How do you recover from a £25,000 loss....

[brettus]

The IG index low of 5430.7 occurred at 0100 hours GMT out of hours trading well before i opened my position. The actual dax30 after my trade was placed hit its day low of 5465.6 at around 3pm.

As you can see the comparison highs are similar, but the lows vary somewhat.
My information on the actual dax30 has come from the euroinvestor website
http://www.euroinvestor.co.uk/stock/chart.aspx?id=141128

I see the dax low of 5452.15 on yahoo finance. I honestly don't think much needs to be said really. You were lucky they closed out some of your position and you had a chance to run just £75 of it to make some back. You got stopped out during normal trading hours not out of hours, so even less chance they manipulated the price and from what i can see you got stopped out correctly.


This is how spreadbetting companies make money.

1) You make money, they put you on dealer referal and reject the bets that go in your favour immediately and accept ones that go against you immediately.

2) They close you down and say they don't want your business anymore, if you consistently make money.

3) They keep every loser that goes all in with their account on any single trade.

4) Most importantly. They just take the spread.

Most common mistake for the majority of punters that lose is they assume they are trying to screw them. Punters screw themselves. There is price manipulation, but generally out of hours. If someone comes on and buys £200 a point of dax out of hours, they will move their price up because they dont want anymore of and it also if anyone is looking to sell at a higher price they may well do so and take them out of the position, and they end up just take a bit of spread on the trade. For example some guy buys at £200 at 5000, so they move their price to 4995/5005, then some guy sells £200 at 4995. They take £1k, easy money. Is this price manipulation? Maybe, but there's no liquidity so there's not much you can do or say about it.

 

[tim3]

Thing a lot of people forget is that particularly during market hours if the sb's manipulate the price to much then they leave themselves wide open to people taking advantage and arbitrage oppertunities.

I agree most punters are able to screw themselves without help from the sb companys.

It amazes me how highly levearged some people are and the low margin requirements of some sb companys encourage this imo.

 

[counter_violent]

What amazes me is the fact that an instrument can have a daily range of say 50 - 400 points/ pips and yet everyone is still going on about a false / manipulated price taking a stop by say 3 pips It really is that comical.

 

[mrfigure]

I think its quite obvious that the sb companies have indeed pushed their own versions of the dax down, they are all lower than the main index lows, but the highs are very similar - wonder why ? Could it be that many traders were long ?....just like the traders, the sb companies see a profit ?

 

[dc2000]

I think its what happened to price once the trade was opened is now the discussion. I have taken responsibility - i didnt have to trade that day and if i didnt id still have 25 to trade with and we wouldnt be posting on this thread, iv no issues with that. It was just remarkable how literally once the account was cleaned out, price then resumed the predicted direction.

This is what happens in the market and more so at the moment large players need a good price to come back into stocks and this is what we have just had for get all the news about thin trading this was done for a reason and not by any SB company.

Sorry if I was a bit harsh with the gamble statement I was just trying to get across that given size vs account you had gone from toughtful trading to gambling and this is very easily done what caught you out was an irrational move which happens. consider what would happen if there had been a major event tsunami or 911 you could have ended up owing the SB company money

 

[brettus]

I think its quite obvious that the sb companies have indeed pushed their own versions of the dax down, they are all lower than the main index lows, but the highs are very similar - wonder why ? Could it be that many traders were long ?....just like the traders, the sb companies see a profit ?

What you on about? The dax futures fell by that much in the underlying market. It was nothing to do with the spread betting companies!!!! It was the market that screwed you. Some indices fall more than others. I noticed the S&P fell 24 handles around that time as well, so 160 tick movement in the dax is justified. Everything is pointing towards correct fill and poor money management.

Over night their dax price moves with the S&P futures. If the S&P futures move 1 tick they roughly move the dax up or down 1 tick.

 

[mrfigure]

So why isnt this difference evidenced in the highs ?

 

[brettus]

So why isnt this difference evidenced in the highs ?

It's the market that traded there, not the spreadbetting companies price. If i traded on a futures platform, i would have got stopped out at exactly the same price.

What do you mean? Why isn't this difference evidenced in the highs?

It seems like you're saying, how comes if eurusd is up 200 pips, gbpusd isnt up 200 pips? They are both dollar based pairs.

Just because a round cheese is round and the moon is round, it doesn't mean the moon is made out of cheese.

 

[dc2000]

Hi guys, look firstly thanks for all the replies, some people have been rather blunt but i wouldnt have it any other way, its a rough game so no time for treading on tip toes with comments. Shame its turned slightly into a bit of an argument but its all good im sure.
I will confirm the trade I opened. Iv recovered the details from my account as all trades are recorded of course. It was on the IG Index germany 30 - placed at 09:51 Tuesday 23rd August. The trade opened at 5596.8 £200 per point long. IG call it a DFB, which is daily forward bet. Someone mentioned earlier that it is not the exact dax30 but is IG's own version.
As previously stated, I was comfortable, (not particularly pleased) but comfortable when the trade began to go against me. For my own reasons I had confidence this particular market would rise and turn to profit for my account even if it meant holding the trade for a day or two. Unfortunately the price fell far beyond what I expected and cleaned my account out.
I have recovered the IG chart for the day in question and have also obtained the actual dax30 chart.
The IG HLOC is : H 5635.8 L 5430.7 O 5446.3 C 5620.1
The DAX30 is : H 5636.1 L 5465.6 O 5529.3 C 5532.4

The IG system partially closed my position @ 5498 by £125, meaning the running trade was now £75 per point long. They did this as my account was still positive but not sufficient to cover the deposit requirement for the trade. Price further dropped and I funded the account with a further £1,000 still confident the market would rise. Unfortunately price dropped further and I was taken out at 5459.3. After the trade was placed IG price went as low as 5452, then resumed the uptrend and beyond my entry point, returning profits of over £50,000.
The IG index low of 5430.7 occurred at 0100 hours GMT out of hours trading well before i opened my position. The actual dax30 after my trade was placed hit its day low of 5465.6 at around 3pm.

As you can see the comparison highs are similar, but the lows vary somewhat.
My information on the actual dax30 has come from the euroinvestor website
http://www.euroinvestor.co.uk/stock/chart.aspx?id=141128

you cant look at the cash price as SBs price is based on fair value of futures isnt it?
why did you have it as an up day ?

 

[mrfigure]

When the dax rose, so did the sb versions, i.e the germany 30. The highs were a pip apart in comparison. When it come to the lows of the day, the sb versions were into double figures difference. Why wasnt this the case with the highs ?

 

[brettus]

When the dax rose, so did the sb versions, i.e the germany 30. The highs were a pip apart in comparison. When it come to the lows of the day, the sb versions were into double figures difference. Why wasnt this the case with the highs ?

Check out yahoo finance. The lows on yahoo was 5452.15. I don't know where you're getting your lows from.
The lows from the spreadbetting company around this time was 5352.

i see 5454.73 on your website when you go to historical prices. They shouldn't be different to yahoo, but i don't know which one is wrong, but both are well below your stops and very close to the spreadbetting companies price.

 

[dc2000]

Check out yahoo finance. The lows on yahoo was 5452.15. I don't know where you're getting your lows from.

Yahoos quotes are not worked out the same as index quotes

 

[brettus]

Yahoos quotes are not worked out the same as index quotes

You're just telling me the spreadbetting companies use the futures to work out their cash price?

 

[Splitlink]

Yes of course il share more detail, glad i found the site really as i havnt really got it off my chest yet. Im 36 and are lucky i guess in that I have a reasonably well paid job so i will recover over time. I wouldnt have traded if i wasnt secure. I have been trading for around 3 years. At the start tho, I bought shares in oil companies, making a little, losing a little and never really getting anywhere. Now I am a day trader spread betting and rarely hold trades older than a day or two. When my account was £15,000 plus, I was opening positions from £50 per point, up to £500. Mainly if a trade made a few pips showing anything from a £1,000 profit I would take it and close the trade then wait for another short/long opportunity in any market, be it dax, wall street, s+p500, ftse, us light crude, sugar etc. The last trade i made was on the germany 30 on 23 august at 09.50 going long at £200 per point. I entered at 5596 with no stop loss. (criticism accepted, my choice). I knew that the index would drop(despite being an up day), but given that the price had recently found support following a nosedive in the german economy, the index had been showing strength previous days so had no issue with the trade showing an initial loss. my rationale was that there was sufficient funds in my account to cover this initial loss until price began to head in the direction my research suggested. Unfortunately the price fell to the point it wiped out my account. The frustrating thing is, once my account was taken out, price began to rise in the predicted price range and my account would now be showing a £55,000 + profit. It was as though, the sb company i used knew they were going to be paying out substantially on the bet and the price was pushed down. I was watching the chart live as it happened and couldnt believe how it was forcing down so much, especially without any sort of negative news. The only positive to come out of this, is i know where i went wrong and this will give me the confidence to come back.

There is something here that I do not understand. My dealer requires £80 margin for £1 pound stake on Rolling Dax. Therefore, your margin must have been £16000, which gives you £9000 which, at £200/point means that they they would stop you at a loss of 45 points. Did you have any credit with them for more money? You were trading with no stop. The price went to 5455 between 1400-1500, which is 140 points. Do you agree with that?

Is there anyone here telling me that SB companies are no good? In all kindness, you should not be loose with all that money and I would advise you to give trading up. To be frank, I am horrified at such lack of care with one's money.

 

[x4x]

When the dax rose, so did the sb versions, i.e the germany 30. The highs were a pip apart in comparison. When it come to the lows of the day, the sb versions were into double figures difference. Why wasnt this the case with the highs ?

It is a good question - IG don't lower themselves to get involved here at T2W - but you could ask PC from the CMC thread how they got their low price for that particular day - he's very helpful.

 

[dc2000]

You're just telling me the spreadbetting companies use the futures to work out their cash price?

yes does it not say in you T&C

 

[brettus]

There is something here that I do not understand. My dealer requires £80 margin for £1 pound stake on Rolling Dax. Therefore, your margin must have been £16000, which gives you £9000 which, at £200/point means that they they would stop you at a loss of 45 points. Did you have any credit with them for more money? You were trading with no stop. The price went to 5455 between 1400-1500, which is 140 points. Do you agree with that?

Is there anyone here telling me that SB companies are no good? In all kindness, you should not be loose with all that money and I would advise you to give trading up. To be frank, I am horrified at such lack of care with one's money.

Yea. It sounds a bit fishy. It's frustrating hearing about people throwing money at these companies, and they still think they know what they are doing! Calling themselves traders. Makes me sick!

 

[mrfigure]

Thanks for the advice split. Id rather think big and learn big, taking hits along the way than place £10 per point here and there. Its a big loss but the learning curve is tenfold than just learning from a £250 loss. I'll be back, and il get my money back

 

[brettus]

yes does it not say in you T&C

I know this. I see where you're coming from. There's no point even comparing the dax cash to the spreadbetting companies cash price. We need to compare the futures price plus the premium to the spreadbetting daily cash price. Either way it's proved that it's inline with the cash price even.

IG's dax price also moves up or down 0.89 points for every tick in the S&P overnight and finspreads moves up or down 1.1 points for every 1 tick movement in the S&P.

 

[brettus]

Thanks for the advice split. Id rather think big and learn big, taking hits along the way than place £10 per point here and there. Its a big loss but the learning curve is tenfold than just learning from a £250 loss. I'll be back, and il get my money back

Potentially the most stupid post right here. Play small and learn. Play big and lose your house. Welcome to 95% of traders, you'll be stuck their for a very very long time.