Spread betting

[Edinburgh Bear]

I am new to Spreadbetting and opened an account with a SB firm. Doesn't matter who at this stage
Recently I have set stop losses and found myself getting knocked out, even though the market didn't touch my stoploss.
Is this usual.
On one occassion my stop loss on the dow was 5 pts below where the market was!
Is there a good reason for this, or should I consider changing companies?

(hope this makes sense!)

PS I'm doing daily cash bets on the dow

 

[kevinmcm]

I am new to Spreadbetting and opened an account with a SB firm. Doesn't matter who at this stage
Recently I have set stop losses and found myself getting knocked out, even though the market didn't touch my stoploss.
Is this usual.
On one occassion my stop loss on the dow was 5 pts below where the market was!
Is there a good reason for this, or should I consider changing companies?

Phone and ask them to explain. I would hazard a guess that you are talking about deal4free?

When was your stop hit. In or out of market hours?

 

[Edinburgh Bear]

Phone and ask them to explain. I would hazard a guess that you are talking about deal4free?

When was your stop hit. In or out of market hours?

I only trade in hours.
To be honest it's just really annoying. The stops were calculated right, but I was stopped out anyway!
I guess in future I could just set the stop a few points below where it should be!

FYI. It wasn't deal4free!

 

[kevinmcm]

I dont follow what you mean. If the price did not reach your stop how could you have been stopped out?Dont be afraid to challenge these things. If the money should be in your account, phone and ask for an explanation. You will find customer services at Fins and Cap Spreads helpful.

 

[geraldpeters]

Market Price or SB company's price?

I only trade in hours.
To be honest it's just really annoying. The stops were calculated right, but I was stopped out anyway!
I guess in future I could just set the stop a few points below where it should be!

FYI. It wasn't deal4free!

I may be confused(it wouldn't be the first time!), but perhaps what you have experienced is due to the fact that some of the SB companies allow you to set your stop order based on the underlying market price or their screen price.

Gerry

 

[Bluewave]

Gerry is correct - most SB companies allow stop losses set at either the market price or their own price.

But quite honestly, using a 5 point SL on the DOW, whether cash or Futures is just asking for trouble. The Dow moves fast and SB futures prices especially swing from one extreme to the other. Using such tight stop losses, as FetteredChinos (and me) will testify to, will lose you a lot of money very quickly.

As a beginner, if you're determined to stay trading the Dow, I'd suggest looking for the start of early trends and jump in then with a "loose stop" of 100-200 points. If the direction is confirmed and you start making a profit, then gradually trail the price with your stop, until it reaches the breakeven point, i.e. if the market suddenly turns around and hits your stop you'll come out of the trade flat.

If you're able to watch the Dow daily, then it's maybe best to just set a SL in your head, and/or mark it on your chart only. This takes discipline to stick it to when hit, though!

But Kevinmcm is right, if you think a mistake has been made with your SL being triggered, have a chat with your company's Customer Services.

 

[Edinburgh Bear]

Gerry is correct - most SB companies allow stop losses set at either the market price or their own price.

But quite honestly, using a 5 point SL on the DOW, whether cash or Futures is just asking for trouble. The Dow moves fast and SB futures prices especially swing from one extreme to the other. Using such tight stop losses, as FetteredChinos (and me) will testify to, will lose you a lot of money very quickly.

As a beginner, if you're determined to stay trading the Dow, I'd suggest looking for the start of early trends and jump in then with a "loose stop" of 100-200 points. If the direction is confirmed and you start making a profit, then gradually trail the price with your stop, until it reaches the breakeven point, i.e. if the market suddenly turns around and hits your stop you'll come out of the trade flat.

If you're able to watch the Dow daily, then it's maybe best to just set a SL in your head, and/or mark it on your chart only. This takes discipline to stick it to when hit, though!

But Kevinmcm is right, if you think a mistake has been made with your SL being triggered, have a chat with your company's Customer Services.

Sorry. I don't think I've explained properly!
I don't use a Stop of just 5 pts, it's the fact that my stop loss is sometimes hit, even though the market doesn't touch it
In other word the SB company are pricing their daily Dow differently to the market.
Any suggestions on how I can combat this?
My bets are so small that I'm not suggesting it's worth delibrately stopping me out!
It's just I don't really get why the SB price varies from the market price.
I can understand a June expiry differing, but a daily bet

 

[LevII]

Have a look at this, it may assist. http://www.trade2win.com/boards/sho...1864#post161864

 

[barjon]

EB

As far as I know SB companies do not establish their prices directly from the market index but via an algorythm from the futures. This often results in a bias in their prices, one way or the other, when compared to the actual market index.

Unless your SB allows you to set your stop against the market index (when you would have to accept whatever price the SB were quoting at the time) you just have to live with it. You are not trading the DOW, you are trading the SB company's own "DOW index" which is not the same.

good trading

jon

 

[DaveJB]

The price that counts is the one the SB companies are quoting as their spread - the DOW right now is at 10447 for example, my SB company quotes 10444-8, if your stop were 5pts under the market at 10442 based on the 'real price' then there's only 2c between your stop and the bid price they're quoting... it isn't the market itself that has to touch the stop, it's the relevant bid (for a long trade) or ask (short trades) the SB company quotes.

5 pts stop loss below the DOW using the prices I've quoted here would be a stop set at 10439... 5pts below the SB quote of 10444 for longs, 5pts stop if I went short would be 10453... the 10448 quote plus 5 pts.

You have to allow for the spread prices!

Dave

 

[Splitlink]

I am new to Spreadbetting and opened an account with a SB firm. Doesn't matter who at this stage
Recently I have set stop losses and found myself getting knocked out, even though the market didn't touch my stoploss.
Is this usual.
On one occassion my stop loss on the dow was 5 pts below where the market was!
Is there a good reason for this, or should I consider changing companies?

(hope this makes sense!)

PS I'm doing daily cash bets on the dow

I don't trade the Dow but I've heard about it and I suggest that, when you are within 5 points of a stop you can, practically, say goodbye to your trade, especially if you started off with a 200 point
stop in the first place. I know what you mean, though, you do not agree with your SB's quote.
There is only one solution to start with. Ring them up and find out how they explain their action.
SBs have a few warts that we have to accept in return for budget trading and no tax on winnings.
I have, lately, found them to be improving. Maybe it's the increased competition.

FS are very close to my independant quote and I find them acceptable (I trade FT) but, two days ago when I wanted to close a trade they had technical problems just at that moment. Not only that, I wasn't sure whether my trade had gone through, so tabbed over to my account, which seems to take their Java a long time to do. Result? My trade was still open, so I tabbed back to trade,again and this time closed successfully. I was lucky- I lost 2 points more than I would have, but it could have been much worse.

Split

 

[gem11]

What does spread betting mean, btw.
Thanks

 

[neil]

Use the "Search" facility

What does spread betting mean, btw.
Thanks

Look under "Knowledge" and "Resources" at top of page.