Online Trading

[DESKPRO]

I am thinking of spread betting on the Dow. I am uanable to keep an eye on the bets all the time and hence am looking for an online site that will ideally allow me the following:

- tight stop losses (10 pints, Tradindex, D4F think both have minimum of 30)
- ability to set limit orders to open a bet (Fin spreads dont allow this but Tradindex does)
- ability to place cancel orders ie if have a stop loss set and a limit on an open bet once one of these is triggered the other is automatically clos(D4F does this but Tradindex doesn't)
- ideally ability to have trailing stop lossses (haven'y come across any that does this, maybe this will be a further enhancement).

I have been trading using virtual money and feel to be successful will need most of the above. Is their a site that fulfills these requirements?

 

[catsdad100]

If you try to do the Dow using a 10 point stoploss you are very likely to find yourself stopped out nearly every time you trade, resulting in consistent losses. The fluctuations on the Dow as worked by the SB firms are such that using any less than a 30 point stoploss, you would be safer not trading it !!

 

[DESKPRO]

My thinking was to enter only at hopefully "breakaway" points. if
this fails then to cut the losses straightaway. I am new to this but from what I have read the idea is to cut your losses asap. While virtual trading on Tradindex I have found that even with the 30 points I get stopped many times (as expected) but the gains are only around 50 point when the breakaway occurs. ie if I am getting stopped at 30 most times and gains are around 50 then I need to reduce the stop loss trigger?

 

[Dr Mike]

Hi DeskPro
I can only echo catsdads post. It's quite common on the Dow to have a number of false breakouts before the real ones take place, and any stoploss less than 30 will be a waste of time.

The spreadbet prices are based on the futures and therefore exaggerate the movements at key points, such as breakouts.

The DOW is currently also rather subdued compared with a few weeks ago - daily ranges are smaller and breakouts are more often retraced.

 

[DESKPRO]

Hi Thanks for both your inputs. I will carry on using the virtual account with 30 stops and see what happens over the next few weeks. Any thoughts on the other items on my wish list for online dealing in my original post and if a web site ful meets these?

 

[ChartMan]

search this site for discussions on bias!!! That alone can devour at least 20 points for a single point move in the dow. So take at least a 30 point stop. Playing the breakouts CAN be safe with minimum risk. Study my dow charts from the archives and take on board all about the 100MA and how it is used to confirm "safe" entries. It takes a lot of patience though!

 

[mmillar]

deskpro

sounds like an advert for d4f but...

d4f don't have a minimum stop of 30 points - it is 6 points aways from the market bid/offer. but as the others have said trading a 10 point stop on the Dow is very risky. epecially as you are starting with minimum spread of 5 points - that gives you 5 points leeway!

d4f have limit and stop orders to open and close bets

d4f have One Cancels Other (OCO) orders

don't know anyone except IB who does trailing stops. i've asked d4f to include trailing stops but don't know the status of this.

there is no such thing as spreadbet bias, but futures do move more rapidly and with more volatility then the 'real' index. it is very easy to get caught by the futures price pushing through a support/resistance level and your order getting triggered, only to find out the 'real' index didn't go through that level, but bounced off it

to be honest, if you can't watch the market then you shouldn't be day trading - and trying to play breakouts on the Dow with a 10 point stop is day trading. look for an overnight system.

 

[DESKPRO]

mmillar

I can sometimes watch the bets but not all the time hence looking for opening limits and OCO's. Do you know whether its possible to virtual trade with D4F like it is with Tradindex. See the minimum deposit is £1000 to open an account unlike with Tradindex where you can open up one with say £200 which is ideal for a begineer.

Is there anywhere I can read up on overnight systems instead of intra-day ones?

 

[mmillar]

hi,

Don't know about Tradindex except what I read off their website. You say you can open an account with £200 but you certainly wouldn't be able to trade the Dow with this amount.

There is a thing called Notional Trading Requirement (NTR) or Margin. With D4F the Dow Cash has an NTR of 240 (and I have usually found D4F's NTR/Margin is the same or better than other SB companies). This means to trade the Dow Cash at £1 per point you need a minimum of £240 in your account, PLUS any potential loses. So, in reality, you need a minimum of £500-£1000 in your account just to trade at £1 per point. You should also learn about Money Management (which I'm not going to go into - see FTSE Beater's Basics of Trading post - http://www.trade2win.co.uk/boards/showthread.php?s=&threadid=4629) which says you shouldn't risk more than 1% of your capital in any one trade. Trading at £1 per point with a 10 point stop on a £200 account certainly contravenes this.

There are lots of 'systems' posted all over this board, though I think a new thread on 'systems' would be a good idea.

Oh, and no D4F don't have a 'practice' system (though, as usual, you can always phone them and put it in as a suggestion). But there are lots of these paper trade systems around. I'm sure someone else with more knowledge of these would be happy to post some info.

cheers

 

[neil]

Spread Bet simulator

City Index has just brought out a trading simulator for Spread betting and CFD virgins at :

http://www.cityindex.co.uk

 

[genti]

mate, you better open a acc with deal4free

 

[Trader333]

IB is not a spreadbetting company but an electronic brokerage. Also you cannot vary your amount per point traded as with a SB firm other than by increasing the number of contracts you trade.

For the Dow future (they do not offer index trading), the value per point is $5 or around £3 per point depending on exchange rates. You would also need a minimum of £1450 to open an account.


Paul

 

[DESKPRO]

With TradIndex the margin required for £1 on the Dow Daily is £65. If I am going to be wiped out I rather be £200-£500 than £1000. I also gather that Finspreads allow 50p as minumum after 8wks so may consider that during the initial stages. I know I will make mistakes but hopefully will learn from them.

 

[ChartMan]

Learn at 50p a point! cheaper than £10 a point. You'll lose plenty as you learn.

 

[mmillar]

hi again deskpro,

Just looked more closely at Tradindex. You're right - the margin requirement on the Dow is 65 !! Incredible. Much less then any other SB company, though this isn't necessarily a good thing - makes you take much higher risks. Also says their minimum stop is 30 points and their spread is 8 points.

Maybe someone could start a thread on Tradindex as they are new and haven't heard anything about them yet.

 

[DESKPRO]

Hi MMILLAR

I have looked at quite a few of these online SB sites and Tradindex is probably my favourite. It doesn't have all the features I would like hence the reason for posting the original message.

Things I do like are the chart, as it seems upto date not delayed by 15 minutes like some (but it has no tools eg stochastic etc) and it forces you to have a stop loss before you place a bet which I think is a good thing. Also the virtual account is excellent and exactly like if you had the real account.The other thing is that it prices are different from Fin Spreads and City Index , dont know whether the daily price is the exact price of the index as it doesn't seem to update as often as the others. May be wrong on this point as was not aware of spread bias was till I started reading these boards. I have also found the telephone support to be very good.

Things that I dont like are that it doesn't allow OCO orders hence if you have a limit order on an open bet and you get stopped on it ,the limit order can be triggered later in the day. This happened to me a few times but I was only virtual trading. Also the minimum is a pound unlike 50p on Fin Spreads.