Scalping the FTSE

[nick_uk]

Hi guys, first post here.

Basically, I've been getting rather interested in scalping the FTSE 100. (At least I believe that's what it's called) I've got a spreadbetting account with IG and iii.co.uk and doing some 50p trades on the latter. I've lost one bet where I forgot I was using my new mouse and that the buttons are bigger and accidently closed a loser . Apart from that, I haven't had a single loser, and the same with paper trading. Now I don't seriously believe for a minute that'll remain the case for much longer, just been very lucky, but I find it rather boring.

Which brings me onto plan B. Create a bot that does it automatically according to my rules. Only problem is, interfacing with the SB company. IG index isn't too tricky, it's the flash based ones that'd need a screenscraper etc.

Has anyone overcome this before, or does anyone have a recommendation of a broker that has an API I can use and tight spreads etc.

 

[Paulie_5]

Hi Nick,

I know absolutely nothing about creating a bot so I can't help you there.

But one thing I can help with is scalping and spreadbetting. They simply don't mix.

If you want to scalp in the truest sense, you should trade direct market.

I honestly don't think there will be one person on the forum who either makes money scalping using a spreadbetting account, or disagrees when I say you'd be better off trading Direct Market Access.

Hope this helps,

Good luck.

 

[nick_uk]

Thank you for responding

I don't need help in creating the bot as such, my problem is more this:

I've been reading about DMA, and agree it's the best way to go due to tighter spreads, probably better fulfillment etc, but then thought what do you actually buy and sell for the FTSE 100? Is there a broker you'd recommend for this?

 

[pboyles]

You buy and sell a futures contract, sounds more complicated than it really is. If you think it will go up you buy a contract, if you think its going down you sell a contract. You will probably need about $500 to trade one contract with a proper broker. Look at the Global Futures website, they have a live chat feature and you can ask them about commissions etc. Remember you wont be paying them a spread and they wont mess about with slippage like a SB provider will. Paulie is right, forget about scalping and spreadbetting, in my opinion forget about spreadbetting at all, waste of time.

 

[pboyles]

Ask Global for a demo account of their GSTrainer platform, that has free charting with live data, you can get the FTSE on it. They have something called Strategy Runner which is designed for automated trading, dont know much more about it as I trade manually.

 

[Paulie_5]

From your first post (you mention only one loss so far), I'd recommend that rather than thinking about jumping straight in and finding a DMA broker, you keep watching the markets, learning, reading books, reading forums. Demo, backtest. Demo again.

It's a looooong long process to become successful as a trader.

And sorry to say this, but if you find the process boring already (and therefore looking for excitement) you are unlikely to succeed.

Good luck

 

[nick_uk]

I'm a programmer at heart, I like to analyse things, program etc. I've been watching the markets for a couple of years, doing the paper trading on and off, and want to make software, bots etc and do it that way, as it's what I enjoy.

 

[pboyles]

I'm a programmer at heart, I like to analyse things, program etc. I've been watching the markets for a couple of years, doing the paper trading on and off, and want to make software, bots etc and do it that way, as it's what I enjoy.

You might want to look at tradestation, its a bit expensive but you can program pretty much anything and run backtests. I think Strategy Runner will be more limited but you can get a free demo, if programming is what interests you then you can write a trading system in SR and publish it, people might even pay you to trade it if its profitable.

 

[GeofT]

It sounds like people are thinking of scalping as high-frequency trading, i.e. in and out of a trade in a couple of seconds or less. I doubt there's many retail traders using algorithms to analyse tick charts. I think most people take scalping to mean any short term trade under a few minutes, and there's no reason you can't do this with a Metatrader broker or a SB company for 5 - 10 pips at a time.

My advice would be to look into coding an Expert Advisor for Metatrader, or asking someone to do it for you.

 

[Alexander Fleming]

Is anyone still trading the Ftse? It seems to be moving well over the past year and have been trading it on and off for the past 3 years.

Looking for anyone trading it to share info etc

Happy to make £100 per day but always feel I am risking more than this to make it

 

[Hithere]

HFT software for scalping the FTSE

Hi there,

take a look at ftse100pro trading software if you're looking for the sort of HFT software that Joe blogs never normally has access to.

 

[gtspeed]

Cfd

Hi Nick,

I know absolutely nothing about creating a bot so I can't help you there.

But one thing I can help with is scalping and spreadbetting. They simply don't mix.

If you want to scalp in the truest sense, you should trade direct market.

I honestly don't think there will be one person on the forum who either makes money scalping using a spreadbetting account, or disagrees when I say you'd be better off trading Direct Market Access.

Hope this helps,

Good luck.

Hi

Good point , so I take you mean CFD with IG accounts as that has DMA ?

 

[timsk]

Good point , so I take you mean CFD with IG accounts as that has DMA ?

Hi Gary,
As Paulie_5 hasn't been on the forum for six years and his post is almost 7 years old - it's reasonable to assume you're not going to get a reply from him. So, you'll have to make do with me!

Primarily, IG is a spread betting broker who, like most other SB firms, offers CFD's. This means that IG are market makers, i.e. they are taking the other side of your trades. Direct Market Access refers to traders who trade with other traders and the broker merely broker's the transaction. The trader then pays the broker a commission for their services.

What Paulie_5 is saying is that - in his opinion - it's not possible to make money utilising a scalping strategy with a SB broker. In other words, if you're a scalper, you'll need to use a bespoke futures broker (e.g. Infinity Futures) to trade futures markets such as equity indices and commodities etc. Similarly, if you want to trade equities, you'll need a bespoke equities broker. A few brokers offer the lot, the best known and most widely used being Interactive Brokers (IB). So, IB are a DMA broker who will offer the true market price and spread. By contrast, IG will offer a price derived from the underlying instrument that is similar to that provided by IB, but not identical. And the spread will be a tad wider - as that's (primarily) how they make their money. This doesn't matter greatly to position traders, swing traders or, even, to some intraday who hold their trades for many minutes to hours, but it matters hugely to scalpers who will typically only hold trades for a few minutes and sometimes a lot less than that.

The other reason that SB is not really suitable for scalping is that many (but not all) SB firms don't like it and outline in their T&Cs how they define scalping and what they'll do if they think you're practicing it. But that's another story . . .

Hope that helps.
Tim.

 

[gtspeed]

Hi Gary,
As Paulie_5 hasn't been on the forum for six years and his post is almost 7 years old - it's reasonable to assume you're not going to get a reply from him. So, you'll have to make do with me!

Primarily, IG is a spread betting broker who, like most other SB firms, offers CFD's. This means that IG are market makers, i.e. they are taking the other side of your trades. Direct Market Access refers to traders who trade with other traders and the broker merely broker's the transaction. The trader then pays the broker a commission for their services.

What Paulie_5 is saying is that - in his opinion - it's not possible to make money utilising a scalping strategy with a SB broker. In other words, if you're a scalper, you'll need to use a bespoke futures broker (e.g. Infinity Futures) to trade futures markets such as equity indices, commodities and oil etc. Similarly, if you want to trade equities, you'll need a bespoke equities broker. A few brokers offer the lot, the best known and most widely used being Interactive Brokers (IB). So, IB are a DMA broker who will offer the true market price and spread. By contrast, IG will offer a price derived from the underlying instrument that is similar to that provided by IB, but not identical. And the spread will be a tad wider - as that's (primarily) how they make their money. This doesn't matter greatly to position traders, swing traders or, some intraday who hold their trades for many minutes to hours, but it matters hugely to scalpers who will typically only hold trades for a few minutes and sometimes a lot less than that.

The other reason that SB is not really suitable for scalping is that many (but not all) SB firms don't like it and outline in their T&Cs how they define scalping and what they'll do if they think you're practicing it. But that's another story . . .

Hope that helps.
Tim.

Many thanks , I was sure that IG were neutral brokers similar to Intertrader as was watching an interview with Steve Ruffley and that brokers like this don't move the markets against the customer

 

[timsk]

Many thanks , I was sure that IG were neutral brokers similar to Intertrader as was watching an interview with Steve Ruffley and that brokers like this don't move the markets against the customer

Hi Gary,
InterTrader are another spread betting broker like IG - so everything I said above applies to them. The same goes for all the other SB firms commonly discussed here on T2W: CMC, Finspreads, Capital Spreads and ETX Capital - to name but a few.

I'm not sure what you mean by 'neutral brokers'? Be that as it may, you're correct in saying SB firms don't move the market against the customer - at least not in the wider sense they don't. However, you need to understand that when you trade with them - it is the SB firms themselves who are on the other side of your trade. In that respect they are the market and, in theory at least, they can move it anywhere they like. In practice, this doesn't happen and their products mirror pretty closely the underlying market (e.g. the FTSE 100).
Tim.