Spread Betting

[Bankbuster]

Davie,

Regarding the charts mentioned in my previous posting. It's usually necessary to minimise the browser menu bar and to resize and position the charts for a better fit in each window. The charts can be used to monitor the DOW in 3 different time frames or to simultaneously monitor tick and trin.

BB

 

[techMark]

Another point about tax and spreadbetting.

The IR may want to tax the profits of professional spreadbetters because they would like to see it as a business activity. Given that almost everyone looses, there must be professional spreadbetters who can use their losses to pay less tax.

Anyone thought of that or tried it?

 

[Do]

Excellent discussion everybody.

I too spreadbet along with three mates (all separately and independently). My problem, along with I know my three amigos, and I suspect some others who may be reading this thread and visiting this excellent website is ....

I don't really know what I,m doing!

There we are I've admitted it.

I have an account with CMC/D4F and I bet on the Dow cash. My 'trading screen' consists of the free Lycos Dow index, CMC trading site, and lately the T2W US chatroom along with CNBC.

I have not yet 'invested' in any trading software as it seems there are hundreds all promising the same thing and I want to keep costs down to the min for now.

At the moment my decisions are based on if its going up go long, if its going down go short. However with CMC and probably all the SB's their bias moves so much quicker than me and I get caught out very often.

There must be a better way.

I have been trading for twelve weeks every day and am currently down about £1500 betting between £1 and £10 per point.

I read with fascination in particular Chartmans analysis of the Dow (please keep up the good work) and in the chat room different peoples trades and positions and I get the impression that some people are consistently profitable at this. How?

I have gradually got better at trading primarily by cutting losses quickly (sometimes though too quick) and trying to let profits run.

At the beginning I did it the other way round. Fool.

I consider myself to be reasonably intelligent, quick to learn and level headed.

Is there any hope for me and I suspect others.

Softare that helps with buy and sell signals would be some help.

Anyway I hope this has been of some help to Daviegrant and his book.

All the best

Do

 

[ihickling]

Do - What sort of preparation do you do before trading?

Have you worked out your position sizing to control risk, small bets on high risk trades and have an entry point and exit point and stop loss point b4 entering the trade?

Reading Chartmans analysis is a daily for me although I do not trade the Dow every day. Also check the following web sites for daily commentary is advisable

http://www.signalwatch.com/signalwatch/markets/markets_dow.asp

Also look up Raptor research group.

These both give good commentary on key levels to watch possible entry/exit.

Nobody can give you an accurate guide to the where the Dow is going but by watching and waiting for high probability trades you will be better prepared.

In answer to "Is there any hope for me and I suspect others." most people learn to lose before they learn to win - Just my opinion.

Depends how serious you want to be about it or wether it is just a "flutter". If you are serious about it the remember the 4 P's - preparation prevents poor performance (it was actualy 5 in the services but swearing not allowed)!

PS: there may be days when your indicators do not support the trade and you have to sit on your hands - happened to me Friday and made 20 points of what should have been an easy 100+ day, but some of my indicators (MACD, TICK, TRIN) where all over the place and I decided it would have just been gambling for me to have enetered - others had different indicators and took advantage. Thats life and not trading is a valid position.

;-O))

 

[InDisguise]

Hi Do,

<i>I don't really know what I,m doing</i>

At least your honest!

Before you lose any more money I would suggest you invest in:
'Technical Analysis of Financial Markets' by JJ Murphy.

Absorb the principals of '<b>Trend/Support/Resistance.</b>

Then Chart Patterns.

This can form the basis of a strategy, then add an indicator or 2.
Don't go too mad with the indicators, use them to support price
movement.

Paper trade for a while and see how it goes.

<i>Software that helps with buy and sell signals would be some help.</i>

Yes, it does help but you have to understand why the signal has been generated. In the end it's your decision to enter on that signal.

Would you sell on a sell signal in a strong uptrend ?
Would you buy on a buy signal in a strong downtrend?

Keep it simple, I'll think you'll find Trend/Support/Resistance rules most situations.

For example I followed the Dow yesterday using signalling software which gave 5 sell signals using 1 indicator! and no buys?????

Would you have sold?

Oooops nearly forgot, use a stop loss. Money management is
key too.


HTH


ID

 

[orchard]

I am new to spreadbetting and, if anyone had followed my trades but done the opposite, they would have been very rich by now. I have now got the hang of it and have almost recouped my losses.I am with Finspreads at them moment, mainly because of the small stakes and the ease of internet trading,(I am only able to trade early morning at the moment) but I have contacted IG Index via E-mail, so far with no response. I now wish to 'tip my toe' into the indices market, either DOW daily cash or futures (if only I knew the difference between 'cash' and 'futures' (where does the cash figure come from?). I would be most interested to hear from people who have traded in this market with any success. I sat at my computer for 45 minutres one night and my imaginary trade netted me £185. Is this an abnorbility? This is all new to me, so any imput would be most welcome.

 

[orchard]

Spreadbetting

Serious traders do not spreadbet

Serious traders probably had lot of cash to spread around!

 

[Hughmac]

Do Hi

you could have a look at First4Futures.com Their software may help (at a price) and the data is integrated (dosnt require seperate data feed).

Just remember that it wont be 100% correct every time but having trialed it for a week it certainly gave good results o/all

cheers

Hugh

 

[ChartMan]

A lot of good points here guys.
Suggestions:
1. Stop trading for a week or two.
2. "paper trade", BUT use the real price offered by CMC/Fins. ie do the trade, but don't hit the buy sell button- easier with fins as you get the real price first....paper trading using the screen price is just conning yourself. IT WONT WORK IN PRACTICE.
3. Go back through the archives here on DOW intraday and study them till you're sick of seeing charts.
4. Learn the signals and clues that lead to breakouts/breakdowns.
5. Just trade those breakouts.Forget "it looks like it's going up/down" - that's a 50/50 situation.
6. Don't trade if the price is near to the 100MA.
7. Practice sitting on your hands for 3 or four hours!!!
8. You have to bite the bullit and invest in AIQ/Sierra charts etc. This is essential and will only cost $90 a month at most.This will be repaid with just 1 half decent trade per month.
9. Reduce your bet size. Reduce it further if you are not 100% certain of a winning trade.
10. Never chase your ass, looking to make up for the loss that you made earlier.
11. As a guide, you should never bet more than 0.5% of your capital
12. Cut the bad trade immediately and learn how to maximise the winners- study the charts......

Great ideas- VERY hard to implement. Trust me. Psychology demands that you are better than the system and you can beat it- just like a gambler. Resolve this issue and you will start to win. Yesterday's meeting at Solihul had a great session on psychology presented by Helen. No 1 problem is admitting to yourself that you are not getting it right and accepting that.. No 2 problem is implementing a strategy to overcome that.
On last thing on psychology. Your descision is absolutely right at the time you make it ( we hope). Unfortunately the market decides to do something else. THIS IS NOT YOUR FAULT. It WILL be your fault if you don't /can't recognise that fact and immediately close the move against you. Don't think "It'll turn round in a minute". You didn't make a bad descision. The market just didn't agree with you and you mustn't get into a battle over that.
I hope this helps some of you guys that are struggling. If you can get into the chat room, you will get the support from us all,but we can't trade for you. At best, we can suggest that a particular move may not be a good idea. You can also eaves drop on our analysis of any particular developments in that charts.

 

[Cigar]

First thing for you guys is to stop trading with real money and practice for a while. You've got a stategy to put together 'thats suits you/your personality'.

You've got to work in your comfort zone... don't try to follow other people if you are not happy. Assuming you are daytrading, you have to decide what timespan you are happy with. Some people like 1 min charts, others 5 min, 10, 15, 30 etc etc. (You've got to decide if you like daytrading or swing trading, or longer term trading)

You've got to put a system together that suits you. There are countless technical indicators and combinations of indicators. If there was a magic system, it would have been discovered already. There isn't, so you have to find a system that you like, and wins more times than it loses.

You have to learn discipline. This is the single most important attribute a trader needs, imo. You have to be able to say.. no, its not right, I will not trade, or I'm wrong, I need to exit, and act.

You need to use money management. Sometimes, the wonders of compounding will earn you more money than a big move on the Dow.

I started daytrading a year ago. I was lucky to be advised by a very clever man, someone a lot on this board know. I've tried UK stock, US stocks, the Dow, scanning a list of US stocks, trading a single US stock, and have finally settled on the Dax Futures.

What I'm trying to say is that its a learning process. You don't become a doctor in 2 weeks, why expect it from this profession. Its a cruel business, but you must realise we are not creating wealth, the winners are taking money from less able people. Its simply about more able people taking money from less able people. Its up to you to decide where you fit into that picture.

 

[orchard]

Regarding charts etc. I have been looking at Ceefax on BBC2 page 232. It shows the DOW on an hourly basis. Having looked for some time now, it would appear to me that the general trend is always shown (or no trend if applicable). I can only access my spreadbetting after 6.00 pm so I have been watching the later prices. I intend to trade the DOW dailies only in the last 45 minutes or so, and do not intend to trade with large amounts but test the water first.
Am I being a fool?

 

[ChartMan]

Look back over some of my daily DOW charts- I quite often make comments fot the "Tea Time Traders" - those that can trade after 7pm. There are regularly good opportunities if you have the patience and dilligence to analyse the day's action and current position, then act on it. Quite often, the last 2 hours captures the biggest moves of the day.

 

[Cigar]

Orchard Why not test your system for a week or so. Decide where you would buy and sell, where your stop loss would be. To make it more realistic, use the bid/ask prices from a spreadbetter. At the end of the week, check your paper trades, what you have won or lost. If it works for you, then maybe risk a little money. Don't rush to spend money. It'll cost you plenty before you become profitable, so save a bit in these initial stages.

 

[ihickling]

Cigar/Chartman - sound advice, patience, discipline, preparation and a plan is the way to go or else you will be throwing money away.

Also good advice on the mental side of trading.

A few well executed trades a week, with stop losses adhered to and good plan, will yeild more than diving in and out when you first start.

Fins allow 10p per point to test your strategy and if you make the usual mistakes most of us do you will not be seriously ruined, just a dent in your pride and a realisation that there is more to trading than meets the eye.

regard any money lost as the cost of tuition.

Good luck

 

[DAVIEGRANT]

Some good stuff here chaps.

Is anyone willing to share their trading systems with us when using spread bets. Explain the exact entry set-up and most importantly the exit set-up. Also a brief explanation of its overall success or failure.
I am particlarly intrested in any Day trading methods on the Dow or any indices. But all methods of all time frames are still of overall interest.

many thanks in advance

Davie

 

[Hughmac]

follow chartmans daily analysis on the Dow, this is the quickest way to learn and also log in to the chat room on this site where many traders post trades in real time.

You have to make the effort to learn some TA, there is tons of free stuff on the net, just search for info on any indicator using google etc

cheers

Hugh

 

[orchard]

Re daily trading on the DOW. I have been following it for some time. Sorry if I implied it was totally new to me. I do analyse the splits on BBC2. Tonight I made a quick £75 by going short, keeping an eagle eye on the prices, having already decided that I would come out at a certain level. (either up or down). I do realise that no matter how much you look and learn, there is always an element of luck, but I hope to keep the 'good' luck flowing and minimise the 'bad'. Paper trading is fun but I feel that real trading keeps you much more 'on the ball'. Appreciate all the comments - it has helped me enormously.

 

[Naz]

Your right Daviegrant there is some good stuff here.but i would like to see a few people sharing their trading systems with us as you suggested.

"Explain the exact entry set up and exit set-up"

I dont use spread betting and will only trade the Nasdaq index using the QQQ's.

Here's a set up for me.I'm a lover of Fibonacci on the $Ndx.(Nasdaq 100, ieQQQ's) Check out every pullback in its daily chart in this last leg down from January this year and you will see that every major pullback is to a fib level.If you play around with fib levels in every time frame you will find that the Nasdaq 100 loves them.

As MSFT and INTC make up such a large part of the Nasdaq 100,i wait until either one is at some kind of resistance ie a whole number etc and also the Index is at some kind of fib level in any kind of time frame.Then when i see that the ax is a big seller in either of those stocks i'll short the QQQ's.Will i pay a spread you bet your **** i wont. i'll place my order on the ask with island and act as a market maker and wait for someone to buy from me.

As island trades about 25% of the Q's and the Q's are one of the most liquid stocks in the world it will only be an instant that using islands sweeping technology someone will be routed to my order and i will be hiding just infront of some large order making sure its me that gets the fill.This way not only will i save the spread but i will very likely i'll get a price improvement on the official quote.

Why oh why should a trader realy want to pay a spread! when there is a trading system that allows him to trade an index and not pay one?

If the Q's turned by using MSFT as a turning point i'll then watch the the level 2 screen in that stock to decide when my exit might be.This works 70%-80% of the time.I know that this is not using spread betting but i hate paying spreads.However a spread better could still use the basics of this type of trade if he wanted to trade the index with a spread betting firm.

Now there is one of my ways for playing the Nasdaq 100 index.As Davie said common guys share some of your trading systems with us.

 

[dsmodi]

hi naz et al,

great post naz - canm u tell us wot sort of charges you have to offset every month for your level II data and accompanying software....?

Cheers,

 

[JJL3142]

DAVIEGRANT and others brilliant post. I am glad that people are so open with their strategys - time for me to bed down and write my documentation down - so that i can hear the good and bad points. THanks

Pervaz