So basically spread betting is a con?

[Hoggums]

Why do you think it going to be manual? Some of the companies have 100 threshould (per bet).

I am talking about 3-4 pt per trade. I am good at exactly it. When I try to apply wisdom of books and all that patterns and stuff - everything is going south very quick.

That doesn't matter - getting 3-4 pnts is effectively scalping, and SBs don't like that because they can't/don't have time to hedge against you. So if you consistently make money that way they will slow you down with dealer confirm to allow them time to hedge your trade.

To get 3-4 pips profit - where are your stops?

 

[maxima]

To get 3-4 pips profit - where are your stops?

14pt

What platform/product/provider/country/planet I can trade this way without constantly watching my back? In your opinion....

P.S. I ultimately dont exploit anything nor I do anything maliciously. I wouldnt agree that it is fair to get slowed down if you are following rules of the game. But I dont want to fight against windmills.

 

[Hoggums]

14pt

I think you need to thoroughly test your strat before trading with money. I think trading a system with a profit factor less than 0.25 is going to lead to ruin. You need to have an 80% success rate with your trades just to break even.

Personally I don't think that is a realistic goal for > 80% success rate - especially to a newbie

 

[maxima]

I think you need to thoroughly test your strat before trading with money.

well. I cannot explain details (just because I dont trade by system). I traded for 10p, 20p, 50p for a few weeks. It works for me.

14pt stop is not the same as for hours open position. I close as soon as I see it coming wrong way. stop is just in case internet disconnected, computer crashed, lightning struck etc.

but when I bet 20 quid my 14pt stop was hit.. (dont think it was unlucky coincidence).

this is why I am asking - how I can do the same what I want and make 500 in cash without clashing with people with leather jackets and lead pipes (I am not afraid - I just dont see the point fighting these forces not having bat-mobile and few dozen missiles in the garden).

Ultimately I need to find a provider which will not lose on such positions (hence wont be bothered to stop me).

 

[CHRISTO9HER]

Can I just point out that sb companies hedge their NET position in any asset. Therefore they don't really care how many £/point you go, that is not what bothers them. Its not as if they cant hedge a small position, because it just gets added to all the other positions!

What they do care about is people holding the bet open for very small periods of time, because they cannot hedge on a continuous, instantaneous basis. Hope this separates the two issues for everyone...

They DO NOT care about bet size....

They DO care about bet duration....

 

[maxima]

They DO NOT care about bet size....

They DO care about bet duration....

I wouldnt agree.

If they cant hedge short-lived trades then they lose money out of their own pocket. This WHY they care about bet duration. Right?

Bigger bet in such case make them lose more. This is why the DO care about bet size. Or to be more precise - they care MORE about large scalping bets than about small ones.

I would do... Surely they are not more stupid than me...

 

[gooseman]

I don't think he meant together. A large scalping trade is nigh on impossible to have on I reckon.

 

[CHRISTO9HER]

I wouldnt agree.

If they cant hedge short-lived trades then they lose money out of their own pocket. This WHY they care about bet duration. Right?

Bigger bet in such case make them lose more. This is why the DO care about bet size. Or to be more precise - they care MORE about large scalping bets than about small ones.

I would do... Surely they are not more stupid than me...

They are most definately not more stupid than you.

I said that they dont like very short bets. Of course, if it is going to be a short bet, they would prefer it to be small. (I thought that would be obvious).

What I am saying is if you are holding it for a reasonable amount of time (a few hours or whatever) then they really couldnt care less what size it is.

They look at EVERYTHING on a net basis, they dont think "oohh look John Smith just bought 2£ a point on BT, quick quick HEDGE!!"

Every few hours they will look at their overall exposure to each asset and decide what they want their exposure to be (sometimes they will take positions). For that reason, as long as you are not scalping, they dont mind you making a profit. They are very much in control of their exposure. In fact, they like you to make profit because you will be sticking around.

You hear so many people saying that they will kick you off if you are profitable......only if you are abitraging, scalping or otherwise ****ing them over!!!

 

[OutnumberedOutgunned]

christopher9, the way you are posting i imagine you are a successful trader?

 

[CHRISTO9HER]

christopher9, the way you are posting i imagine you are a successful trader?

Not particularly. Pretty new actually.

One of my friends has worked for 2 well known spread betting companies. He has explained to me in great detail the way it all works. The good points, the bad points, and the misconceptions.

 

[maxima]

Not particularly. Pretty new actually.

One of my friends has worked for 2 well known spread betting companies. He has explained to me in great detail the way it all works. The good points, the bad points, and the misconceptions.

would you bother to share it with us? :idea:

 

[CHRISTO9HER]

would you bother to share it with us? :idea:

I will try to answer any specific questions that you may have. And if I cant answer any of them then I will ask my friend his opinion. Not going to try to write a general post trying to explain every aspect of it though because it would be too long.

Just please dont ask questions about specific companies

 

[0007]

I will try to answer any specific questions that you may have. And if I cant answer any of them then I will ask my friend his opinion. Not going to try to write a general post trying to explain every aspect of it though because it would be too long.

Just please dont ask questions about specific companies

Oh go on ! I think it could be very interesting. :clap:

 

[marlintrdg]

I will try to answer any specific questions that you may have. And if I cant answer any of them then I will ask my friend his opinion. Not going to try to write a general post trying to explain every aspect of it though because it would be too long.

Just please dont ask questions about specific companies

I have one, do these problems that keep showing up in the SB forum happen in End-Of-Day Trading? Or is this a daytrading and intra-daytrading problem?

 

[CHRISTO9HER]

I have one, do these problems that keep showing up in the SB forum happen in End-Of-Day Trading? Or is this a daytrading and intra-daytrading problem?

Some of the problems will affect end of day traders less than intraday traders.

An example of a problem affecting EoD traders less than ID traders would be things like 1 or 2 pip requotes. I mean, if they requote you 1 or 2 pips (which can happen quite a lot) and you are a swing or long term trader then it can be annoying but you dont really care that much. If you are only going to hold it for a short time then 2 pips may be more significant.

Also, things like an asset temporarily not being traded for whatever reason is far more troublesome (generally) for an ID short term trader than an EoD trader.

An example that can affect both EoD and ID traders in the same way would be an artificial price spike (a sharp and temporary spike in price that is not experienced in the underlying asset) that knocks out a load of stops.

It is my opinion that SB is better for people working on slightly longer time frames as these problems just become less annoying.

Hope that helps

 

[marlintrdg]

An example that can affect both EoD and ID traders in the same way would be an artificial price spike (a sharp and temporary spike in price that is not experienced in the underlying asset) that knocks out a load of stops.
Hope that helps

Thanks chris9,
Get these with 2 of the 4 SB brokers I'm using, I was wondering about that. reminds me of the locals in the pits when I used to trade commodities.

 

[maxima]

An example . . .would be an artificial price spike

this is it mate. If they fix prices then I am out. However good they are.

If you see a friend who is writing down your card/address details while you are phoning some shop/service - will you still talk to that person ever? I definitely will not.

 

[CHRISTO9HER]

this is it mate. If they fix prices then I am out. However good they are.

If you see a friend who is writing down your card/address details while you are phoning some shop/service - will you still talk to that person ever? I definitely will not.

I can see what you are saying...it is not nice to think that your stop getting hit may have been a manipulation.

This is probably the second biggest fear that people have about SB, with the first being "getting thrown off for being too profitable". I hope I have convinced one or two people that this reason is nonsense unless scalping.

But getting back to the price manipulation issue. It does happen, but not as much as people think. In a rolling daily bet, which is by far the most popular, the price tracks pretty well to underlying. I have spent many hours comparing realtime spot fx to SB prices and they track exactly. Only time they may differ is in a MAJOR spike in underlying, when they can delay and sometimes get ahead of the spike. In general though, the prices are really quite good.

They can be a bit worse for futures prices though, becuase people are less able to track the underlying.

BUT, they dont really manipulate prices much anymore because they cant really get away with it. They lose customers every time they do it, so its not worth it. They MAY move their quote by 1 or 2 pips to knock out a load of stops at a round number, but really nothing serious. And no-one on this forum would put their stops at round numbers anyway. Would they?

Overall, the advantages outweigh the costs!!

 

[fibbinstarchi]

This is exactly the reason why I'm interested in trading the actual fx spot market through two way futures direct access all wrapped in a tax free wrapper, you will be trading the actual market true prices, not some dodgy spreadbet companies own interpretation of the market.

 

[marlintrdg]

They MAY move their quote by 1 or 2 pips to knock out a load of stops at a round number, but really nothing serious. And no-one on this forum would put their stops at round numbers anyway. Would they?
Overall, the advantages outweigh the costs!!

This is my problem with IG where points are used and not price, although no real problems their, however if one did happen I would not be able to argue the point as I see it as I'm tracking price and their trading in points..