?

There's always that temptation to think you can jump straight into this game and make 1000% per year...! However, you'll learn over time (1-2 years), to be consistently profitable you will be looking at a lot less, say 30% per year if you're lucky. Unless you master day trading and are exceptionally talented where you can make more, but it's highly risky.

Me personally, i'm learning medium term trading that suits me, and if I can make 40% this year I will be extatic !

 

[kimo'sabby]

Hey guys,

Started spreadbetting about a week ago, initially made £266 but had a bad day yesterday and lost £200 due to the rapid ftse drop around 1pm. I was unlucky and pulled it out, to my surprise and regret it bounced back up to the level I bought at.

We've got to live and learn, and I've got to take the knock on the head. I was thinking worse case scenario where it would drop another 70 points and my margin would become less - I didn't want it to close loosing say £1200 (if it'd dropped that low).

Whilst there is no way in predicting, being told etc how the market is going to turn I've been trying to look at what the influences are.

What do you guys trade often on, and are sucessfull in? I made that £266 in the FTSE100 in a few days,, however it can fluctuate incredibly quickly - one instant dropping from £-55 to bumping up to £86 in a matter of seconds.

Is it better to go for companies such as Vodafone, Barclays rather than going for the FTSE as a whole (i.e; can I research the company, news etc) more of a focused and accurate prediction?

Also what are peoples thoughts on leaving trades open? I got some advice and was told its completley the wrong thing to do, however at times it looks like it could be the best thing to do.

When I mean open, for example I buy FTSE at 5000, and it drops to 4800 throughout the day and I think after 4:30 pm (close) i'll leave it until the next morning (8am) then it jumps to 5200.

Another question, regarding the example above I thought the FTSE100 only traded between 8am and 4:30pm UK time. Why (for example yesterday) at 6AM was there a huge point increase when the market isn't opened?


Thanks people :cheesy:

Hey listen, you've experienced the good and bad of a leveraged derivative type product.

Will the product beat you and your returns down to no better than an etf, or can you become a better trader?

Nobody can help you, unfortunately it's all down to you.



Hope this helps.



Kim.

 

[Bollo57]

Hi everyone,
just joined today. This is my first post.
Some fascinating threads and postings, particularly from the more experienced traders. You are all very welcoming to us newbies.
OKay, a quick resume: been SB for about 7 years, mixed success, as is the norm, maybe starting to get somewhere (hopefully!), deciding to start trading as more of an income provider, than my day job.
My understand of SB companies: (I've used primarily one for the last 7 years, signed up with another to try them out).
I posted this on another thread about 'myths about spreadbetting', but it hasn't been posted for a while, so I may not get an answer. It's about the theories that SB companies, are, perhaps not playing on a level field.

'Closing winning clients accounts':

They obviously derive income from: losing trades, the spread they charge, and hedging the positions. Now, if they only had losing clients, they probably couldn't survive in the long term, or even the middle term. The amount they must need to invest to get up and running must be huge. So, imho, I guess they must like to have a substantial portfolio of winning clients (for reasons already posted previously in other threads). Again, they make money off winning clients, and winning clients will probably keep trading, adding to their spread and hedging derived income. So if they cut off winning clients, they are, in effect, cutting off a revenue stream. Is this reasonable, too simplistic/naive? Please educate me.

I do have a question for all (probably some of the more experienced traders): some of the posts mention that its possible for accounts to get flagged up for large/consistent trades. I have no doubt this happens, as too many people in various threads mention this. What is your collective definition of a 'large' trade? £20 a point, £50, £100? I really have no idea what is considered large - I have been doing this on my own outside of this community. I would consider excess of £50, but everything is relative.
I appreciate your comments to my first ever post, and I thank you in advance.
Kind regards.

BTW - Ultimateone - I remember my first trades on the Dow - my first ever trade! I'd 'studied', had my 'system', then traded. Got stopped out, lost £500 in minutes, traded again, lost another £200. Considered packing in there and then, took stock, licked my wounds, tried to analyze everything that went wrong. Changed, adapted, realise its hard, but to succeed with everything, there's a learning curve, no shortcuts, it's hard, but with effort, you get better, learn, and hopefully succeed. I still shudder when I think of that first trade. In hindsight, it may me study, and not think the market is easy.
Best of luck. There's no substitute for hard work.

 

[Jack Hughes]

BTW - Ultimateone - I remember my first trades on the Dow - my first ever trade! I'd 'studied', had my 'system', then traded. Got stopped out, lost £500 in minutes, traded again, lost another £200. Considered packing in there and then, took stock, licked my wounds, tried to analyze everything that went wrong. Changed, adapted, realise its hard, but to succeed with everything, there's a learning curve, no shortcuts, it's hard, but with effort, you get better, learn, and hopefully succeed. I still shudder when I think of that first trade. In hindsight, it may me study, and not think the market is easy.
Best of luck. There's no substitute for hard work.

Shudder? I still break out into a cold sweat when I think of my early dabbles with SB back in 2001/2. Quite apart from whether I knew what I was doing (which I didn't), in those days it was all dial-up internet that dropped out every few minutes, primitive platforms and huge spreads.

I think the Dow was 8pt then. It often happened that you'd place a bet, the platform would crash or seize up, then it would take 20m to log back on, during which time anything could have happened.

Spread betting still has its problems, but generally we've never had it so good.

 

[Bollo57]

Yeah Jack, I remember. Actually,those trades were telephone ones! Little did I realise how quick they moved! Unbelievable to now think we traded that way, compared to now trading even on your iPhone/ Blackberry etc.
I agree. Things have changed so much for the punter at home. But here's the question - have the markets changed? They still go up, still go down, (not necessarily in that order!)

On paper, it looks easy doesn't it. I remember when I first suggested to my wife what I was proposing to do. I said "honey, I've studied. We're gonna make some real money here". Her reply was, well, if it's that easy, why isn't everyone doing it? How right she was!

Happy and successful trading.

 

[ULTIMATEONE]

Hey guys

sorry been busy last few days haven't had time to respond.

Havent done any betting since, but might have a go 2morrow - although to be honest I find it a complete gamble with 0 possibility of even gaining a slight intelligence about how the market could potentially go.

To be honest, I have guessed and luckily still up on a profit but I can't see people being sucessful by guessing wheter it goes up or down.

I am going to tone it down a bit, at 50p per point, so the losses are much less (if any) although unfortunatley the winnings won't be as good - but a good way to learn I suppose!

Anyone got any tips in general? Its not really a post that I want to get rich quick - we all do if everyones honest but I've realised its not a get rich method therefore willing to learn how to make a consistent profit gradually.

thanks guys

edit:

hey guys

been doing a bit of reading on graph analysis. what do you guys find works better reviewing each 15 minutes or 1 hour intervals? I find it hard to anaylse base on the fact that its very hard to predict if a graph is at its peak or fall.

Also another question, i'm quite confused about this and going in circles with it in my head!

Ftse 100 trades from 8AM to 4:30PM in UK time correct?
I've seen graphs for the FTSE run 24/hours.

Now I understand there is the US trading @ 2:30 - 9 PM (UK Time) but what about the remainder of the time?

If I were to place a bid to go LONG, say at 3PM UK time @ 5000, and after the UK market closed it went from 4950 and rallied to 5030 then down to 5000 at 4AM, then about 7AM it rallied to 5300 could I sell it there? OR do I need to wait until the UK starts trading again to be able to sell and get the profits? (based on that example)

 

[Black Swan]

Hey guys

sorry been busy last few days haven't had time to respond.

Havent done any betting since, but might have a go 2morrow - although to be honest I find it a complete gamble with 0 possibility of even gaining a slight intelligence about how the market could potentially go.

To be honest, I have guessed and luckily still up on a profit but I can't see people being sucessful by guessing wheter it goes up or down.

I am going to tone it down a bit, at 50p per point, so the losses are much less (if any) although unfortunatley the winnings won't be as good - but a good way to learn I suppose!

Anyone got any tips in general? Its not really a post that I want to get rich quick - we all do if everyones honest but I've realised its not a get rich method therefore willing to learn how to make a consistent profit gradually.

thanks guys

seeing as you've been so polite...here's a few simple ideas to get you up and running, bit raw but better than tossing a coin; trade one currency pair, try EUR/USD, cheap spread on most SB firms' platforms, should be 2 pips. Trade off a 15 min TF, throw up an MACD indicator (do not alter the standard settings), buy/sell when it crosses, use a stop of 30-35 pips, use your descretion to take profits and to close trades early if they've gone bad before your stop is breached, see how you get on with that and come back to us in a couple of weeks with an update..

 

[N Rothschild]

Hey guys,

Started spreadbetting about a week ago, initially made £266 but had a bad day yesterday and lost £200 due to the rapid ftse drop around 1pm. I was unlucky and pulled it out, to my surprise and regret it bounced back up to the level I bought at.

We've got to live and learn, and I've got to take the knock on the head. I was thinking worse case scenario where it would drop another 70 points and my margin would become less - I didn't want it to close loosing say £1200 (if it'd dropped that low).

Whilst there is no way in predicting, being told etc how the market is going to turn I've been trying to look at what the influences are.

What do you guys trade often on, and are sucessfull in? I made that £266 in the FTSE100 in a few days,, however it can fluctuate incredibly quickly - one instant dropping from £-55 to bumping up to £86 in a matter of seconds.

Is it better to go for companies such as Vodafone, Barclays rather than going for the FTSE as a whole (i.e; can I research the company, news etc) more of a focused and accurate prediction?

Also what are peoples thoughts on leaving trades open? I got some advice and was told its completley the wrong thing to do, however at times it looks like it could be the best thing to do.

When I mean open, for example I buy FTSE at 5000, and it drops to 4800 throughout the day and I think after 4:30 pm (close) i'll leave it until the next morning (8am) then it jumps to 5200.

Another question, regarding the example above I thought the FTSE100 only traded between 8am and 4:30pm UK time. Why (for example yesterday) at 6AM was there a huge point increase when the market isn't opened?


Thanks people :cheesy:

Having read this, i can assure you, you will lose ALL your money from the language and mindset you have presented

 

[ULTIMATEONE]

seeing as you've been so polite...here's a few simple ideas to get you up and running, bit raw but better than tossing a coin; trade one currency pair, try EUR/USD, cheap spread on most SB firms' platforms, should be 2 pips. Trade off a 15 min TF, throw up an MACD indicator (do not alter the standard settings), buy/sell when it crosses, use a stop of 30-35 pips, use your descretion to take profits and to close trades early if they've gone bad before your stop is breached, see how you get on with that and come back to us in a couple of weeks with an update..

Thank you Black Swan for your reply, I've been coming acros the MACD indicator quite a bit however I'm having trouble finding a software that allows me to use it? The company I deal with at the moment doesn't have the ability to select MACD view - sorry I don't know if that sounds like a stupid question but i'd appriciate a pointer as to how I go about obtaining the MACD indicator.


@N Rothschild:
Thanks for the reply, my mindset may not be correct but I'm here to learn right? Is there any chance you could elaborate (not taking the pee) about how I could go about altering my mind set? what you would suggest etc

Replies much appriciated people.

 

[ULTIMATEONE]

edit:
just found out how to do the MACD - so no worries about that

If anyone could reply to my other questions that would be very much appriciated.

thank you so far for your help on this thread

 

[leonarda]

Hey guys

sorry been busy last few days haven't had time to respond.

Havent done any betting since, but might have a go 2morrow - although to be honest I find it a complete gamble with 0 possibility of even gaining a slight intelligence about how the market could potentially go.

To be honest, I have guessed and luckily still up on a profit but I can't see people being sucessful by guessing wheter it goes up or down.

I am going to tone it down a bit, at 50p per point, so the losses are much less (if any) although unfortunatley the winnings won't be as good - but a good way to learn I suppose!

Anyone got any tips in general? Its not really a post that I want to get rich quick - we all do if everyones honest but I've realised its not a get rich method therefore willing to learn how to make a consistent profit gradually.

thanks guys

edit:

hey guys

been doing a bit of reading on graph analysis. what do you guys find works better reviewing each 15 minutes or 1 hour intervals? I find it hard to anaylse base on the fact that its very hard to predict if a graph is at its peak or fall.

Also another question, i'm quite confused about this and going in circles with it in my head!

Ftse 100 trades from 8AM to 4:30PM in UK time correct?
I've seen graphs for the FTSE run 24/hours.

Now I understand there is the US trading @ 2:30 - 9 PM (UK Time) but what about the remainder of the time?

If I were to place a bid to go LONG, say at 3PM UK time @ 5000, and after the UK market closed it went from 4950 and rallied to 5030 then down to 5000 at 4AM, then about 7AM it rallied to 5300 could I sell it there? OR do I need to wait until the UK starts trading again to be able to sell and get the profits? (based on that example)

try longer time frames... (days to weeks), day trading on 15min/1hour time frames is not for rookies I am afraid. Try it and see... Take a punt 50p/point on a good stock rising from support or in trend or whatever looks good... with a decent stop loss... and see what happens...

 

[Splitlink]

Thank you Black Swan for your reply, I've been coming acros the MACD indicator quite a bit however I'm having trouble finding a software that allows me to use it? The company I deal with at the moment doesn't have the ability to select MACD view - sorry I don't know if that sounds like a stupid question but i'd appriciate a pointer as to how I go about obtaining the MACD indicator.


@N Rothschild:
Thanks for the reply, my mindset may not be correct but I'm here to learn right? Is there any chance you could elaborate (not taking the pee) about how I could go about altering my mind set? what you would suggest etc

Replies much appriciated people.

If you like spreadbetting, Finspreads do charts with MACD. If you open an account with them they offer 100 pounds to trade with. I have no interest in this company except as a client and I cannot compare them with other firms, but I get along with them

 

[montmorencyt2w]

Tradefair (and other LCG white labels) offer 1 pip on EUR/USD.
I agree it's a reasonable one to concentrate on.

TF also have an opening bonus, subject to conditions.

Have you considered demo trading? I wouldn't do it for too long, but it's worth doing if you never have, and have little other experience.

 

[diy_]

edit:
just found out how to do the MACD - so no worries about that

If anyone could reply to my other questions that would be very much appriciated.

thank you so far for your help on this thread

I found a book that has most of the qustions that you are asking, I was pondering a lot of questions but find it a bit silly asking till I came on this site and found others asking the same questions. the book is called "The Financial Spread betting handbook" by Malcolm Pryor. Best £20 I spent. read it a couple of times then try again. I started more or less the same way as you, start off with £250 in my account, took it up to £700 in 2 weeks then the stuff hits the fan (well I've never heard about non agricultural farm labour reports before then) Now I am researching charts, indicators and trying to learn some diciplines
Dan

 

[ULTIMATEONE]

thanks diy (aka Dan) will have a look at it

Currently looking at divergence on the MACD, however finding it hard to plot - most commonly even when there is a sharp drop i'm finding it very hard to spot and the MACD divergence is minimal compared to the price - not as 'dramatic' as the videos I've been watching show.

Is there any particular time spacing that is wise to use? Any tips from anyone - perhaps an example if anyone could be kind enough? Lots of videos are are recorded at a very low resolution therefore I find it hard to see anything clearly.

Thanks once again

 

[Black Swan]

try longer time frames... (days to weeks), day trading on 15min/1hour time frames is not for rookies I am afraid. Try it and see... Take a punt 50p/point on a good stock rising from support or in trend or whatever looks good... with a decent stop loss... and see what happens...

au contraire mon ami..if he trades off dailys/weeklys on, for example, cable he'll need a big fook off stop, chances are it'll get hit a few times (2-3 in a row) before he gets the hang of it/knows what he's doing...There's a method in my madness (for new traders) beyond the obvious...

 

[diy_]

thanks diy (aka Dan) will have a look at it

Currently looking at divergence on the MACD, however finding it hard to plot - most commonly even when there is a sharp drop i'm finding it very hard to spot and the MACD divergence is minimal compared to the price - not as 'dramatic' as the videos I've been watching show.

Is there any particular time spacing that is wise to use? Any tips from anyone - perhaps an example if anyone could be kind enough? Lots of videos are are recorded at a very low resolution therefore I find it hard to see anything clearly.

Thanks once again

Its worth getting a demo account with igindex (I assume I can recommend them since they are advertised at the top of the page) the free chart on there has most of the popular indicators and ocillators. If you have a live account with them you can use their advance charts. As regard to divergence after a while you can spot them on the chart but by then the horse has bolted. Most of the experts has recommend using 15 minutes upward for beginners and I can see why. I use to have mine set for 5-15 minutes, see a lot of opening and closing and been a fool I'm I go for them I now set my charts to 30 minutes and is doing paper trading for 1-3 days till I save up some money.