Spread Betting

orchard

Active member
163 2
Regarding charts etc. I have been looking at Ceefax on BBC2 page 232. It shows the DOW on an hourly basis. Having looked for some time now, it would appear to me that the general trend is always shown (or no trend if applicable). I can only access my spreadbetting after 6.00 pm so I have been watching the later prices. I intend to trade the DOW dailies only in the last 45 minutes or so, and do not intend to trade with large amounts but test the water first.
Am I being a fool?
 

ChartMan

Legendary member
5,580 46
Look back over some of my daily DOW charts- I quite often make comments fot the "Tea Time Traders" - those that can trade after 7pm. There are regularly good opportunities if you have the patience and dilligence to analyse the day's action and current position, then act on it. Quite often, the last 2 hours captures the biggest moves of the day.
 

Cigar

Well-known member
292 13
Orchard Why not test your system for a week or so. Decide where you would buy and sell, where your stop loss would be. To make it more realistic, use the bid/ask prices from a spreadbetter. At the end of the week, check your paper trades, what you have won or lost. If it works for you, then maybe risk a little money. Don't rush to spend money. It'll cost you plenty before you become profitable, so save a bit in these initial stages.
 

ihickling

Junior member
11 2
Cigar/Chartman - sound advice, patience, discipline, preparation and a plan is the way to go or else you will be throwing money away.

Also good advice on the mental side of trading.

A few well executed trades a week, with stop losses adhered to and good plan, will yeild more than diving in and out when you first start.

Fins allow 10p per point to test your strategy and if you make the usual mistakes most of us do you will not be seriously ruined, just a dent in your pride and a realisation that there is more to trading than meets the eye.

regard any money lost as the cost of tuition.

Good luck
 

DAVIEGRANT

Junior member
21 1
Some good stuff here chaps.

Is anyone willing to share their trading systems with us when using spread bets. Explain the exact entry set-up and most importantly the exit set-up. Also a brief explanation of its overall success or failure.
I am particlarly intrested in any Day trading methods on the Dow or any indices. But all methods of all time frames are still of overall interest.

many thanks in advance

Davie
 

Hughmac

Member
64 3
follow chartmans daily analysis on the Dow, this is the quickest way to learn and also log in to the chat room on this site where many traders post trades in real time.

You have to make the effort to learn some TA, there is tons of free stuff on the net, just search for info on any indicator using google etc

cheers

Hugh
 

orchard

Active member
163 2
Re daily trading on the DOW. I have been following it for some time. Sorry if I implied it was totally new to me. I do analyse the splits on BBC2. Tonight I made a quick £75 by going short, keeping an eagle eye on the prices, having already decided that I would come out at a certain level. (either up or down). I do realise that no matter how much you look and learn, there is always an element of luck, but I hope to keep the 'good' luck flowing and minimise the 'bad'. Paper trading is fun but I feel that real trading keeps you much more 'on the ball'. Appreciate all the comments - it has helped me enormously.
 

Naz

Experienced member
1,391 24
Your right Daviegrant there is some good stuff here.but i would like to see a few people sharing their trading systems with us as you suggested.

"Explain the exact entry set up and exit set-up"

I dont use spread betting and will only trade the Nasdaq index using the QQQ's.

Here's a set up for me.I'm a lover of Fibonacci on the $Ndx.(Nasdaq 100, ieQQQ's) Check out every pullback in its daily chart in this last leg down from January this year and you will see that every major pullback is to a fib level.If you play around with fib levels in every time frame you will find that the Nasdaq 100 loves them.

As MSFT and INTC make up such a large part of the Nasdaq 100,i wait until either one is at some kind of resistance ie a whole number etc and also the Index is at some kind of fib level in any kind of time frame.Then when i see that the ax is a big seller in either of those stocks i'll short the QQQ's.Will i pay a spread you bet your **** i wont. i'll place my order on the ask with island and act as a market maker and wait for someone to buy from me.

As island trades about 25% of the Q's and the Q's are one of the most liquid stocks in the world it will only be an instant that using islands sweeping technology someone will be routed to my order and i will be hiding just infront of some large order making sure its me that gets the fill.This way not only will i save the spread but i will very likely i'll get a price improvement on the official quote.

Why oh why should a trader realy want to pay a spread! when there is a trading system that allows him to trade an index and not pay one?

If the Q's turned by using MSFT as a turning point i'll then watch the the level 2 screen in that stock to decide when my exit might be.This works 70%-80% of the time.I know that this is not using spread betting but i hate paying spreads.However a spread better could still use the basics of this type of trade if he wanted to trade the index with a spread betting firm.

Now there is one of my ways for playing the Nasdaq 100 index.As Davie said common guys share some of your trading systems with us.
 
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dsmodi

Established member
509 2
hi naz et al,

great post naz - canm u tell us wot sort of charges you have to offset every month for your level II data and accompanying software....?

Cheers,
 

JJL3142

Active member
174 0
DAVIEGRANT and others brilliant post. I am glad that people are so open with their strategys - time for me to bed down and write my documentation down - so that i can hear the good and bad points. THanks

Pervaz
 

Naz

Experienced member
1,391 24
Yes dsmondi

Tradestation 6 for all US real time charts $80/month.Level 2 data and accompanying software,free from my US broker.

I get the Nasdaq level 2 direct access software free because i do enough trades for the broker to allow me this.But it is fairly standard practice for this to occur.Tradestation 6, (tradestation.com) Some people have told me is not available in the UK now to new users.So i should imagine e signal (esignal.com) would do the same job.
 
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Bankbuster

Junior member
18 0
I have been trading part time for 15 months using a spreadbet account and free live chart feed from lycos. A cheap and cheerful setup. My full time occupation allows me to daytrade after lunch, just in time for US market open. I only trade the daily DOW index because of its volatility and potential for huge profit. My trading experience is limited to the knowledge gained since I began spreadbetting. I am currently in a net loss position but believe my skills have improved sufficiently to eventually make some money. My daytrade technique is based on scalping. I also try to get in on the beginning of large swing trades.

I have an account with Deal4Free mainly because the software is easy to use and offers quick fills at £10 per point and below, and because of the apparent low spreads on offer compared to other spreadbet companies. However, I am becoming increasingly dissatisfied with this setup.

D4F typically offer a spread of 4 points on the DOW daily index, however the quoted spread is almost always 10 points away from the actual index level biased in favour of the current trend direction. The quoted spread is based on futures data and not the actual level of the index. The bias makes it very difficult for the spreadbet trader to get a fair price. Pre-orders are also triggered well ahead of the actual index level. In addition, the bias is volatile and can suddenly swing the other way. You can quickly find yourself 20 points down after just opening a position because of the bias phenomenon. This makes it extremely difficult to operate a tight stop loss system (I like to use 25 points). The same phenomenon can cause a 50 point profit to suddenly be reduced to 20 points. This panics many traders into exiting a winning trade too early. The bias then flicks back the other way leaving the winning trader reluctant to enter the market at a worse price. This is pure manipulation in favour of the spreadbet company and I am sick to death of it.

The clever traders are able to use the bias in their favour.This generally involves trading in the opposite direction to the general trend. However, I believe this is very difficult to master. My golden rule is to never take a price that is obviously too heavily biased unless you are planning a contrarian trade because your system indicates a reversal in trend (of which there have been many on the daily DOW just recently). Unfortunatley, this contradicts my trading with the trend preference.

More recenently, lycos have offered free realtime charting for nasdaq stocks and I have been using the data to assist my trade entry. The entry technique has similarities to a recent post by Naz.
I use 3 charts running concurrently. 1 and 5 min charts on the DOW and 1 min chart on Microsoft using a simple 100 MA. I have found that the DOW spread trend follows the Microsoft price action quite closely. So I use MSFT to act as a leading indicator. This stock heavily influences both nasdaq and dow indexes. MSFT bounces off whole number values and is a good leading indicator for entering long or short trades on the DOW index. I use the 5 min chart to judge trend, support, resistance and the 1 min charts for entry timing on either pullbacks for scalping or for breakouts away from support/resistance.

My decision making is based on taking account of numerous factors but I like to keep things simple with regard to entry setup. Am I trading with the trend, has the index pulled back to a suitable entry point, is the spread bias too large, are we close to key support/resistance levels. I also take account of calculated support, resistance and pivots based on previous intraday OHLC data, general market sentiment, expert opinion such as signalwatch and raptor web sites, max pain theory.

I believe it is extremely difficult to make speadbetting pay, however, it is possible and there are numerous spreadbet traders posting on the ADVFN daytraders thread that are successful. However, I now want to move on from spreadbetting. From what I've read on this site, it is easier to trade and more profitable using a direct access broker. I'm just not sure which way to go from here.................

Regards to all from Bankbuster
 

manorpark

Newbie
9 0
Hello all must say that everyones posts are excellent on all subjects.I have used SB,s for 18 months and have found the experience mindblowing. I am now in the process of setting up with a direct broker as the constant rows with a certain SB is depressing me and affecting decisions that i make during trading.It started back in march when i confronted them about my stop being hit when their quote never came within 80pts of it their answer was volitile market conditions.Two weeks later after phoning to cancel a different stop the stop i had cancelled suddenly became active while i was away from home bringing me into a position that i didnt want causing a loss of 3K that situation took 3 days to sort out after them loosing the taped phone conversation i could go on and on .I am now convinced that they have a hidden agenda as you say bankbuster their price action causes you to throw the towel in on many a good trade because you doubt your entry in the first place when you see the way they move their quote about.Friday i had the phone put down on me when i asked if the current quote for US30 was for the cash,futures or D4F top 30.New SBs watch out its dangerous putting your cash with those wolfs. Good luck to you all. neil
 

techMark

Junior member
16 0
Hi guys,

I've been through the the same thing with spreadbetting. Forget them. The next move is to open an futures account and trade e-mini S&P and e-mini Nasdaq contracts. There is an e-mini Dow but the volume is too low so far to be safely traded. The trading opportunities have been great recently and anyone with decent trading skills could have made some real money on a level playing field.

I'm using GNI @ $12 per trade which requires £10K to start your account. There are cheaper that also require less starting capital (will have to open one myself when I get around to it). Best thing is there are no dirty tricks - they just want to make their comission out of you. Immediate fills, all the order types, trading applications operational all the time, no bias, non of the stress and agravation you get from the SB companies, just you against the market.

You can loose a bunch of cash on futures too, but its the only way to find out whether you've really got what it takes or not. I expect I'll get shot down for saying that by the tiny minority who successfully take money from the SB bookies, but the rest who are demoralised by the SB experience will no doubt identify with it.
 

options

Senior member
2,374 218
Just had a thought.
If the fsa/sfa etc are there to protect members of the public, how come the SB's are allowed to work the way they do?

How come you never see baby pidgeons?

And can anyone shed light on the subject of just how they manage to grow seedless grapes?

Options
 
 
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