Spreadbetting Companies Want YOU to Lose? Any Thoughts - You Tube Video Link

[tomorton]

FCA considers SB as 'betting'. The laws surrounding it consider trading SBs as 'gambling' too. Not much comfort for the talented 10% who could make money, given a fair chance.

As a senior writer, you should have known that market makers make up their own prices as they go along, suspending trading when it does nt suit them, or various other techniques mentioned in several posts, to track and destroy any trader who does turn out to be successful.

Financial spread-betting is classed as a form of gambling in the UK but it is regulated by the FCA, not the Gambling Commission. The FCA is the regulatory body for the UK financial services firms and UK financial markets, enforcing in one of the tightest regulatory regimes in the world.

Yes, the SB firms make up their own prices, because they don't offer direct market access. Yes they move spreads and suspend trading when risk to themselves is high. But we all know this and it is legal. It is not cheating. So anybody who knows these things and that this access is therefore structured to the advantage of the firm especially against the intra-day trader but carries on trying to scalp via SB is taking an unacceptable risk.

 

[EnlightenedJoe]

Secondly, what he's alleging is a serious offence under FCA registration conditions.

Which FCA condition is violated by a market making firm changing the price ? The SB company can move the price to where ever they like, including hitting all the stops, if they are making the market. If the SB company is not making the market, then it is also normal for the actual market maker to move the price this way.

 

[tomorton]

Which FCA condition is violated by a market making firm changing the price ? The SB company can move the price to where ever they like, including hitting all the stops, if they are making the market. If the SB company is not making the market, then it is also normal for the actual market maker to move the price this way.

parthaab specifically mentioned stop-hunting but he suggested other nefarious means aimed at making a client lose trades. Hard to be absolutely certain what he means but if he comes back with some evidence we'd all be a bit wiser.

 

[EnlightenedJoe]

parthaab specifically mentioned stop-hunting but he suggested other nefarious means aimed at making a client lose trades. Hard to be absolutely certain what he means but if he comes back with some evidence we'd all be a bit wiser.

Stops are orders. Orders are filled by the market maker. If some choose to call it stop hunt, it is their choice. Clients do lose because their orders are filled. So the market maker is responsible for the loss. If the SB firm is making the market then they are responsible for the client loss.

 

[tomorton]

Stops are orders. Orders are filled by the market maker. If some choose to call it stop hunt, it is their choice. Clients do lose because their orders are filled. So the market maker is responsible for the loss. If the SB firm is making the market then they are responsible for the client loss.

Yes and no. A client who places a stop in a stupid place, with no TA basis, or stupidly tight to the entry price or at the thin end of intra-daily volatility or with no experience form screen-watching as to the behaviour of spreads on that market offered by their SB firm, then its nobody's fault than his own and he certainly wasn't cheated. Except maybe by himself.

 

[EnlightenedJoe]

Yes and no. A client who places a stop in a stupid place, with no TA basis, or stupidly tight to the entry price or at the thin end of intra-daily volatility or with no experience form screen-watching as to the behaviour of spreads on that market offered by their SB firm, then its nobody's fault than his own and he certainly wasn't cheated. Except maybe by himself.

Such a person would have been taught by the SB firm to place their stops like that. So the SB remains responsible.

Do you like evidence of SB telling people to use stops ? I can ask foroom to post up some video evidence for you if you like.

 

[tomorton]

Such a person would have been taught by the SB firm to place their stops like that. So the SB remains responsible.

Do you like evidence of SB telling people to use stops ? I can ask foroom to post some video evidence up for you if you like.

I've been with 2 different SB firms and neither taught me anything. The first was Finspreads and their system actually inserted a stop-loss automatically when you opened a trader or an entry order triggered: their default stop was miles and miles away form entry - too far for frequent multi-day traders but OK as a "catastrophe stop". Neither they nor Capital Spreads (now LCG) ever suggested a tight stop or a badly placed stop or a pip-based stop was the way to go. At least not to me. And one thing I've never read on T2W is the complaint "Well I put the stop there because the SB firm told me to".

The SB firms do offer education but they're not responsible for poorly educated clients who only know enough to get past the mandatory FCA procedure but can't actually maintain their account longer than 90 days.

 

[EnlightenedJoe]

The SB firms do offer education

Telling people to use stops and then filling those stops make them responsible for the losses.

 

[tomorton]

Telling people to use stops and then filling those stops make them responsible for the losses.

Telling people to use stops is enabling them to manage their own risk. There are brakes on my car but Skoda are not responsible if I use them like a prat and skid into a brick wall.

Stop-hunting is illegal: an SB book that tracks the market to trigger a stupidly placed stop is just part of life's rich tapestry.

 

[EnlightenedJoe]

Telling people to use stops is enabling them to manage their own risk. There are brakes on my car but Skoda are not responsible if I use them like a prat and skid into a brick wall.

Stop-hunting is illegal: an SB book that tracks the market to trigger a stupidly placed stop is just part of life's rich tapestry.

If skoda tells you to use the brakes in a certain way and you do and then crash then skoda is responsible. Likewise with stops and SB.

Where does it say stop hunting is illegal ?

 

[foroom lluzers]

Telling people to use stops is enabling them to manage their own risk. There are brakes on my car but Skoda are not responsible if I use them like a prat and skid into a brick wall.

Stop-hunting is illegal: an SB book that tracks the market to trigger a stupidly placed stop is just part of life's rich tapestry.

If they employ rebuttal stooges , pay them to post positive about spread betting , it is business for both s b co and poster.

 

[tomorton]

If skoda tells you to use the brakes in a certain way and you do and then crash then skoda is responsible. Likewise with stops and SB.

Where does it say stop hunting is illegal ?

Skoda haven't told me anything about using the brakes. They sensibly point out which pedal activates them and advise they are checked according to their service schedule but nobody could object to that. If I asked them about braking I suppose they'd use the UK highway code or driver's manual to help out with some safe and sensible advice. Either way, my SB firms never advised me to place a stop in a stupid place.

The FCA say stop-hunting is illegal, by which they mean adjusting quotes delivered to clients purely for the purposes of inducing their loss.

 

[EnlightenedJoe]

If they employ rebuttal stooges , pay them to post positive about spread betting , it is business for both s b co and poster.

It takes one stooge to know another. Go on stooge, show him some SB videos on using stops. I know you are itching for it since you haven't posted videos for a couple of days already.

 

[EnlightenedJoe]

Skoda haven't told me anything about using the brakes. They sensibly point out which pedal activates them and advise they are checked according to their service schedule but nobody could object to that. If I asked them about braking I suppose they'd use the UK highway code or driver's manual to help out with some safe and sensible advice. Either way, my SB firms never advised me to place a stop in a stupid place.

The FCA say stop-hunting is illegal, by which they mean adjusting quotes delivered to clients purely for the purposes of inducing their loss.

So long as they tell people to use stops, regardless of where those are placed, if those are filled then the SB is responsible for the loss.

Do you have a link to the FCA's rule for stop hunting ?

 

[foroom lluzers]

It takes one stooge to know another. Go on stooge, show him some SB videos on using stops. I know you are itching for it since you haven't posted videos for a couple of days already.

 

[tomorton]

It takes one stooge to know another. Go on stooge, show him some SB videos on using stops. I know you are itching for it since you haven't posted videos for a couple of days already.

I suppose I can now sit back and wait for the cheques to come in from Finspreads and LCG (and not forgetting Skoda). I wish.

Just in passing, I am also impressed by my PC World computer, my Canon printer and that little John Lewis garden petanque set. Guess I'll be able to buy a new Skoda soon if these cheques come soon. Actually, perhaps they'll just send one round after all the good publicity I've given them!

 

[tomorton]

Andre Minassian doesn't run a SB firm and I don't think he's employed by any SB firm. He advises against tight stops, so do I.

 

[EnlightenedJoe]

I suppose I can now sit back and wait for the cheques to come in from Finspreads and LCG (and not forgetting Skoda). I wish.

At the very least, your relationship with the SB industry is suspect. Otherwise, what motivation do you have in continue to defend what is indefensible: that SB tell people to use stops and stops cause people's losses.

 

[EnlightenedJoe]

 

[tomorton]

At the very least, your relationship with the SB industry is suspect. Otherwise, what motivation do you have in continue to defend what is indefensible: that SB tell people to use stops and stops cause people's losses.

I'm very happy to try to help new traders. Key to that is bringing their focus towards risk and money management, towards considering how much they could lose rather than just how much they could gain. And a key tool in that process is to always use a stop-loss. The risks from not having one far out-weigh the risks of having one triggered.

Its not just the SB firms who advise using stops, it is almost every single source of information or advice on trading on the planet. There are some notable exceptions but not using a stop is for the highly experienced, who already have great risk and money management.

Sort of like the tight-rope walker without a safety net. He's no more likely to fall with or without a net but you'd better be good if you're going to do that.