Spread Betting - Level 2?

[DayBeliever]

Hi I am UK based and new to this forum (today) and a novice. I have worked in the financial industry for a number of years in the back office and always wondered what the front office was all about. I had a crack a 'day trading' spread betting FOREX for a couple of months between contracts a couple of years ago. Kept my head above the water for the majority of the time when I followed my rules. but, got caught up in the emotion on one trade. only lost a small amount relatively speaking about £500. So, stopped trading and went back to work. Read a number of books since. I'm now ready for another crack at it, will probably try my hand at the FTSE, Equities this time, whilst I learn.

I have just completed the Online Trading Academy DVD course which is heavily US based but, I'm sure the principles are the same. (Use of Level 2 to help spot resistance/support).

I know its all personal preference etc. I'm after any advice on whether to go down the Spread betting route again (I used GFTUK previously), or look for a Level 2 direct access solution? or some sort of combination, level 2 feed with SB.

I'm probably jumping the gun a bit, my first aim is to learn to trade profitably rather than worry about tax efficiency / stamp duty etc. Then I can always move to something more permanent. any advice would be great, cheers.

 

[The Leopard]

Some advice. Forget the bucket shops - most of them are useless full stop, and all will be useless if you want to make serious money. If you must have spread betting, go with one of the DMA ones, although you must really need SB to justify the increased commissions otherwise you're better off with a regular broker paying tax.

And forget online trading academy. They'll teach you garbage - if the instructors could make money trading instead of teaching, they'd be trading instead of teaching.

I looked at their 'Instructor' page - a lot of, erm, 'familiar' faces in there.

How much did the course cost you, out of interest?

 

[DayBeliever]

Thanks, good advice. Just I'm a little worried I may rack up the commissions with a regular broker initially, at least until I find my footing. although that may make me think harder about each trade I make. Spread betting at least seemed to be a little more forgiving whilst learning with just a £1 minimum for each pip. but, I realise this is probably just an illusion as I have to first beat the spread. Realistically I'm not going to be making any money over the next few weeks I just need to learn my stocks and see what works.

From the Videos I have been watching, these guys were trading the NASDAQ going through ECM's. A broker doesn't 'handle' their orders it goes direct to market and appears on the Level 2 instantly. Is there anything like that over here?
from the marketing bumph I have been reading in the UK, its seems different. I can't make out if these guys sit in between the order and the market or not... can you short?

OTA - I think the course was $2,500. I didn't fork out the cash personally just borrowed the disks off a friend who had. Its taken me a couple of weeks to watch them and made a change from reading books on the subjects. The course covers the standard stuff you can get in any book and a couple of things I hadn't read in the books, such as how to use the Level 2 Bids and Asks and monitoring the daily volumes at set periods. The main instructor (Mike McMahon) on the video has a good teaching manner, although I find myself saying "alrighty", "OK" and "Listen People" which he says countless times in each lesson.

 

[The Leopard]

If you just want to use the bucket shops to get your feet wet and test things with small stakes, that's probably OK. IG are probably the best of them.

If you want a real broker, IB is pretty good. Velocity are US based but you can use them from the UK, they have a nice, simple and reasonably priced package for people starting out.

A proper broker just places your order in the market and gets paid a commission. A bucket shop creates it's own market and rips you off in countless ways. Bucket shops are usually SB companies in the UK, and there's a lot of forex brokers in the US like that.

You can short if you're allowed to short. Most of the time yes on most things, occasionally there'll be restrictions on certain stocks or sectors.

 

[DayBeliever]

excellent, thanks for the advice I will check them out.

 

[mike.]

Tradefair are still offering there £100 bonus if you are just wanting to try out some s/b companies and platforms, Deposit £100, make about 5 trades and they will top up your account with another £100.
better than a kick up the ring piece