Spread Trading

compagnito

Junior member
17 0
It seems to me that the odds ought to be in the punters favour in spread betting financial markets.

The punter can choose when to enter, exit, & stake. The spread company chooses none of these.

With a large bank and small stakes it ought to be possible to consistently win - open a bet, it goes your way ride it - it goes against immediately close.

Am I missing something?
 

neil

Legendary member
5,167 748
Use the "Search" facility" and you will see that spreadbetting has been dicussed extensively. Try searching "spreads" as a first step in your research.

Then research"direct access" etc.
 

Sirlosealot

Member
63 4
You are either EXTREMELY skilful or very lucky if your trades don’t go against you at all. So you work out a stop policy and make sure that you only get out if the trade goes against you more than a certain amount. This amount you work out very carefully as being your risk reward ratio.

Unfortunately there is a law of physics, which says that however far you place your stop the market moves JUST enough to take it out. This happens after a period where all the tape reading, TA etc etc indisputably points to the action going one way. You decide to place your trade and you watch the price beginning to rumble. Wham Bam it whipsaws up and down sweeping every amateur out as it goes and then quietly goes its own way. This law hold even in stocks where careful analysis of the charts show they don’t really whipsaw. And when you look back at the chart at the end of the day when reviewing your trades, you cant really see any sign of a serious whipsaw –just enough to take you out.

So you decide to place your trade only at the opposite end of a range from where you think the price is going to go. This way you think you can place your stop far enough away from the whipsaws but still near enough to keep the Risk Reward ration worthwhile.

But the law says that however far you place your stop the market will move to take it out and on the odd occasions it doesn’t, it proceeds along the way you thought it would without coming close to your limit order.

Crack that and your half way to the Holy Grail. (IMHO)
 

compagnito

Junior member
17 0
My record thus far is:

Dow bet won £1350

Dow bet lost £1650

Nikkei bet lost £500

Dow bet won £260

Nikkei bet running bought out of money - eek - still 130 points to break even

Dow bet won £10

The Nikkei bets were following a partners advice and were a bit daft, but I seem to be learning.

I spent 8 years at the races so I know a bit about odds risk etc, compared to horse racing spread trading on indices looks a piece of piss.
 

keano

Well-known member
327 30
hehe...we'll see. I Look forward to your progress

P.S I won 45 pounds on the dogs last thursday...Now THAT'S easy money ;)
 

rossored

Senior member
2,103 56
Spread bets look like a piece of p*** do they??

According to your last post, you're already down £550 with 130ticks to come back on the Nikkei before you're at breakeven. I'd probably say you havent got a stop on that position, have you? So, not a promising start, is it?

If you're serious about trading (mind you, it doesnt sound like you are) then I'd suggest picking up a book and reading about it, or reading some of the more informed posts on this board.

From the size of your bets you are clearly playing with substantial position size. Might be an idea to reduce this.

We are mostly traders here. Very few gamblers. If you wish to survive you'd do well to listen to what people say. If you choose otherwise.... well, I'm sure the markets (particularly the Dow and the Nikkei) will kick you into shape soon enough.

Good luck.
 

pootanga

Newbie
6 0
Help!!!
have just read your message and wonderd if you or anyone else could give me some direction. I have traded stocks before (approx 6 years ago) and am intrested to learn spreads. i am bombarded with mail through advfn about books and seminars with vince standzione and various others at £300 a book, all claiming to be able to make you wealthy. £300 is alot of money to be diappointed. Could anyone give me a good starting point, book etc
Thanks
 

chump

Senior member
2,212 274
"Unfortunately there is a law of physics, which says that however far you place your stop the market moves JUST enough to take it out. This "

..by way of reply to the above ..this is not a "Law" at all it is a
fundamental misunderstanding as to what you are doing and it took me a year , in excess of 2000hrs of reading,god knows how many hours of discussion and charting before I really understood how all the pieces fit together..no free lunches as is stated on another thread today..work at it if you are interested enough and it will come...


Cheers
 

comino

Junior member
29 0
Long learning curve

I started with the same confidence and attitude some time ago ,but quikly found out gambling and trading are two different things alltogether were if you place a bet on a horse it's an open close situation were you get rid of the responsiblity and you have no control on the outcome of the result,whereby trading the responsbility of the result is constantly with yourself and that is when you find out that race can keep going on indefinatly and your still stuck to the saddle however hard you try to jump off,it also seems the glue gets thicker the more you trade.Be carefull with this attitude ,it can be fun in the beginning but when you start throwing things around and start losing sleep then this might not be a holiday anymore.But we all need to learn one way or the other ,that the only thing is for certain is that the market is always right, having this kind of confidence is a bit about yourself being right, it won't last long and will be taken apart and stripped down very quickly and painfully at times.Best of Luck
I still have traits of this kind of thinking in my trading and i still need to be taken down a few rungs or two when i have this,but i'm gradually getting the message.
 

neil

Legendary member
5,167 748
pootanga said:
Help!!!
have just read your message and wonderd if you or anyone else could give me some direction. I have traded stocks before (approx 6 years ago) and am intrested to learn spreads. i am bombarded with mail through advfn about books and seminars with vince standzione and various others at £300 a book, all claiming to be able to make you wealthy. £300 is alot of money to be diappointed. Could anyone give me a good starting point, book etc
Thanks

:eek: Kinell keep your money in your pocket for a few months.

Read this thread to start with:

http://www.trade2win.co.uk/boards/showthread.php?s=&threadid=8332

Then read and read.

Decide what sort of trader you are or at least understand the trader types ( Long term, intraday etc)

There are many styles of trading discussed on this board. Eventually you will piece together bits that attract you and you will have your very own method.

And use the "search" facility here.

It takes a long time of study and practice ( on dummy accounts for example)

I would write more but I have a stinking cold and in urgent need of a large handkerchief.

But remember - trading is a business; treat it as such.
 

compagnito

Junior member
17 0
Thanks for the replies, my own experiences were just a bit of brackgound to the main question which is why the spread firms have the advantage?

Thus far we have a law of physics and cos I'm a smart arse who deserves to loose.

I'cve read quite a bit of stuff here, the kindest description might be over complex.

Regarding my Nikkei position I did say it was a friend's position not a bet I would normally have made, and yes it was daft.

My Dow trades show one looser two winners. The tenner would have been £400 had I waited a couple of hours, but the base decision was correct, and woulda shoulda coulda are bollocks,
 

pootanga

Newbie
6 0
cheers neil will start with that lead.
would be grateful if you or any one could recommend any books.
hope the snoyyy nose gets better soon.
 

neil

Legendary member
5,167 748
coulda but didn't

compagnito said:
Thanks for the replies, my own experiences were just a bit of brackgound to the main question which is why the spread firms have the advantage?

Thus far we have a law of physics and cos I'm a smart arse who deserves to loose.

I'cve read quite a bit of stuff here, the kindest description might be over complex.

Regarding my Nikkei position I did say it was a friend's position not a bet I would normally have made, and yes it was daft.

My Dow trades show one looser two winners. The tenner would have been £400 had I waited a couple of hours, but the base decision was correct, and woulda shoulda coulda are bollocks,

Base decisions are worthless unless you make money.

Looser = opposite of tighter

Loser = opposite of winner

Loose = not tight or secured

Lose = What you are going to do unless you take note of what others, who are giving you their time free of charge, are trying to tell you.

Your biggest problem is your ego. Take care the Market doesn't teach you an expensive lesson.

Good luck
 
 
AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock