Turnaround Strategy for now and 2008 Remaining

[hamatrader]

Hi there,

I’ve been trading on and off for a while now and have so much still to learn and am still refining a strategy for my trading.
I currently trade the indices esp the DAX and FTSE.
I usually do intraday trading and occasionally leaving a position overnight. I am looking towards holding positions for a longer a period - maybe weekly or sometimes longer (possibly months) depending on market conditions. I feel here that if I do get a good entry point into a swing or positional trade it will be less risky to hold than for intra-day trading- that is the idea anyway. I think that when the market does turn around to be bullish (a possible rally later in the summer and towards the year end?) there may be a good opportunity. We haven’t had such a bearish market for a few years and I would like to take advantage of when the market does eventually turn.
The question I have is what is the best and most cost effective way of holding these longer swing or positional trading positions - whether weekly or longer? What do most people do in such situations? Currently I use Rolling SB positions in the DAX and FTSE. Would it be better to trade in a monthly contract such as the June 08 or Sept 08. Or maybe even a 2008 year-end contract? It will obviously cost for a basic stop-loss or more a guaranteed. What kind of position do you more experienced people hold in such situations? Or is there another way of holding such trading positions that I haven’t mentioned?

Sorry if some of the questions seem obvious, any information would be really great.
Thanks!
Hamatrader

 

[Hoggums]

Hi there,

I’ve been trading on and off for a while now and have so much still to learn and am still refining a strategy for my trading.
I currently trade the indices esp the DAX and FTSE.
I usually do intraday trading and occasionally leaving a position overnight. I am looking towards holding positions for a longer a period - maybe weekly or sometimes longer (possibly months) depending on market conditions. I feel here that if I do get a good entry point into a swing or positional trade it will be less risky to hold than for intra-day trading- that is the idea anyway. I think that when the market does turn around to be bullish (a possible rally later in the summer and towards the year end?) there may be a good opportunity. We haven’t had such a bearish market for a few years and I would like to take advantage of when the market does eventually turn.
The question I have is what is the best and most cost effective way of holding these longer swing or positional trading positions - whether weekly or longer? What do most people do in such situations? Currently I use Rolling SB positions in the DAX and FTSE. Would it be better to trade in a monthly contract such as the June 08 or Sept 08. Or maybe even a 2008 year-end contract? It will obviously cost for a basic stop-loss or more a guaranteed. What kind of position do you more experienced people hold in such situations? Or is there another way of holding such trading positions that I haven’t mentioned?

Sorry if some of the questions seem obvious, any information would be really great.
Thanks!
Hamatrader

You don't mention which SB you are trading with - but generally speaking it is far cheaper to hold a long term position in a future rather than a rolling daily.

e.g. with Capital Spreads..

If you hold a FTSE future then you are effectively charged at BOe interest rates for holding the future (as it's priced upwards accordingly and slowly drifts down). If you are short then you effectively recieve BOE rate back.

If you hold a rolling then you are charged BOE rate + 2.5% if long and you recieve BOE rate -2.5% if short.

The only other provider I know about is IG and their terms are very vague. The best I can make out is that they apply approx 60% of the spread to your position when it's rolled over.

 

[the blades]

Hi there,

I’ve been trading on and off for a while now and have so much still to learn and am still refining a strategy for my trading.
I currently trade the indices esp the DAX and FTSE.
I usually do intraday trading and occasionally leaving a position overnight. I am looking towards holding positions for a longer a period - maybe weekly or sometimes longer (possibly months) depending on market conditions. I feel here that if I do get a good entry point into a swing or positional trade it will be less risky to hold than for intra-day trading- that is the idea anyway. I think that when the market does turn around to be bullish (a possible rally later in the summer and towards the year end?) there may be a good opportunity. We haven’t had such a bearish market for a few years and I would like to take advantage of when the market does eventually turn.
The question I have is what is the best and most cost effective way of holding these longer swing or positional trading positions - whether weekly or longer? What do most people do in such situations? Currently I use Rolling SB positions in the DAX and FTSE. Would it be better to trade in a monthly contract such as the June 08 or Sept 08. Or maybe even a 2008 year-end contract? It will obviously cost for a basic stop-loss or more a guaranteed. What kind of position do you more experienced people hold in such situations? Or is there another way of holding such trading positions that I haven’t mentioned?

Sorry if some of the questions seem obvious, any information would be really great.
Thanks!
Hamatrader

Basically what Hoggums said - though I think more often the rollover charges are for the quartelry bets - and for the daily bets there is little if any charge. The interest charge is the stinger.

The last time I looked, the break even was "about" a week - so if you're holding for longer than that you're best to hold quarterly (or futures) positions.

With CMC your positions will automatically roll at the end of each quarter with no spread - with all the others you're stung by about half the spread. Then again, with several of the others (IG, Fins and World) you might get credit - so you don't put any money uop-front - so you save here. With CMC you have to pay the margin up front.

I have accounts with all the above and trade stocks though CMC (FTSE350) and IG (for small cap) I use the others for currencies and index bets. I hold shares from a few weeks to a few months, and use quarterly bets.

All the above is ref UK stock. I hold US stock directly through DMA with IB.

Cheers,
UTB

 

[hamatrader]

You don't mention which SB you are trading with - but generally speaking it is far cheaper to hold a long term position in a future rather than a rolling daily.

e.g. with Capital Spreads..

If you hold a FTSE future then you are effectively charged at BOe interest rates for holding the future (as it's priced upwards accordingly and slowly drifts down). If you are short then you effectively recieve BOE rate back.

If you hold a rolling then you are charged BOE rate + 2.5% if long and you recieve BOE rate -2.5% if short.

The only other provider I know about is IG and their terms are very vague. The best I can make out is that they apply approx 60% of the spread to your position when it's rolled over.

Thanks Hoggums for the information.
I have been using Capital Spreads and Interactive Investor, though I am in the process of starting with IGIndex because of there 24hr online and phone trading ability, and the greater market possibilities.I also think that Interactive are unreliable in in a number of ways.
Sorry, but when you say 'a future' I presume you are talking about the quarterly contract (eg Sept 08) or end of year contract? I did think that it would work out cheaper using a future, as with the daily rollings you are charged nightly.
In the present climate I was thinking of entering the Sept or Year End Dax contract. In fact I had forgotten about the possibility of rolling over quarterlies and maybe therefore these would be better! This is with the presumtion that the market will bottom sometime in the coming week/s or months.
From what you say it seems that you are a swing/positional trader?
Thanks Again.

 

[the blades]

Thanks Hoggums for the information.
I have been using Capital Spreads and Interactive Investor, though I am in the process of starting with IGIndex because of there 24hr online and phone trading ability, and the greater market possibilities.I also think that Interactive are unreliable in in a number of ways.
Sorry, but when you say 'a future' I presume you are talking about the quarterly contract (eg Sept 08) or end of year contract? I did think that it would work out cheaper using a future, as with the daily rollings you are charged nightly.
In the present climate I was thinking of entering the Sept or Year End Dax contract. In fact I had forgotten about the possibility of rolling over quarterlies and maybe therefore these would be better! This is with the presumtion that the market will bottom sometime in the coming week/s or months.
From what you say it seems that you are a swing/positional trader?
Thanks Again.

I know your question was directed at Hoggums but;

yes - a "future" is the quarterly.

You're best to hold the contract (or bet in this case) that is nearest to the time you think you'll close the bet. You'll pay a wider spread on (say) the December bet than the September bet - but less that if you held the Setpember then rolled it over into the December.

To be honest - the difference in these costs is small if you're position trading.

I'd suggest you look at CMC if you are trading FTSE350 stock, and now some small cap stocks. They are by far the cheapest.

UTB

 

[hamatrader]

Basically what Hoggums said - though I think more often the rollover charges are for the quartelry bets - and for the daily bets there is little if any charge. The interest charge is the stinger.

The last time I looked, the break even was "about" a week - so if you're holding for longer than that you're best to hold quarterly (or futures) positions.

With CMC your positions will automatically roll at the end of each quarter with no spread - with all the others you're stung by about half the spread. Then again, with several of the others (IG, Fins and World) you might get credit - so you don't put any money uop-front - so you save here. With CMC you have to pay the margin up front.

I have accounts with all the above and trade stocks though CMC (FTSE350) and IG (for small cap) I use the others for currencies and index bets. I hold shares from a few weeks to a few months, and use quarterly bets.

All the above is ref UK stock. I hold US stock directly through DMA with IB.

Cheers,
UTB

Thanks UTB.
I'm not sure when but as soon as the market conditions permit I am looking at holding for more than a week with one or more index position. So from what you say I should trade in the quarterly bets. Have you ever you used the year-end bets.
So how have you found swing/positional trading compared to daily intra-day trading. I know that each trading type will suit each person differently but it will be good to see the experiences of others. I also feel that with some indexes such as DJIA the only way to tame it is with longer positions. With short term intra-day trading i feel it is so difficult to predict and will eventually lead to losses. And I don't feel confident enough yet to trade stocks.

What do you make of cmc? I had a use of their demo a/c a while ago and am not sure about their interface. I've just had a look at IGIndex and at first looks it seems good.

Thanks Again.
Hamatrader

 

[the blades]

Thanks UTB.
I'm not sure when but as soon as the market conditions permit I am looking at holding for more than a week with one or more index position. So from what you say I should trade in the quarterly bets. Have you ever you used the year-end bets.
So how have you found swing/positional trading compared to daily intra-day trading. I know that each trading type will suit each person differently but it will be good to see the experiences of others. I also feel that with some indexes such as DJIA the only way to tame it is with longer positions. With short term intra-day trading i feel it is so difficult to predict and will eventually lead to losses. And I don't feel confident enough yet to trade stocks.

What do you make of cmc? I had a use of their demo a/c a while ago and am not sure about their interface. I've just had a look at IGIndex and at first looks it seems good.

Thanks Again.
Hamatrader

Hamtrader,

I trade stocks over a medium time frame - I have no opinion about this compared to other timeframes - plenty of people are successful in all TF's - though clearly the shorter it is the more you have to overcome spread and slippage.

I prefer longer time frames purely because I want to spend time away from my pc and not hold regular hours.

The year end bets are no different to quarterlies - it just depends on how long you want to hold.

CMC are very good AFAIC. They are the cheapest of all ref stocks, but don't cover the smaller stuff that IG do.

Have a look at the thread "cost of spreadbetting" for some insight. Download the spreadsheet at the end of the thread.

Cheers,
UTB

 

[hamatrader]

Hamtrader,

I trade stocks over a medium time frame - I have no opinion about this compared to other timeframes - plenty of people are successful in all TF's - though clearly the shorter it is the more you have to overcome spread and slippage.

I prefer longer time frames purely because I want to spend time away from my pc and not hold regular hours.

The year end bets are no different to quarterlies - it just depends on how long you want to hold.

CMC are very good AFAIC. They are the cheapest of all ref stocks, but don't cover the smaller stuff that IG do.

Have a look at the thread "cost of spreadbetting" for some insight. Download the spreadsheet at the end of the thread.

Cheers,
UTB

Hello UTB again,

You have said that you prefer the trending longer time frames for trades, and we have discussed trading over a time period of weeks and maybe a few months.
What would you say if ,for example, you were to open a September quarterly contract and roll it over into the December contract. And if things continue to go favourably you decide to roll over into the following contract. So in effect you are having a trade open for more than 6months and coming upto the year or more timescale. Being new to this I’m not sure if this is something that is done by many traders? Is it and effective lower risk longer term strategy (esp, in the present climate and presuming you enter at or around a market bottom)? Is there a particular point where you should get out and take your profits even if the market is trending in your direction?
And with these described longer timeframe trades do you still with quarterlies and roll them over?
Also I’ve noticed that with the September contracts there are September contracts and there are September Daily Future contracts. Is there any particular one that is preferred?
Hamatrader