Spread Betting

[Vinnyvagus]

Hi everyone. Wondering if someone can give me a bit of advice. I'm looking into Spreadbetting (and I'm a complete newbie) but I am wondering if the Index's are the place to spreadbet in or maybe FOREX? I'm new to all this and learning by reading some books and websites but would like to see peoples opinions on this forum? I've opened an account with IG Index but have yet to add funds into it until I am sure I know what I am doing

 

[Jason101]

Uk shares may give you more time to play with for your money.

 

[alexa]

Since we can not really advertise on the board, I can only tell you spreadbets are ok for both index and forex. I have one. But remember that you always have to have a stop on those accounts. I use different brokers for different markets and different trading style, scalps, daytrade etc.

Take care.

 

[Vinnyvagus]

Jason101, why is it you say UK Shares may give me more time to play with my money? Could you give a little explanation or reason please

 

[Jason101]

Vinnyvagus,

Forex is highly geared and volatile so it can be very whippy, whip sawing up and down taking out your stops, fairly quickly. So you either need to know a bit more than a 'complete newbie', or you need deep pockets to cover large stops or lots of little ones. Hence my assertion that with the same money a trade on the right shares can be held open longer and give you more time to think about (learn) and plan what you are doing.

If you start with shares, your position will generally take longer to get stopped out and cost you less. You also have the added benefit of using volume indicators to help you trade.

This is very very general, a lot will depend on your style and time frames (what time frame charts you choose to make your entries and exits on), which will effect the amount of stop required (i.e. downside cost) and your profit target.)

I hope I have not been condescending. I took you at your word at being a complete newbie.

An important question is what length of time would you like to have your trades open for? Weeks, days or intraday? If you can answer that question, then I or someone else may be able to point you in some reading material direction.

Good Luck
Jason

 

[Vinnyvagus]

Thanks Jason101. You have not been condescending...I am a newbie As for the question asking what timeframe I will be trading on, I am thinking of starting out with days rather than intradays...

Thanks for the reply and any advise on reading material will be appreciated. Thanks again.

PS - Another question I know.... but if I keep a spreadbet open for a few days am I right in thinking there is a charge you pay to keep it open over night...or am I completely wrong?

 

[Jason101]

Thanks for the reply and any advise on reading material will be appreciated. Thanks again.

I would first read “Spread Betting Handbook by Malcolm Pryor” maybe twice. I would then throw it in the bin or give it away. It is a very good introduction to spread betting, but that is it. It covers most topics you will need to know (including money management i.e. risk per trade for size of account etc) It covers basic strategies and basic technical indicators.

It is good for background information. I would use it as an introduction to allow you to go on to a book that is worth keeping, I would recommend Alexander Elder, either his first book ‘Trading for a Living, or his second ‘Come into my Trading Room’ These books will have a slightly more mature look at trading and strategies.

These books are all good for someone who would want to keep trades open for a couple of days.

By the time you have read these and played a little, either demo, or small amounts of real money, you may know more about your style and choose to specialise, for which you could find new books in specific directions.

There are also lots and lots of good threads on here worth reading. The trouble with this place is you do not know who people are and you must remain a little sceptical about what you read. What is right for one may not be right for another and people can be very opinionated on these sites.

At the end of the day there are so many ways to win and loose your money trading (betting) the only way that is right will probably be personal to you.

PS - Another question I know.... but if I keep a spreadbet open for a few days am I right in thinking there is a charge you pay to keep it open over night...or am I completely wrong?

If you open a position on a spot (daily price) then each day the position is open (if you are using the roll over facility) you will pay for the spread again, which is deducted from your open position. If you buy a future, then the cost in the spread will be more but you will not pay each day for the extra spread. It all depends on how long you expect to keep the position open for.

If you are with IG and want to hold trades over a few days, then as a newbie it would not be to costly in the spread to use guaranteed stops.

I would recommend you start with small money, treat it as a hobby. A hobby you don’t mind spending (losing) money on. If you find out you can make consistent profits over a considerable amount of time, you are doing better than most people (and most people on this site) ever will.

Good Luck Again

Jason

 

[Jason Rogers]

PS - Another question I know.... but if I keep a spreadbet open for a few days am I right in thinking there is a charge you pay to keep it open over night...or am I completely wrong?

You could also potentially earn the rollover or swap so check with your broker if you plan to hold a position open for more than a day. It may be listed on the broker's platform or somewhere on the website.