Why Spread Bet?

Calvin

Junior member
30 0
frog said:
Is that aimed at me?
I thought my general comments were about spreadbetting.
It can be quite stressful and I can't see any real harm in a touch of social banter.
I assume it's a senior members perogative to chastise us amateurs and I bow to your obvious
superiority.
I was hoping to show those learning the ropes an alternative to the usual ideas for successful trading but I'm not fussed whether I do or not,it's your choice.
But before I leave I would ask if you actually traded the FTSE scenario and acquired the spread
that you have quoted 'cos I'll change my SB provider forthwith.
I'm just home from the nightshift and am rather tired(I apologise yet again for going off topic)
but as a parting gesture will post my last weeks trades,spreads and S/Ls that I took on my 5 successful positions on the Dow before the day is out.

Frog

Les mots sont facile à dire mes les actions parlent beaucoup plus fort.

Well I was finding it useful anyway - as a relative beginner at spreads some 'real-time' insights into another trader's thinking was helpful. But apologies if it got a bit parochial - maybe I need a forum more than a board...
 

frog

Junior member
49 2
Calvin,how's your luck been?
Anyhow better late than never my last few trades in this order;
Date,prev.cl,spread,position taken,S/L,closing action,points
16th,9825,Oct9794-9804,buy 9804,sl9780,sell 9954, +150
17th,9954,Oct9920-9930,buy 9930,sl9915,sell 9985, +70
18th,9972,Nov9940-9951,buy 9951,sl9930,sell 10083, +132
19th,10083,Oct10078-10088,sell 10078,sl10130,buy10014,+64
20th,10040,Oct10018-10028,buy 10028,sl9970,sell 10088,+60

23rd,10110,Oct10113-10123,sell 10113,sl10150,buy10082,+31
24th,10073,Oct10097-10107,sell 10097,sl10155,SO 10155,-58
Oct10108-10118,sell 10108,sl10155,SO 10155,-47
Oct10120-10130,sell 10120,sl10165,buy10108,+12

Conclusion:I made rather a pigs ear of today.Firstly I should stick to my usual modus operandi which would have netted me smaller losses.Secondly if my stop losses had been
but a couple of points higher I would have made very small gains instead of the large losses.I underestimated the weakness of the near term resistance,but hindsight is a wonderful thing.Can't get right everytime.
Unfortunately(getting back to the subject in hand)the losses are not tax deductable.
Good luck
Cheers
Tel

Simple comme bonjour
 

axthree

Active member
185 0
Interesting thread.
I SB myself but have been away for two weeks with no access to a 'puter.
Am I feeling sick!!
It strikes me that their is a war going on between the "Keep dubya in power" faction and reality.
I'll get the shorting hat on 'cause I think that reality is going to rear its ugly head before year's end.:devilish:
 

Calvin

Junior member
30 0
:(
Hey Frog - I'm still stuck in the same sell positions I had a week and a half ago! As things stand I'm -203 on Dow and -124 on Dax. This has wrecked my usual daily trading strategy, which was (more by luck than judgement) going OK.

A big factor in getting myself into this pickle was that I decided not to place stops, since I'd been stopped out quite a lot recently when there were good gains just around the corner. So much for that theory...!

I'm now torn between closing the positions to enable me to start trading from a clean slate, or else stick with them and hope that Axthree's prediction of a downturn in the indices turns out to be prescient.

You seem to be going well, apart from the recent blip. This is illustrating to me that there is a certain skill to reading the markets that I so far lack. I'm going on a day seminar next month to try to brush up my skills in this area a bit - I'm a bit sceptical about seminars, by and large, but I've been recommended this one by someone I trust. I'm not expecting too much from it, just to gain a better handle on reading market indicators.

Hope you go well today.

Calvin.
 

axthree

Active member
185 0
I did say before years end and thats a long way out. Ample time for those in power to boil,stir fry, roast, or saute the books several times over. :).
Beware of letting a small loss become a large one.
It all goes to show that we're on our own at the keyboard.
I also have been stopped out on occasion, only to see a BIG retracement shortly afterwards.
FWIW, The biggest drawdown I have experienced was 50%. That made my eyes water and took forever to even start to recover. It was caused by riding some losses hoping they would come good.
In theory, if you have no S/L you could ride a loss for the duration of the contract period and hope :rolleyes:
 

Tubbs

Well-known member
261 2
Hey Calvin - I used to trade Covered Warrants & lost a few good grand on only about 3 trades. WIth these - like options - you have to live with time decay as well as the market. I can tell you that really physically hurts - it makes you feel really sick. Vowed I would never trade like that again. If I were you I would cut the losses every time - playing the hoping game should not be in your strategy. I know it's easier said than done - it's just safer in the long run.
 

smallpotatos

Junior member
17 1
calvin

I trade from the point of view that I never try to call the market. Its a mugs game and only leaves you nursing bigger and bigger losses as you say "surely it cant go any further" . Cut the positions and start again, and never go back and think 'if only' .
Take your positions for a reason , decide in advance at what point your reason is wrong and place your stops there. Dont move them. And always identify a profit target that is further away than your stop.
It is amazing how many traders will take a 10 point profit but will let a loss go for 100.

I use Capital Spreads becus not only are the spreads good but they also force me to place an immediate stop on my trades. I havn't had an argument yet with a stop activation..... although sometimes, of course, the stop is just at the wrong place !!
smallpotatos
 

frog

Junior member
49 2
Calvin,
Third day of the week and third loss;-78 yesterday and -10
today and what an 'orrible chart today an SB companies delight.
Getting back on subject,why spread bet?
I think it's an uncomplicated way to trade,small start up
requirement,possible huge tax free gains.
Downside;proprietory systems don't work too well,the SB
Cos are well ahead of the game and have much more info available to them than I could possibly imagine and I don't believe they are any "trickier" than the professional brokers.We are all in this to make money after all.
I would advise absolute simplicity.I don't use live feeds as mostly I'm sleeping during the action.Bigcharts is all I use
candles,5 min chart and their price channel facility to set my S and R points and longer time frames for the bigger picture.It's all free and wonderfully simple.I think you can trade longer term but I'll stick to the day to day stuff that way nothing can come up from behind and bite my bum.If I'm peeking during the day I occasionally forego the S/L facility,for I also hate being stopped out,but I do use a strict mental stop which I do my best to adhere to.Not that easy though is it?
Bonne chance
Ciao
Tel

Simple comme bonjour
 

smallpotatos

Junior member
17 1
frog

I actually visited one of the SB companies a while ago it is amazing how little info they have. Each trader runs 100's of markets and has no real chart / technicals on any of them. All they seemed to be worried about was the overall market position. The salesguy who showed us round said that in fact the clients generally had more info on each particular market as they concentrated on one or two whereas his traders could only react to the trades as they came in. And they didnt have time to look at corporate results etc... in fact the only figures that they were normally aware of would be the big economic numbers from the USA.
sobering thought that all this information doesnt seem to help most people at all !!!

smallpotatos
 

frog

Junior member
49 2
smallpotatos said:
frog

I actually visited one of the SB companies a while ago it is amazing how little info they have. Each trader runs 100's of markets and has no real chart / technicals on any of them. All they seemed to be worried about was the overall market position. The salesguy who showed us round said that in fact the clients generally had more info on each particular market as they concentrated on one or two whereas his traders could only react to the trades as they came in. And they didnt have time to look at corporate results etc... in fact the only figures that they were normally aware of would be the big economic numbers from the USA.
sobering thought that all this information doesnt seem to help most people at all !!!

smallpotatos
Thanks for that "petites patates" I had obviously assumed wrongly which leads me strongly to believe that their only advantage then is the spread bias.I try and use this bias to gain direction.
Interesting what you say as it seems everything hinges around price action which if you can interpret it quickly is a great way to anticipate the market.Surely the people they employ must have some good grounding in reading the prices?
Don't suppose they gave too many secrets away.I would love to know how they keep one step ahead,it just can't be as easy as keeping the lower end of the spread level or slightly ahead of the actual market price can it?
Cheers
Tel

Simple comme bonjour
 

frog

Junior member
49 2
Hi again,Calvin
Seeing as I didn't really answer your previous question I thought that I'd better.Unfortunately there is no easy solution and I would only agree with others that maybe you should cut your losses.There is always a chance the market will reverse in your favour but as previously mentioned hope has no part in any trading strategy.It's hard but has to be done(just look at my recent losses-ouch!)Remember if you take a position have an in and out policy and stick with it.
It pays dividends in the long run.
Off topic but an illustration of keeping it simple.I have just looked at Bigcharts daily candlestick chart for the dow over the last 3 months and deduced that up days and down days are approx 50/50 with a few flat days in between.
I have run my last 9 trades through a 50/50 system ie you either elect to go long everyday or go short.I have removed all stop losses as these would be retrospective and came up with the following figures:
Long only; Gains 471 points
Losses 159
Total +312

Short only;Gains 73
Losses562
Total -489

My trading without stop losses;
Gains 529
Losses 70
Total +459

My actual trading;
Gains 519
Losses 193
Total +326

Conclusion;if you can pick the direction of the near term trend you're quids in.With hindsight the recent 9 days have had an upward tendency and no I can't do predictions.
Further and of possible great use to me is that I shall now parallel paper trade without S/Ls as the figures above speak for themselves.
Even if should I suffer a huge spike chances are there will be a redress of prices and as I use futures only I can always carry a position over and await a more favourable price.There is 120 point benefit above from not using S/Ls how many big spikes do we get?Will keep an eye on this.
Sorry to go on
Catch you later
Salut
Tel

Simple comme bonjour
 

frog

Junior member
49 2
I apologise for being off topic yet again but could someone please explain to me the significance of the little golden stars like what you use to get at school(but not for grammar obviously).
Why do some have none,some a few and others a whole bunch?
Thanks
Tel
 

frog

Junior member
49 2
Good morning Calvin,
I have apparently given contradictory advice in my last but one post.Advising you on the one hand to cut your losses,
then saying that I'm looking at doing without them(stop losses).
But what do I know?Somehow there is a way to apply them wisely or wisely do without them.
I'll follow up on that after a few more days have elapsed and I've hopefully had occasion to trade with and without.
Hope that makes sense.It's been a long shift and it's nearly
home time.
Yippee!!!
Cheers
Tel

ps If I have another down day today that will be 4 in a row
so no ruby for me tonight.What a $h1t.
 

Calvin

Junior member
30 0
Morning (just!),

Thanks to everyone for the sound advice. I think on balance I'm going to close my positions - which I can guarantee will be immediately followed by the Dow and Dax going into freefall, so be ready to go short!!!

A lesson learned - before I regarded stops as a hinderance to my brilliant trading instincts, now I look at them longingly as a vey handy ejector-seat to limit the damage caused by my myopic fumblings...!

As it's Friday, I'm off to the pub in a bit, so with a bit of dutch courage inside me, maybe I'll find the inner strength to hit that buy button and put my ailing positions out of their misery. You have to laugh though :rolleyes:

Calvin.

ps - Not sure what the stars are - is it like McDonald's? Quite right that I haven't got any though...
 

frog

Junior member
49 2
Calvin said:
Morning (just!),

Thanks to everyone for the sound advice. I think on balance I'm going to close my positions - which I can guarantee will be immediately followed by the Dow and Dax going into freefall, so be ready to go short!!!

A lesson learned - before I regarded stops as a hinderance to my brilliant trading instincts, now I look at them longingly as a vey handy ejector-seat to limit the damage caused by my myopic fumblings...!

As it's Friday, I'm off to the pub in a bit, so with a bit of dutch courage inside me, maybe I'll find the inner strength to hit that buy button and put my ailing positions out of their misery. You have to laugh though :rolleyes:

Calvin.

ps - Not sure what the stars are - is it like McDonald's? Quite right that I haven't got any though...
Hello Calvin,
Don't bank on it.I've been short all week and fat lot of good it's done me.
Seem really stuck between 10200 and 10060,but only small moves on any given day.
Absolute rubbish for me this week.
Maybe when you have a lot of stars they give you a pack of crayons and a drawing book.
If I don't get back to you later have a good weekend and good luck.
I do miss a good night down the pub a few pints of good bitter-something flavoursome like
Hook Norton-never mind a heavily chilled bottle of local rosé at 2.5euros a go will have to suffice(approx 1.65 of your English pounds).
Sorry I'm off topic-I promise to get a grip soon-honest.
Ciao for now
Tel

Simple comme bonjour
 
 
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