Spread Betting the Dow

[Bigbusiness]

Phil,

I haven't had these problems. Been using Deal4free for over a year and I find they are very good. They have made two mistakes with my orders but they were sorted out within a few minutes after calling them.

With the new software I haven't had a re-quote for a long time. I check my stop orders and cancel any that haven't been closed. So far I haven't forgotten to do this but it would be annoying if it happened.

 

[Myrtle]

I have been helped a great deal this week with everyones input. I bet I've saved the cost of a "course" just taking other TRADERS input into account. I am still virtual trading and intend to for a considerable amount of time. Im going to take up rossored and make my first appearance ever anywhere in a chat room on Tuesday. It sounds like a lot of information is traded there - room for a virgin?
Many thanks folks I believe taking information from you guys is superior to any paid for "training"

 

[rossored]

Take it easy Phil!! I thought this was a public forum and we were all entitled to our opinions! I had put this bit in the text, in case you hadn't seen it -

"however, each to their own and I do think you have to find your own style, find which indicators work for you (ie which ones you can understand and read clearly) and trade a market that you enjoy trading, because if you're not enjoying it then you probably shouldnt be doing it!"

Yes, ask anyone and they'll say the Dow can be a killer. I, like most, have lost money on the darn thing at one time or another. Hence the recommendation to come into the chatroom, have a chat and see what it's all about. I dont profess to be a master trader - far from it - but if someone asks a question that I feel even remotely qualified to answer, then I'll answer it, try to help, and they can take from it what they will.

Cheers anyway,

RR

 

[peto]

The dow and the S&P move very close to each other, you can win or lose about as quickly whichever you trade! The S&P tends to move in a direction that about the average of the Dow and the Nasdaq moves.

I would agree that D4F are good.

Not had a re-quote for ages, lightning fast executions and easily the best spreads available (unless you get a futures account with IB for example), and the best SB platform around

And yes, of course you have to remember to cancel any stop or limit orders when you manualy close a trade.

 

[philhackett]

Sorry if I seemed short, I am trying to do several things at the same time, which at my age is increasingly difficult.

Each to his own.

The big drop could be next week, tuesday even.

Phil

 

[The Beyonder]

An interesting few points from people.

Like ross I'm with IG and haven't had any problems but it's their spreads that I don't like. If D4F are narrower then it's worth a sniff. As I said I'm waiting for a demo disc, it's supposed to be the actual software (not a cut-down version) but obviously without the dealing facility. I'll try and run both together if my laptop doesn't crash and place dummy deals.
I also agree with ross that the other indices can be very snail-like compared to the Dow (I'm even scared to have a p*ss in case I miss something). Having said that, if you're brand new, maybe something slower is better, each to their own as you say.
Thanks for the stuff about Xpertrader Phil. I had a quick look at their site, interesting. I use eSignal and they've got Kagi charts so I might experiment with them next week.

Cheers all

The Beyonder

 

[philhackett]

Watch the Deal4Free Spread on screen while you ask them for a quote on the telephone. They will often quote a completely different spread on the telephone.

 

[sidinuk]

I don't understand when you say the S&P500 is slower moving than the dow? With D4F the s&p is priced in tenths. So a £5/pt bet is actually £5/tenth of a point.

On Friday the dow had a range of 84 points and the S&P had a range of 78 tenths, so they are pretty identical. That's a little unusual actually, normally the S&P has a slightly wider range than the dow as it trades a slightly higher level, 933.0 (x10) v 8600.

On the futures market the e-mini s&p is $50/full point whereas the mini dow is $5/full point. So they are almost identical if you multiply the S&p value by 10.

 

[JonnyT]

The S&Ps (eminis) are more volatile than the DOW. Probably due to the massive volume.

JonnyT

 

[Skimbleshanks]

I believe the S&P eminis and the Dow are evenly matched. Nine points on the Dow equates, approximately, to one point on the S&P eminis.

Therefore you need to take this into account when determining your bet size - if you trade £9 per point on the eminis, then you'd need to trade £1 per point on the Dow, etc.

Once you look at indices based on the above, then there's very little to choose between them in terms of trading.

 

[bonsai]

so far this year, there is 95% correlation between S&P and dow.
when there are differences in movement, they dont last very long
<img src="http://web.onetel.net.uk/~gawgaw/djvsp.gif">

 

[philhackett]

A fast ascent, or decent, is slow enough on the S&P to think, or even visit the rest room, without losing an arm and a leg. At least it is down here in deepest Bramley

Regards

Phil

 

[stoploss please]

Hi all. this is my first posting so would like to say hello.
I am using IG and I do find their spreads a bit aggressive. I went to the Update conference a few months back. Updata were pushing Cantors alot. Apparently, they do not try and position themselves against you were as IG can be very aggressive in their pricing. Is anyone using Cantors and if so, what are they like.

 

[bottomdollar]

Hi All,

I've started SB the DOW and FTSE intraday and not doing too good.. hmm.. already lost my first 1k
Anyway, it's been a learning experience.. my top advice I'd give anyone from my experience is:

1. Trade with the trend..
2. If you have a 9-5 job like me, SB the DOW when you get home.. don't SB during work when you can't give it your full attention
3. Always trade with stop losses (max for me is 20 points)
4. SB the DOW rather than the FTSE (see point 2).. also DOW movements aren't so erratic and it moves a lot more than the FTSE
5. Remember the spreads!!

Any others people can think of? Any words of advice anyone can give me??

ps. I've just pumped another 1k into my account.. hope I do better this time!

 

[Skimbleshanks]

Sounds to me like you've forgotten to apply money management rules, and as a consequence you've wiped your account

Success in this game means being able to come back and trade the following day - a wiped account means you can't without dipping further into your pockets.

Money management rules are: only risk 1% on each trade. So if you have a base £1,000 in your account then the maximum you can risk every time you open a position is £10. So if your stop is 20 points then that means the maximum you should ever bet is 50p per point (50p per point x 20 points = £10).

So many people come into this game with the idea that they'll make bucketloads of dosh, but the harsh reality is that they are statistically likely to get wiped.

You're in a fortunate position in that you can pump another 1k into your account - so this time, abide by money management rules, and your own rules above.

Give yourself a goal - I suggest you go for 10% a month. This is attainable on a small 1k pot. So you have to make £100 - that is £5 per trading day. At 50p a point that is 10 points per day.

You may laugh and think that you can do better than that, but you need to build up consistency and experience, and 10% per month is brilliant!

Keep a trading record of your entries and exits - why you took then, what you were feeling like (worried you'd lose your gains, unsure, frightened, etc), and DON'T think about money - only about points. Money is not important, points are.

Phew - that's given you a long list of things to think about, and I hope you will take it steady and cautiously, and I look forward to hearing how you've done in a month's time!

Happy trading!

 

[oatman]

I have just switched from Ftse to Dow. The ftse is becoming very difficult with it's narrower daily ranges.

Good luck

 

[bonsai]

select an indicator that is in tune with your stop loss.

the dow can move rapidly.
if your indicator is too slow .........

20pts on the dow can happen very quickly.

 

[awllee]

Bonsai.. which indicators are fast indicators?

I agree with Oatman, the FTSE too narrow and DOW is better...

 

[bonsai]

they dont necessarily have to be fast indicators.
but its worth having one that bottoms with the last low on the dow before you enter the trade ?

 

[rudolf]

SB'ing the Dow - getting started with finspreads.

Hi All,

I've been SB'ing the Dow for approx 1 year and have found finspreads helpful for getting started.

They offer an introductory course / 'trading academy' over 8 weeks or so and, during that period, you can trade the Dow at 1p per point (online) - this allows you to trade for real without losing your shirt.

Other points re: the Finspreads system are:

1. Daily dow spread = 7 points.

2. Quotes updated periodically or on manual refresh (can take several secs to action)

3. A firm quote is given when you want to enter a trade - if the market's moving fast, this can take several secs and can be 10 ticks or so away from the indicative price. You then have 2 or 3 secs to confirm your trade.

For the above reasons, it has proven very difficult to trade intraday and it's so easy to get burnt for 20 points on any false breakout. Suggest it is best used in conjunction with end-of-day analysis / swing trading, with your preferred analysis + indicators.


The Cantorindex online system is superior in that the prices update in real-time and it's a simple one-click effort to enter a trade.

Other points re: the Cantor system are:

1. Spread = 8 points.

2. Minimum stake = £2.

3. Occasionally, the trade is rejected - this maybe because the market has moved 'too far' from the quoted price.

The latter point is a bit of a showstopper when the market's moving fast and you need to get out quickly - in such circumstances, you resort to the phone service, so may as well be trading by phone in the first place.

Hope the above thoughts help,

Dave