A scalper stopped...

[Strobe]

Hello to all - my first post.

I spent six months trading forex on demo in advance of opening an account with a spread betting firm offering zero spreads on certain instruments. I started about a month ago and in my first month made c£5k scalping 1,2 or 3 pips a trade. After a conversation with the company's desk all my trades are now being referred which, as I'm sure you all know effectively kills my edge.

I am not surprised by this, although I thought I'd have a longer run!

Is there anyone here who has overcome these problems? At the moment I see no future for me in spread betting given what has happened and am now looking at ecn brokers which will mean paying a spread etc.

Any thoughts or suggestions gratefully received!

Cheers

 

[DashRiprock]

scalp the futures on inside prices innit

but actually mate if your effectively trading on the mid with every execution, do you actually have a strategy to make money when you can't? earning a few pips on 0 spreads doesnt sound like something that will translate to the real world :/

 

[Doomberg]

I take it you were using Worldspreads? Just go to a firm where you pay the spread of 1pip

In my opinion you can still scalp this, i often scalp out of hours forex at 2pips spread, its a lot
more risky but can still be done, good luck and keep us posted mate

 

[nunrgguy]

I take it you were using Worldspreads? Just go to a firm where you pay the spread of 1pip

In my opinion you can still scalp this, i often scalp out of hours forex at 2pips spread, its a lot
more risky but can still be done, good luck and keep us posted mate

As said go to where the spread is 1 pip. I assume your stop is in the 7-8 pip region? If you are pretty certain with your edge of 3 pips have you looked at taking 2/3 of your position off at +3 and letting the rest ride? It looks less like picking that way.

 

[Pipsaholic]

Whats the firm your with? Also, do they have any slippage?

 

[Doomberg]

The best SB firm is IG index imo, never had an issue with slippage

 

[hoodoo man]

Is there anyone here who has overcome these problems?

Yes - all of us who are net profitable in our trading accounts have overcome transaction costs. Commissions, spread, slippage, the vig, market friction, errors, and just plain getting it wrong are all costs which exist in this business and must be overcome to achieve success.

At the moment I see no future for me in spread betting given what has happened and am now looking at ecn brokers which will mean paying a spread etc.

Any thoughts or suggestions gratefully received!

In an artificial environment where one has no transactions costs to pay, the barrier to profits is lower. This does not mean that you will be successful in a market environment where you incur dealing costs.

Consider the case of locals - exchange members who trade on the floor. These traders make a market, buying at the bid and selling at the offer - therefore no spread to pay, unless trading at another traders bid or offer. Overall this nets out to either zero spread or earning the spread. Further, there are no rates to pay on trades which are scratched. This can be a huge edge in itself.

Essentially you have found some success exploiting an edge which is not available to screen based traders dealing through a broker or ECN. It is an artificial offer by the spread betting firm as a loss leader, and therefore they will not let you profit long term from it.

You have a few options:
- open outcry trading - buy or lease a seat, trade on the exchange floor
- exchange membership and / or good clearing rates through a prop firm
- normal transaction costs, but develop a trading strategy which can overcome these
- accept your edge no longer exists and do something else

The possible fifth option is to jack away your money paying spread and costs when you are little better than a breakeven trader. Not recommended.

 

[Strobe]

Thanks to all for your input.

I suppose the short version of this is yes, I have spent a while developing a trading style with little/no future and now I need to essentially, start again.

Good luck to all and thanks again.

Cheers

 

[neil]

Thanks to all for your input.

I suppose the short version of this is yes, I have spent a while developing a trading style with little/no future and now I need to essentially, start again.

Good luck to all and thanks again.

Cheers

Thats NOT what they said. Try Interactive Brokers UK, they are a broker with small spreads used by many traders here and in the USA. Look at the Mr Charts thread - I think he uses IB but not sure who supplies his charting package. Read the IB thread and you will see many Day Traders use them for scalping and other types of trading methods.

 

[theroguetrader]

Thanks to all for your input.

I suppose the short version of this is yes, I have spent a while developing a trading style with little/no future and now I need to essentially, start again.

Good luck to all and thanks again.

Cheers

DONT give up mate - tradings ALL about RISK/REWARD ratios - THATS ALL ... !!


" whether you think you can, or whether you think you cant - your right " ... !! :idea:

(Henry Ford)

 

[theroguetrader]

This canard again?

back to my nintendo :|