I thought I understood but now I dont, help please

[happyhappyhappy]

I have been looking at spread betting and tried the demo account once with Capital Spreads which I thought was a good way to learn but it did not go too well. I have now been offered the chance to try it again so as I am interested in spread betting I thought good idea, but after looking at the prices they show I am put off.

I understand about spread betting, the spread on the price, how the price will differ slightly from the actual price on the market and most of the other bits, i.e. I have a fairly good understanding in general about it I feel. I also feel I am fairly good at picking what the stocks and indices will do as much as one can be.

What I am having a problem with is this, the price of the FTSE on the market is just over the 6000 mark at present and I am interested in spread betting on the FTSE but although I understand your prices may be slightly different, they are showing FTSE Index rolling daily 6023 -6029 and FTSE Index Dec 6048 - 6054 which are way different to the market price. I feel this is too far away from the real prices and thus does not give me any confidence to buy and sell through spread betting, i.e. If the market moves up for example, with the different prices it shows it may be entirely different in what happens.

I understand that spread betting is a little like gambling, but I feel that when I buy and sell shares it is a calculated gamble that often has a good chance of following the prediction, but with these prices I feel I would be much more hard pushed to calculate the move unless it was significant enough to pull everything up or down.

I think I understand it all but I appreciate I have a lot to learn and someone may be able to pull my analogy apart.

I would be really grateful if someone would comment on the above and maybe put me straight on any part I have got totally wrong.

Obviously what I would like is to see the spread betting prices mimicking the market prices as close as possible but the bit mentioned above seems to differ too much for my liking.

Any help appreciated.

 

[bracke]

happyhappyhappy

I think that you will find that the FTSE 100 Rolling Daily is close to the FTSE 100 Future - Liffe Market.

I suggest that you re-post your question on the Capital Spreads thread and get the answer from the 'horses mouth'.

Regards

bracke

 

[damianoakley]

Hi Happy,

If you have been quoted on a spreadbet FTSE price today, then you have to bear in mind that today is Sunday - the official market is closed, so the spreadbet companies will make up their own quote based numerous variables.

If you checked the spreadbet FTSE value at 8:05am on Monday, then it should better reflect the underlying market price.



Thanks

Damian

 

[Pat494]

As bracke says the rolling price is closer to the daily future price normally, which is related to the future price offered.. You will find that the daily cash price is usually bracketing the real price, Take note of any difference though imho it is significant. After all they ARE putting their money where their price is - if you see what I mean and they are experts. Have to be or they would be broke.

 

[Lightning McQueen]

Hello happy

Dont forget that on the CS demo the chart will be delayed by 15 min and other data feeds you have may not be the same at all times remember in spreadbetting its "their" price, they are making the market you are trying to trade.

have you a trading plan yet?

have you written a strategy and tested it?

do you keep a journal of your efforts?

these things will help im sure, they are helping me to move forward.
search this site plenty to help on here regarding plans, strategy development and journals

regards

don

 

[Splitlink]

I have been looking at spread betting and tried the demo account once with Capital Spreads which I thought was a good way to learn but it did not go too well. I have now been offered the chance to try it again so as I am interested in spread betting I thought good idea, but after looking at the prices they show I am put off.

I understand about spread betting, the spread on the price, how the price will differ slightly from the actual price on the market and most of the other bits, i.e. I have a fairly good understanding in general about it I feel. I also feel I am fairly good at picking what the stocks and indices will do as much as one can be.

What I am having a problem with is this, the price of the FTSE on the market is just over the 6000 mark at present and I am interested in spread betting on the FTSE but although I understand your prices may be slightly different, they are showing FTSE Index rolling daily 6023 -6029 and FTSE Index Dec 6048 - 6054 which are way different to the market price. I feel this is too far away from the real prices and thus does not give me any confidence to buy and sell through spread betting, i.e. If the market moves up for example, with the different prices it shows it may be entirely different in what happens.

I understand that spread betting is a little like gambling, but I feel that when I buy and sell shares it is a calculated gamble that often has a good chance of following the prediction, but with these prices I feel I would be much more hard pushed to calculate the move unless it was significant enough to pull everything up or down.

I think I understand it all but I appreciate I have a lot to learn and someone may be able to pull my analogy apart.

I would be really grateful if someone would comment on the above and maybe put me straight on any part I have got totally wrong.

Obviously what I would like is to see the spread betting prices mimicking the market prices as close as possible but the bit mentioned above seems to differ too much for my liking.

Any help appreciated.

Do you have time for "hand's on" trading? If so, try looking in on the chatroom from 0800 until any time up to the close. There are a few of us there who trade both the future, with a broker, which has a half point spread and others, of whom I am one, who trade rolling spreadbets. Mine is 2 points. I have found that when future traders and spreadbetters have the same entries and exits, there is little difference between the gains and the losses. Stops may be different. I do not have the same confidence with the SB companies and try to close manually, with a safety stop in case somethiing goes wrong.

You can always ask questions and they will try to help.

Does CS have a good real time chart service that you can watch at the same time? You'll need that to follow properly.

Good trading

Split

 

[the blades]

What I am having a problem with is this, the price of the FTSE on the market is just over the 6000 mark at present and I am interested in spread betting on the FTSE but although I understand your prices may be slightly different, they are showing FTSE Index rolling daily 6023 -6029 and FTSE Index Dec 6048 - 6054 which are way different to the market price. I feel this is too far away from the real prices and thus does not give me any confidence to buy and sell through spread betting, i.e. If the market moves up for example, with the different prices it shows it may be entirely different in what happens.

.

Hello HHH,

As touched on already, the December price includes the effect of interest and dividends.

The rolling price is again derived from the Futures price, but because it's adjueted for the above, it will be much nearer (but not the same as) the actual index during market hours.

All the best,
UTB

 

[capitalspreads]

happy happy

as your question is about the CS demo I feel that we may be able to answer it if you call us during market hours 07.00 - 21.15.

The problem may be as boring as that we have not got the right price on the demo (although we are quite good at this these days) because, much as the demo is a useful tool, it does naturally come below the importance of the main live system. The prices on the demo are live but the charts are 15 mins delayed.

The demo is really there so that clients can get to grips with the trading platform, the teminology ,what stops mean, how the order books work etc etc without making expensive mistakes. Although some clients do use it for 'paper trading' I am a great believer that trading experience is only gained when it means something. Demo account trading is never painful, you never have to make a hard decision or really, seriously, question your actions or intentions.

I realise that big institutions make huge back testing procedures (i.e paper trading on historical data) on their new programs. But in these instances it is just computers making the decisions not 'fallible' human beings. If anyone has a 'new' trading system I would recomend rigorous back testing with none of that "oh well of course I wouldnt have traded then" or "I ignored that trade signal because ...etc etc".

Simon

 

[Splitlink]

I have been looking at spread betting and tried the demo account once with Capital Spreads which I thought was a good way to learn but it did not go too well. I have now been offered the chance to try it again so as I am interested in spread betting I thought good idea, but after looking at the prices they show I am put off.

I understand about spread betting, the spread on the price, how the price will differ slightly from the actual price on the market and most of the other bits, i.e. I have a fairly good understanding in general about it I feel. I also feel I am fairly good at picking what the stocks and indices will do as much as one can be.

What I am having a problem with is this, the price of the FTSE on the market is just over the 6000 mark at present and I am interested in spread betting on the FTSE but although I understand your prices may be slightly different, they are showing FTSE Index rolling daily 6023 -6029 and FTSE Index Dec 6048 - 6054 which are way different to the market price. I feel this is too far away from the real prices and thus does not give me any confidence to buy and sell through spread betting, i.e. If the market moves up for example, with the different prices it shows it may be entirely different in what happens.

I understand that spread betting is a little like gambling, but I feel that when I buy and sell shares it is a calculated gamble that often has a good chance of following the prediction, but with these prices I feel I would be much more hard pushed to calculate the move unless it was significant enough to pull everything up or down.

I think I understand it all but I appreciate I have a lot to learn and someone may be able to pull my analogy apart.

I would be really grateful if someone would comment on the above and maybe put me straight on any part I have got totally wrong.

Obviously what I would like is to see the spread betting prices mimicking the market prices as close as possible but the bit mentioned above seems to differ too much for my liking.

Any help appreciated.

Glad to see you on the chatroom. I think I see where you are going with your questions. I know Finspreads, so let us deal with them. If you start with 100 pounds with them you will be able to trade with 50p (forgetting the introductory 1p for 6 weeks) and will be required to place 50 pounds margin. If you lose, you will be able to continue to trade as long as there is 50 pounds margin in the account. As soon as the account drops below that they will not open a trade with the FT index until you send more cash.

I advise starting with 100 pounds, certainly not more than 150 and trade at 50p per point until you get confidence. Watch your profit and loss, while you trade, and cut as near 5 or 6 pounds as possible- that would be around 12 points. Today I have cut two losses at around 9 points each, so it can be done and the money will last while you are learning.

Take what I have said about Fins and compare it the others. There will be a slight difference but that is up to you. The important thing is that you have access to real time charts. Fins has this-the others I don't know.

Split

 

[happyhappyhappy]

Thanks Splitlink for your perseverance with helping me despite my sometimes silly questions. I am hungry to get into this quickly, as I want to try and earn a living from it as soon as possible but I have a lot of common sense and will hold myself back enough to progress at a sensible rate rather than get carried away. As I have mentioned before I am reasonably successful with my strange methods in my normal share dealing, but because I do not have enough invested at this time, progress can be tortuously slow, thats where I hope spread betting will help.

I do fear the spread betting a little as you are constantly reminded about the fact you can lose more than you bet but I understand how it works and feel I will be able to control this with stops etc. I will probably take your advice and try Finspreads.

I think there are still some holes or weaknesses in my knowledge so I will continue to read and ask questions for a few more days to improve my understanding a little more before going for it and then I think a little experience will help me further.

So you may have to put up with me a little longer asking loads of questions.

 

[the blades]

I do fear the spread betting a little as you are constantly reminded about the fact you can lose more than you bet but I understand how it works and feel I will be able to control this with stops etc. I will probably take your advice and try Finspreads.

.

No need to worry here - just set your bet size equivalent to the ammount of shares you would have purchased if trading "conventionally".

So if you wanted to purchase 500 shares in company X, place a bet at £5 per point. Because of margin, you wont have to put up the same money as you would with conventional trading (hence being told you can lose more than you bet), and thus you'll be charged about 4.5% per year for the privelage. So stick the money you don't put up into a high interest account (offset your mortgage and get 5%?) and you're laughing.

UTB

 

[Splitlink]

Remember that I was talking about FT Rolling for day trading. That has 2 point spread. In my opinion, that and, perhaps American indices (which have 4 point spreads but are more volatile) is the only instrument that can be traded with a SB company- Shares are more suitable for holding over longer periods

Please, also remember that I am willing to advise you on everything except what to trade. That is entirely up to you and you must be careful and disciplined enough to close a losing trade.. If you do not,the warnings that you mention will come true, sooner or later. Do not trade Footsie or other index overnight because , although Rolling is closed at night, you cannot open or close the trade until next morning and it usually opens well away from the previous night's close.