Stop loss lesson and D4F

[emasiello]

Stop lesson learnt

I'm new to all this, but am picking it up very fast, I learnt a very valuable lesson yesterday and wish to share it.

Have been trading dow/ftse for last 6 months quite successfully. Anyway had a good day yesterday (thurs) on the ftse (+30pts) and had to go to a seminar in the afternoon. Following some research decided to put on two pending trades

Stop sell @ 10307 (finally decided on 10298)
Limit buy @ 10380

Silly boy, never again. When I left the office it was at 10317 (approx), hence the reduction on the safer, lower stop sell. By the time I got back the stop sell had been executed (spiked!) and the buy had been executed and it was on its way down. Fantastic, a double whammy. Yes I have heard the rumour that SB Co's spike the spread to activate stops, but did not listen. Anyway, whilst this was going on I was at the CMC/deal4free offices on a TA induction, what a coincidence

Is there a easier way to setup pending trades or was I just unlucky? Next time I will not attempt to trade unless I have full access to the software, its not worth it, stops in place or not.

Apologies if I have not made myself clear, a 1to1 with Mr Rich is my next stop (oops!). Oh by the way I have just sub'ed to Esignal Basic and it seems pretty good so far.

 

[oatman]

The orders were OK but knowing the volatility of the Dow you should've placed "if done" stops, or OCOs.

 

[Splitlink]

I was interested in your post because I was on about that a short while ago. You'll see my post- last post Splitlink- on the menu, lower down. Trading the Dow makes me nervous so I stick to companies these days. I keep the stake proportionate to my risk and do not use stops as I feel that the less the SB knows about my intentions, the better. There is a case for using stops, I know, but I keep mine to myself. I have gone out to work several times and, on return, have seen that there has been a spike in my absence

Spreadbetters know where the stops are. If they can see forty or fifty, more or less, in the same area then its money for old rope, isn't it?

Split

 

[Orion]

"If done" orders (as opposed to OCOs) have been discussed here before. They are available for CFDs but not for spreadbets.

 

[emasiello]

The orders were OK but knowing the volatility of the Dow you should've placed "if done" stops, or OCOs.

Thanks oatman.

I havent used OCOs as yet, and dont think "if done" are available unless I go the CFD route (likely very soon).

 

[emasiello]

Splitlink,

You're right, the less they know the better. In future if I dont have time to monitor I will stay away (could have saved myself a few quid).

Has anyone had success with trading via PDA/GPRS? I know Cantor offer a service but the spreads are crazy!

Enzo

 

[emasiello]

Orion,

Have you used the D4F CFDs service? If so, how close is the price to the "real" market?

I use esignal for RT data/analysis, it annoys me that the SB price is sometimes so far off, although it reality it shouldnt make a difference.

Enzo

 

[juanbyte]

Enzo

Why did you place a buy order @ 10380 when the market was @ 10317??

I have had a look at the chart for that day and cannot see any spikes.

The high was around 10400 for about 1 hour, after that it continued to a low 10240.

You said SB Co's spike spreads, this was not the case.

It is easy to place blame on someone else, but to make money in this game the real reason has to be blamed and it looks like your method.

I do agree that you should not leave trades unmonitored on the Dow due to the volatility.

 

[emasiello]

OK, bear with me on this.

The market was low and following some basic TA concluded it would continue downwards past my sell stop of 10298. But also concluded that if the DOW did not make the 10298 and went upwards past 10380 it would continue thru 10400 etc..

I had a sell stop (as described above) at 10298, it would appear from my esignal feed the market didnt drop that far, hence the spike.

It could be my method, so I need to continue trying/training and asking questions. If I seem that have lost the plot let me know......

Enzo

 

[emasiello]

juanbyte,

As a rookie, I've just realised I should have posted the timings of each trade and possbily a chart.

10298.00000 13:32:14
10380.00000 15:11:00

The chart will have to wait, as I havent mastered by drawing technique as yet.

Apologies if I've made a hash of this posting, but needed to start asking questions.

Enzo

 

[juanbyte]

Hi Enzo

This does not sound like TA, it sounds like pivot points which I personally think are utter nonsence.

They should be called pick a point, the bit that makes me laugh about them is it is said that that if the market reverses off a low pivot point this is a buy, if it goes past that point it is a sell.

??? The market rarely reverses on the exact point so you do not know if you should buy or sell.

You missed 100 points between these prices.

I think you should not daytrade because of your work commitments, maybe look for an EOD method that works.

Trading is a serious business and should be treated as such, otherwise you will lose money.

 

[juanbyte]

Enzo

What time did you place the trade, 13:32 is before the market opened.

 

[Orion]

emasiello

I haven't used d4f's CFD service for a few years so I'm afraid I cannot reply with up-to-date information.

 

[emasiello]

OK, Thanks Orion.

Juanbyte

Thanks for your comments. My current method may be nonsense but it has been working fine, and will evolve according to market conditions. Each to their own and all that.

What this has taught me is that I should not place any trades (pending or otherwise) unless I can monitor and manage accordingly.

Trading whilst working is tough, but I will continue as I only learn by trading/losing.

Enzo

 

[Devon Womble]

Emasiello - I understand perfectly well what you are saying and I think you are right to be aggrieved. As you say, this issue has been discussed here many times before - some D4F users have said that stops are not activated by 'spikes' unless there is a trade at that price in the 'real market' but some, like you, have been kippered.

I would love to know if anyone has ever benefitted from one of these spikes - i.e. has had an exit of a position triggered (for profit) at a price that did not occur in the 'real market'.

If you are at D4F offices, you need to raise this with them. It only seems to be D4F that gives rise to this problem.

Cheers.

 

[juanbyte]

DW

The market traded 35 points higher than the buy and 55 points lower than the stop.

There was no spikes that day, it traded higher than the buy for about an hour.

The trader has to be reponsible for the trade, Enzo is correct he should be able to monitor and manage the trades at all times.

Enzo

If these 2 trades were your plan, if you were able to monitor the trades, would you have done anything differently?

 

[emasiello]

Juanbyte,

I would have shorted at 10298 (if it hit it!) as planned but stopped out when it reversed (20pts). And then taken profit once it hit 10400 (poss 10/20pts with trailing stop loss), obviously missing out the pts between 10300ish and 10380.

And then would have shorted again at 10300ish (as originally planned) and taken profit after 10/20/30pts with a trailing stop loss.

That would have been the plan, but its always easier after the event. One thing to bear in mind I trade based on Esginal numbers not D4F.

I havent checked the D4F chart for Thursday but I'm sure it will show a spike at 13.32 (10298) if not, I need to speak to them because according to my statement it shows a pending trade executed at 13.32 at 10298, resulting in the mentioned loss.

Enzo

 

[juanbyte]

Enzo

According to sierra charts at 13:32 the mkt droped to 10295
at 13:44 it was @ 10275

Did you trade on the employment news release at 13:30?

13:30 and 15:00 are very volatile times for trading.

Market moves fast on data releases see
http://biz.yahoo.com/c/e.html

Hope this helps

 

[emasiello]

OK, thanks for the help. I was intending to trade on the back of the news but did not have time.

if this is correct I am mistaken and need to start learning how to read charts. Have enjoyed the thread though, has it has now made want to contribute more to the forums and subsequently learn more from them.

On a side note, the data I receive via esignal is great but the charting tool is not, unless i subscribe to the top package. Should I invest in Sierra or Tahoe etc..?

Enzo

 

[Vaco]

I use D4F CFDs and I have to warn you that if you are going to trade the indices with stops DO NOT LEAVE THE STOPS ON out of normal market hours i.e 14:30-21:00 gmt as the spreads on the bid/ask is phenomonal and I mean it really really sucks.

As for their cfd spreads on stocks, they are very close to actual market normally about 1c on each side of the outside bids, so how do they make their money?? well try placing a trade for more then 300 shares and you may as well make a cup of tea whilst your waiting