SB on Stock Indices

CarpeUK · Jul 29, 2004

Ok so far I have been reading lots and lots about forex trading
but I was given a tip today for the FTSE100 so I decided to go
with it using my virtual account on www.tradindex.com

The guy who gave me the tip would not tell me how he works his
strategy (I can understand)

I was wondering about spread betting on the Indices
FTSE100, DJ, NASDAQ, SP500 etc seems like something I would be
interested in learning, at the moment the FOREX market i am finding a little difficult as i am so new to SB & the markets.

To start with is there a simple strategy that I can follow (a step by step guide if you like) to help
me get used to spread betting on the indices or am I wasting my time because there is no such thing.

Also the tip I had today (hope i am aloud to enter this) FTSE 100 4370 long stop loss 4350 and so far it is doing well. 30+ points the last time I looked

Any help will be appreciated
Thanks

Dave1971 · Jul 29, 2004

CarpeUK said:
To start with is there a simple strategy that I can follow (a step by step guide if you like) to help
me get used to spread betting on the indices or am I wasting my time because there is no such thing.

There is a thread on this site about a dow jones day trading strategy that was started many months ago based on a strategy developed by Chartman I think. It is based on a 100 EMA ( exponential Moving Average). It is in a word document and is pretty comprehensive, if you can't find it let me know and I'll see if I can remember where I saw it.

Dave1971 · Jul 29, 2004

Found it, it's in First Steps, under ' Trading the Dow jones Strategy'

stevet · Jul 29, 2004

all tips have a 50/50 chance of success - except those you put money on!

bit like trading systems!!

CarpeUK · Jul 29, 2004

Dave1971 said:
Found it, it's in First Steps, under ' Trading the Dow jones Strategy'

Thanks Dave i will read it and see how I go.

CarpeUK · Jul 29, 2004

stevet said:
all tips have a 50/50 chance of success - except those you put money on!

bit like trading systems!!

I do not want to rely on tips form others, I want to be able to work with a strategy and as I am new to all this I am trying to find the easiest to start with then move onto more complicated strategies

stevet · Jul 29, 2004

what does "easiest" mean?

do you mean something easy to understand and easy to do - that makes money

CarpeUK · Jul 29, 2004

stevet said:
what does "easiest" mean?

do you mean something easy to understand and easy to do - that makes money

Yes easy or less complex. I understand with trading there are no guarantees but I am looking for a simple trading strategy to follow then I hope to move onto systems that are more complex. I will only be trading with virtual account until I become 100% confident with what I am doing.

also the more i look around the forum the more i am becoming confused because i do not know how many different ways there are to trade. i have read up on Forex & SB but i do not know anytthing about the rest. I would like to make a living out of trading but dont know where to start. I know SB is very risky but what other types of trading can i do that is stable compared to SB

stevet · Jul 29, 2004

ok - i only know the staring at a screen - day in day out method - for a year or two -and then build on that for another few years until you can call yourself a successful trader - but if you find an easy route that works - would be great if you let me know as well

but if anyone offers you an easy route - but wants you to pay for it - be that training or a system - bear in mind that that person is unsuccessful at trading and makes their money by providing that service or product

CarpeUK · Jul 29, 2004

stevet said:
ok - i only know the staring at a screen - day in day out method - for a year or two -and then build on that for another few years until you can call yourself a successful trader - but if you find an easy route that works - would be great if you let me know as well

but if anyone offers you an easy route - but wants you to pay for it - be that training or a system - bear in mind that that person is unsuccessful at trading and makes their money by providing that service or product

I have seen few companies about offereing there systems for a lot of money. I totaly understand the staring at a screen for 6 hours a day trying to learn, thats what i am doing at the moment but i am having trouble seeing the wood through the trees as they say. The question i have to anyone on this site is besides SB as that is very risky what others ways can you trade that is stable compared to SB

stevet · Jul 29, 2004

you can trade futures and stocks through a broker - electronically or by phone - and its not that SB is risky - just that its another level of difficulty on top of trading via for example - a broker who offers electronic access to trade markets

Racer · Jul 29, 2004

Easy way to start..

Look at support/resistance areas.. over several time frames from intraday to several years

CarpeUK · Jul 30, 2004

Racer said:
Easy way to start..

Look at support/resistance areas.. over several time frames from intraday to several years

Racer what do you mean?

Racer · Jul 30, 2004

Look at Dow for last 10 years, see where major reversals happened, draw horizontal lines, then look at where you can draw more horizontal lines. Change the time frame, draw more horizontal lines... go to week charts... do the same, go to intraday... do the same..

Splitlink · Jul 31, 2004

CarpeUK said:
I have seen few companies about offereing there systems for a lot of money. I totaly understand the staring at a screen for 6 hours a day trying to learn, thats what i am doing at the moment but i am having trouble seeing the wood through the trees as they say. The question i have to anyone on this site is besides SB as that is very risky what others ways can you trade that is stable compared to SB

On trading with SB you can risk less when trading overnight. Successful day trading is the dream of most traders but overnight trading is the only way to make money for most of us, especially with SB. The spread is too wide to make day trading worthwhile.. Trading overnight with a broker means increased margin and, because of the minimum is 10 GBP per point,
a gap opening against the trader can be a crippler. I went over to IB two years ago to become a day trader. I, reluctantly, had to give up on the grounds that I am no good at it. I am back with SB, now, and my trades are open, sometimes, for three or four days on index trading, weeks, sometimes, for share trading.

The SB bias is the moan of most of us. It swings from one end to the other and means that , if you get it wrong you will have the full SB spread loss to add to your calculated stop loss. Get a couple of those in a day and you have to have a good win to just stay in one place. The other problem is that day trading turns you into a person tied to a monitor. IB taught me that I wanted to employ my time better.

Split

AlexAndrews · Jul 31, 2004

I would echo the points Split makes in his post. I spent a fortnight a couple of years ago spreadbetting the DOW, and, because of the buy/sell spread, I wouldn't take a position unless I had a target move of at least 50 points. I was generally only doing £2/point, but I still managed to trun a pretty good profit. I guess my advice would be not to try and trade every move, just the meaningful ones.

Alex

CarpeUK · Aug 1, 2004

AlexAndrews said:
I would echo the points Split makes in his post. I spent a fortnight a couple of years ago spreadbetting the DOW, and, because of the buy/sell spread, I wouldn't take a position unless I had a target move of at least 50 points. I was generally only doing £2/point, but I still managed to trun a pretty good profit. I guess my advice would be not to try and trade every move, just the meaningful ones.

Alex

Thanks Alex but that is the problem i dont know any strategy's to track any good moves so if you know any good strategy's then please let me now.

AlexAndrews · Aug 2, 2004

Trading Strategy

CarpeUK said:
Thanks Alex but that is the problem i dont know any strategy's to track any good moves so if you know any good strategy's then please let me now.

The strategy I employed was one based heavily on that advocated by SignalWatch (which used to send out free T.A. on the main US indexes each day, but I don't think does any more) and is similar to one outlined by an earlier poster. Specifically, I would trade break-outs from well-established consolidations, primarily in the DOW. Although very simple, it actually requires quite a lot of discipline, and I would also recommend studying the movement and behaviour of such break-outs for some time prior to trading them in order to reduce the chance of being caught in a fake move - there are definitely a few little tricks to be aware of. Although I haven't traded for some time, I would still put my confidence in this system. Generally speaking, when it comes to short-term trading based on T.A. I am a strong advocate of KISS.

Hope that is of some help.

Alex

AlexAndrews · Aug 6, 2004

FWIW, the DOW currently appears to be completing a descending triangle formation (look at the 5-minute chart). If it breaks down through the base (at ~9860), it should continue down to the 9810 level. This is not advice to go short, but should be an interesting exercise into the validity of this formation.

Alex

AlexAndrews · Aug 6, 2004

And there we go, it's hitting 9809 as I write. Personally, if I had been trading the move, I would have closed the short when it first hit 9820.

Now 9805.

Alex

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