Spreadbetting Vs Real Trading

[Strategic Trader]

dr_d_michaelson

i said "to be able to" - that does not mean if they do or do not - it means wether they have the capability to do it

 

[darrenf]

If the FX brokers charge a 3 pip spread and Deal4Free charge exactly the same, what is the benefit of using an FX broker?

The main reason imo is the platform flexibility. The main differential is being able to use contingent orders for me.

I have both fx broker and sb accounts and I find myself using the fx broker more due to this.

Other than that, there is really no difference. (Other than the tax of course).

If an SB company starts to offer contingent orders on fx (supposedly coming soon I have heard) then I may drift back to SB.

 

[Spreadbetteur]

One of the main tricks I have noticed, when I use my SB accounts is that after you click on your entry price:

If price moves, by a few pips, in your favour they often do not fill you.

If price moves against you by any number of pips, you get filled.

*******s

 

[Spreadbetteur]

Wow that was cool I wrote BXXtards and got XXXXXXX

 

[BBB]

BBB

Who do you recommend for direct access trading for FX ?

Can you trade the cash price or just the future, via direct access ?

How does trading the future compare with the cash in terms of liquidity ?

What is your opinion of the middle option - retail banks, FXCM / Saxo ? Are they not just SB's in posh clothing ?

What charting package do you use ?

What is "...a tickners cuss" ?

lol - tinkers cuss!

I don't know too much about retail FX - just enough to know that it doesnt apeal. I'm not the best person to ask on advise for FX brokers. Yes I'd agree that most of them are bookies in 'posh clothing' - but probably not quite as bent.

In general, if you want to trade FX you can either do it with a retail FX broker - but youre not really trading the cash market as some think - they are trading against the broker (who does offset in the spot I believe). Or, you can trade futures or options on the currency. That will be direct access.

FX futures wont generally be liquid as the spot/cash market - some futures are more liquid than others - EuroFX (EUR/USD) being the most liquid - ad it trades for about 23 hours of the day (although only really liquid enough from 10am-5pm GMT imo). Whether or not the other futures like Yen or GBP are liquid enough will largely depend on your time frame imo.

 

[darrenf]

Spreadbetteeeuuuuurrrrr.

The most often recommended fx brokers would appear to be FXCM and GFT. FXCM have offices in London and offer £ accounts. I have an account with them and have no complaints. Their spreads are a little wider than some, but I have never experienced slippage, even in fast markets.

GFT are based in NY and $ accounts only but come highly recommended from experienced FX traders. I have heard they are to offer £ accounts in the new year and I will probably open an account with them when this becomes available (I'm a simple soul and like to see my money in £)

Saxo, Oanda and CMS also seem popular choices but I have never looked at them closely.

I would steer clear of any fx brokers other than the "well known" ones. I have heard horrendous tales of fx brokers appearing to offer great looking packages, low spreads etc but screwing people on execution, slippage etc.

At the end of the day, you do have to remember that they have the same business model as sb companies and with most fx co's being outside the UK and unregulated, you have to very careful who you deposit your hard earned with!

 

[Spreadbetteur]

Darren

What made you go the retail bank route as opposed to Direct Access ?

Do you also hava SB account ?

What charts do you use ?

 

[zzaxx99]

Other folks -

By managing the position I mean the ability to scale in and out of the position.

Still don't get your point - what about the SB platform stops you scaling in and out of a position? Surely all you do as a SB client is to add/reduce the outstanding size of your bet?

 

[darrenf]

Darren

What made you go the retail bank route as opposed to Direct Access ?

Do you also hava SB account ?

What charts do you use ?

As I said a few post ago, direct access in to the spot market requires huge capital. To trade futures in the way I want to would require £20 per point approx minumum which I don't have sufficient capital to warrant from a money management perspective yet.

There are disadvantages to futures as well. The spreads can widen drastically during low volume times and the only very liquid contract is EURUSD from what I am told. I sometimes leave positions open overnight on a swinger when the spreads can widen.

I also sometimes trade swissy, yen etc which are not well supported by futures. (again I am told).

I know several experienced/ profitable fx traders via bulletin boards and they all use fx brokers without any real issues.

I have an SB account with CMC which I have not used much in the last few months. In comparison with FXCM, their platform is less flexible, charts poorer, and customer service none existent. That said, you are able to scale in/ out with cmc using multiple stop/ limit orders although it is a bit more complex than with fxcm.

I use FXCM charts. You can download the charts and a demo platform from their website. (As with all the fx brokers I have mentioned.

 

[LION63]

I believe that IG Index offer contingent orders but their spreads are too wide. Somewhere on these boards it was indicated that one of the other SB companies also offers them.

 

[LION63]

When you trade FX through the brokers is it 24 hours or do the markets close? The reason I ask this trivial question is that if you trade them (the majors) through Deal4Free, they are open 24 hours apart from the Euro/Dollar that closes for 1 hour each day. The advantage is simply that there are few gaps in prices and as such the charts are better.

 

[the blades]

Why bother spread betting when you can get smaller spreads on currency futures?

I am amazed that people handicap themselves unecessarily with wide spreads when you can use futures !

You seek to put the odds in your favour - not to hamper yourself.

Oh dear.....I've finally been drawn in

Correct me ifi'm wrong (and I may be) but isn't spreadbetting the only tax free vehicle? If so, then the answer is simple - anyone making profit (If they exist) is free from tax. I cannot make claims about future profitability but I can state that over the last 2 years, the tax that I have saved has outweighed all comission I have paid to the SB companies.

As for whether I have lost out through spread bias on shares - the SB company offer a calculation (that doesn't include bias) - I check it when I trade and I've yet to see any evidence. Where I have seen bias, on index futures, it can actually be used in your favour, as sugested somewhere above.

All IMHO

UTB

 

[darrenf]

When you trade FX through the brokers is it 24 hours or do the markets close? The reason I ask this trivial question is that if you trade them (the majors) through Deal4Free, they are open 24 hours apart from the Euro/Dollar that closes for 1 hour each day. The advantage is simply that there are few gaps in prices and as such the charts are better.

FXCM is 24 hrs. The spot market runs 24hrs from sunday evening 10pm ish to friday evening 9pm UK time.

I amsurprised cmc close 1 hr per day on euro although I haven't used them for a while. They never used to.

 

[Spreadbetteur]

I am convinced that the SB companies offer 2/3 different feeds.

One for longs

One for shorts

and possibily one mid spread for when you have no posititon.

I do not mean on an individual customer basis. Just customers with long positions (as a group) and short positions.

Often notice that when I am in a winning position, the SB lags, though when I am in a losing position it suddenly is ahead.

It would be quite easy for a programmer to include this bias filter.

 

[debs]

I believe that IG Index offer contingent orders but their spreads are too wide. Somewhere on these boards it was indicated that one of the other SB companies also offers them.

Finspreads offer online contingent orders....D.

 

[Tuffty]

A general comment:-

People who find it hard to trust others may find it difficult to use a spread betting account.

Why? Because a high degree of trust that the spread better isn’t going to screw you around is needed as they may take the other side of the trade.

 

[darrenf]

Finspreads offer online contingent orders....D.

Does anyone know what their spreads are on spot cable/ euro/ swissy?


It's not on their website.

 

[darrenf]

Actually- just found it

it's 6 on all of them. Still a bit steep.

 

[prisoner66]

I haven't read the whole thread here, but there does seem to be a lot of negative comment about spreadbetting or indeed if it can possibly be profitable or is what some think is "real" trading?

However, I thought my own experiences and comments may be relevant. I started trading 6 years ago, first with stocks, buying and selling using fundamental information and technicals. Some success but ended up losing a fair amount. Looked for better ways, got more into technicals then decided to throw out all tipsters, market gossip etc etc. Cancelled my sub to Shares magazine the FT and all that. Then stopped trading individual stocks altogether and went over to indices only.

This got me into spreadbetting and more recently futures, I use both along side each other now. Last year after 2 years of spreadbetting I finally managed to recoup all the losses I made with stocks. I haven't traded that much this year because of other commitments. But needless to say I dont have a day job, I am just returning to trading now.

The point is that I realised that there is no such thing as a right or wrong instrument to trade, it is whatever you as a person feels happy with. My own strategy means I only ever look at 2 indices and have 3 decisions to make....in or out....trade up or trade down.

I find spreadbetting a nice way to earn my money, the bets are smallish at £5 per point on average and if I can take 25 clear points after spread a day I am happy with that. Is it profitable?..Yes it is, but then again I am not looking to earn 100K a year doing it. I have had a couple of spectacular falls, but these have been due to my own trading mistakes...........those same errors of judgement would have been expensive whatever I was trading.

So........I say, keep it very very simple, dont fill your head with pretence or snobbery and if you DONT feel a bit of trepidation when you are about to trade. Stop right there and walk away. Spreadbetting is as profitable as any other method if it suits you and all this talk of spreadbetting companies not being completely straightforward is rubbish if your trade is correct in the first place. In saying that....just be careful where you place your stops ok..........enough said .

Happy spreadbetting...or whatever.

 

[wisestguy]

2 different issues here:


>>You'd have to have a fairly elevated opinion of your own capabilities to consider you were in a position >>to make that judgement of others.


nonsense . I have an honest opinion of my abilities and that has nothing to do with this convesation.

pot-kettle-black as they say.

>>A position which, from my perspective, is yet to be proven - by a long chalk.


there you go again , as if anyone needs your approval .