Salty Gibbon
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Just a word of caution Trendie. If and when you do start trading for real, do not start with lots of 1,000 shares. Start with 100 shares and work it up.
Trading the US the Naz/Mr. Charts Way
- Thread starter Mr. Charts
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Yes trendie I concur with the caution regarding lots of 1000.
Here's a trade yesterday - same stock.
I struggle with Level2 - hence my system entry point ( for which I am still struggling with the code ) - but there didn't seem to be an awful lot of buying pressure. So I was happy to leave my original position in. Now how do you work out the adds...???
Ironically I was in on bar 3 of this chart as it looked obviously weak ( to me anyhow)!!
Here's a trade yesterday - same stock.
I struggle with Level2 - hence my system entry point ( for which I am still struggling with the code ) - but there didn't seem to be an awful lot of buying pressure. So I was happy to leave my original position in. Now how do you work out the adds...???
Ironically I was in on bar 3 of this chart as it looked obviously weak ( to me anyhow)!!
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Mr. Charts
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Here's another no-brainer today.
Short PHTN 17.28
covered 16.85
for a profit of 43c/share in 10 minutes.
I am sure not a buff,
about the psycho stuff,
Just send me a trend,
or a bounce to flounce,
you don't need many aids,
to take all those trades.
Richard
Short PHTN 17.28
covered 16.85
for a profit of 43c/share in 10 minutes.
I am sure not a buff,
about the psycho stuff,
Just send me a trend,
or a bounce to flounce,
you don't need many aids,
to take all those trades.
Richard
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Mr Charts,
Based on your figures you lost 57c. Are you in denial?
Seriously though, what do you think of Google? (GOOG) It has large daily ranges, but seems difficult to predict. It's a wild ride but worth it if you get the direction right. I've made over 100c on several short term trades, but am presently sitting on some Short losses from lower levels.
regards, GMcA
Based on your figures you lost 57c. Are you in denial?
Seriously though, what do you think of Google? (GOOG) It has large daily ranges, but seems difficult to predict. It's a wild ride but worth it if you get the direction right. I've made over 100c on several short term trades, but am presently sitting on some Short losses from lower levels.
regards, GMcA
Mr. Charts
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Ha ha
I don't like GOOG, except when it does something obvious like today when the news caused the gap up and then it gets filled - which it did a minute ago ;-)
Look for a brief bounce
I don't like GOOG, except when it does something obvious like today when the news caused the gap up and then it gets filled - which it did a minute ago ;-)
Look for a brief bounce
$140 per share means lots of zeros to buy a 1000!
Looks like we were thinking the same thing.
I am kicking myself for my exit (see 2nd arrow)- had good portfolio results and I thought 25 mins of nothing meant time to take profits.
My rule is to get stopped out and I have learnt yet another valuable lesson from the market.
C'est la vie.
Mr. Charts said:
Looks like we were thinking the same thing.
I am kicking myself for my exit (see 2nd arrow)- had good portfolio results and I thought 25 mins of nothing meant time to take profits.
My rule is to get stopped out and I have learnt yet another valuable lesson from the market.
C'est la vie.
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rdstagg,
I was at the dentist until 1455 hrs, so missed the GOOG gap up. Mucho pee'd off!
However, you don't need much money. I spread bet with D4F. Their spread on GOOG is 15C, Margin is 5% and the dealings are in Pounds. 1 tic of 1c equals £1. Therefore, with Google at say $143.50, to D4F that equates to £14,350 value. 1 contract margin is therefore £717.5. If you close out at 100 cents profit, that equals £100 to you. If Google falls say $1, ie 0.7%, you make 13.9% on your margin, and its tax free!
regards, G McA
I was at the dentist until 1455 hrs, so missed the GOOG gap up. Mucho pee'd off!
However, you don't need much money. I spread bet with D4F. Their spread on GOOG is 15C, Margin is 5% and the dealings are in Pounds. 1 tic of 1c equals £1. Therefore, with Google at say $143.50, to D4F that equates to £14,350 value. 1 contract margin is therefore £717.5. If you close out at 100 cents profit, that equals £100 to you. If Google falls say $1, ie 0.7%, you make 13.9% on your margin, and its tax free!
regards, G McA
That wasn't Mr Charts dentistry was it (ha,ha). some observations on your comment - meant to help and not to criticise.gmca686 said:
"Normal" direct access spread is 1-3 cents. MrCharts and Naz probably don't pay any spread due to their skills in knowing how and when to place the order.
If you are thinking of becoming a day trader look at your spread as 0.104% of profit you have to make to cover it - vs .02 for me (worst case).
Do average of say 10 trades a day and for the same price movements - I will make .8% more per day. Multiply by say 200 trading days - thats a 160% differential!! Compounded (if you reinvest your profits) and you can see where we are headed.
More importantly I found D4F & others skewed the prices as they are not a true market maker. so in fact you may end up paying 20 -25 cents actual spread.
Its a minus zero sum game!
Its the small things that will kill you - took me ages to get it.
rdstagg,
I struggle with the logic in your post. Correct me if I am missing something, but this is how I perceive the situation.
If Goggle moves 1 cent, to me that is £1. The investment costs me approx. £715. At £1 = $1.80, you would need to own 180 shares for the 1c movement to = £1. At $143 per share your investment is $25,740 or £14,300. Am I correct that with direct access you have to invest the full amount, or are you trading on margin? If you are investing the full amount then there is no contest! If you are able to trade direct access on margin then I need to consider it.
I would not do 10 trades a day on 1 share as you imply. I will enter at a calculated point and hold until I have the profit level I am looking for. That may be 10 minutes or 10 days. (I know, a swing trade is a day trade gone wrong!) However, operating with 5% margin I can afford to hold several losing positions without it hurting me.
I'd be grateful to receive your views.
regards, G McA
I struggle with the logic in your post. Correct me if I am missing something, but this is how I perceive the situation.
If Goggle moves 1 cent, to me that is £1. The investment costs me approx. £715. At £1 = $1.80, you would need to own 180 shares for the 1c movement to = £1. At $143 per share your investment is $25,740 or £14,300. Am I correct that with direct access you have to invest the full amount, or are you trading on margin? If you are investing the full amount then there is no contest! If you are able to trade direct access on margin then I need to consider it.
I would not do 10 trades a day on 1 share as you imply. I will enter at a calculated point and hold until I have the profit level I am looking for. That may be 10 minutes or 10 days. (I know, a swing trade is a day trade gone wrong!) However, operating with 5% margin I can afford to hold several losing positions without it hurting me.
I'd be grateful to receive your views.
regards, G McA
Hi gmca686
1. my margin is 25%
2. Your use of margin would worry me but the fundamental point is the price you enter at and the price you exit at. The very second you enter the trade you are down 15c (correct?). To exit at breakeven you must cover their spread - which requires their price to move 15c. The problem I have with margin is that all the books and all the spreadbetters calculate returns on the money you put up front - but to me thats wrong; its the money you had at risk that should be used in the calculation. Margin is only a lever, the risk remains the same in terms of the price movement and your exposure to it. A wider spread simply increases your risk.
With direct access - assuming say a 3c spread (I am being conservative here)- the price only needs to move 3c for you to do the same thing.
In terms of your maths (as I see it) a spreadbetter and a direct access player (dap) enjoying a 100c move - the spreadbetter wins hands down. He has put only 5% down and goes home very happy; but its a double edged sword and the spreadbetters 100c move is dap's 112c move(115 - 3).
Put another way - if the stock moves 4c and both have to exit who makes money and who loses money?
Thirdly;
"However, operating with 5% margin I can afford to hold several losing positions without it hurting me."
A losing position must be liquidated at some stage and surely you don't want the risk of holding it overnight? If your analysis of the stocks move is wrong its wrong - you stop the trade and find another - you NEVER change it to a swing position/long term hold/etc - your premise for entering the trade has been denied and you MUST exit. Otherwise you would still be holding Baltimore technologies and yahoo at $200!!
I hope this clarifies MY views - not those of others (thats what makes a market)! And before anyone jumps on board I am not saying you should not spreadbet - its a perfectly legimitate exercise for smaller accounts ,learning to trade, hedging and taking positions in instruments you wouldn't ordinarily do - eg oil in the last few months - just be aware of the true costs.
Hell I day traded some years ago where every trade cost me £12.95 each way! plus 0.5% stamp duty on UK stocks!! I am amazed I made any money but realise I was just lucky in that the market was in the "bubble" so any strategy would work basically.
Russell
1. my margin is 25%
2. Your use of margin would worry me but the fundamental point is the price you enter at and the price you exit at. The very second you enter the trade you are down 15c (correct?). To exit at breakeven you must cover their spread - which requires their price to move 15c. The problem I have with margin is that all the books and all the spreadbetters calculate returns on the money you put up front - but to me thats wrong; its the money you had at risk that should be used in the calculation. Margin is only a lever, the risk remains the same in terms of the price movement and your exposure to it. A wider spread simply increases your risk.
With direct access - assuming say a 3c spread (I am being conservative here)- the price only needs to move 3c for you to do the same thing.
In terms of your maths (as I see it) a spreadbetter and a direct access player (dap) enjoying a 100c move - the spreadbetter wins hands down. He has put only 5% down and goes home very happy; but its a double edged sword and the spreadbetters 100c move is dap's 112c move(115 - 3).
Put another way - if the stock moves 4c and both have to exit who makes money and who loses money?
Thirdly;
"However, operating with 5% margin I can afford to hold several losing positions without it hurting me."
A losing position must be liquidated at some stage and surely you don't want the risk of holding it overnight? If your analysis of the stocks move is wrong its wrong - you stop the trade and find another - you NEVER change it to a swing position/long term hold/etc - your premise for entering the trade has been denied and you MUST exit. Otherwise you would still be holding Baltimore technologies and yahoo at $200!!
I hope this clarifies MY views - not those of others (thats what makes a market)! And before anyone jumps on board I am not saying you should not spreadbet - its a perfectly legimitate exercise for smaller accounts ,learning to trade, hedging and taking positions in instruments you wouldn't ordinarily do - eg oil in the last few months - just be aware of the true costs.
Hell I day traded some years ago where every trade cost me £12.95 each way! plus 0.5% stamp duty on UK stocks!! I am amazed I made any money but realise I was just lucky in that the market was in the "bubble" so any strategy would work basically.
Russell
Mr. Charts
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Nice post, Russ.
Mac,
"operating with 5% margin I can afford to hold several losing positions without it hurting me."
This worries me also. I don't like to see people putting themselves in very vulnerable positions.
You should NEVER be in the situation of holding several losing positions anyway. The concept you are using will IN THE LONG RUN wipe you out.
In certain market environments it will work temporarily as Russ says.
Also, what happens if you are long several highly margined positions and a geo-economic/political event occurs which smashes the market down?
In reality you believe you are using margin to generate the potential for huge profits. That is exactly one of the ways in which the market (and the SB companies) will take your money from you.
Please reconsider your strategy.
Richard
Mac,
"operating with 5% margin I can afford to hold several losing positions without it hurting me."
This worries me also. I don't like to see people putting themselves in very vulnerable positions.
You should NEVER be in the situation of holding several losing positions anyway. The concept you are using will IN THE LONG RUN wipe you out.
In certain market environments it will work temporarily as Russ says.
Also, what happens if you are long several highly margined positions and a geo-economic/political event occurs which smashes the market down?
In reality you believe you are using margin to generate the potential for huge profits. That is exactly one of the ways in which the market (and the SB companies) will take your money from you.
Please reconsider your strategy.
Richard
Mr charts - Respect
George - Mr Charts point about margin is wholly right.. Its like the Sirens on the shore - alluring and tempting but ultimately fatal - they had to tie Jason to the mast remember to give him discipline. Ultimately thats what I think its all about - discipline to follow your rules NO MATTER WHAT.
its a bit sad really - its a beautiful day and here we all are on a chat forum!! Trading - its a killer.
George - Mr Charts point about margin is wholly right.. Its like the Sirens on the shore - alluring and tempting but ultimately fatal - they had to tie Jason to the mast remember to give him discipline. Ultimately thats what I think its all about - discipline to follow your rules NO MATTER WHAT.
its a bit sad really - its a beautiful day and here we all are on a chat forum!! Trading - its a killer.
Mr. Charts
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My excuse is that I'm just on the computer answering emails helping people I've coached.
Anyway it's raining here! You've got sunshine?!
Coffee, mince pies, newspapers and the conservatory are calling.
Richard
Anyway it's raining here! You've got sunshine?!
Coffee, mince pies, newspapers and the conservatory are calling.
Richard
Mr. Charts
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I can't speak for Russ, but my broker charges $15 round trip 1000 shares ($2 for !00 shares).
Of course, with DAT you don't get the SB or CFD companies re-quoting against you on quick moves either!
So, costs are small.
Richard
Of course, with DAT you don't get the SB or CFD companies re-quoting against you on quick moves either!
So, costs are small.
Richard
timsk
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gmca686,
I day trade the U.S. market using D4F spreadbet and, I'm sorry to say - I have to agree completely with Russell's and Richard's comments. I persist with spread betting as I'm woefully under capitalised and the prospect of a direct access account or even a 'proper' CFD account are distant dreams for me. However, it's not all bad news as I see it as spread betting does enable us to cut our teeth on live trading and to gain valuable experience. In the event that we break even or manage to show a consistent profit - no matter how small - is a very positive omen for when we are able to graduate to direct access.
Russell said: "If your analysis of the stocks move is wrong its wrong - you stop the trade and find another - you NEVER change it to a swing position/long term hold/etc - your premise for entering the trade has been denied and you MUST exit". How very true this is. The market taught me just how true it is In March this year. I opened a short position in ERTS which went against me. I didn't enter a stop and I failed to exit that day and held the position overnight in the expectation that the longs would take profits at the open the next day. They didn't! ERTS continued to climb and in 24 hours I lost 70% of my account on the one trade! I'm in no position to dispense advice to other traders, but please folks - heed Russell's wise words!
Cheers,
Tim.
I day trade the U.S. market using D4F spreadbet and, I'm sorry to say - I have to agree completely with Russell's and Richard's comments. I persist with spread betting as I'm woefully under capitalised and the prospect of a direct access account or even a 'proper' CFD account are distant dreams for me. However, it's not all bad news as I see it as spread betting does enable us to cut our teeth on live trading and to gain valuable experience. In the event that we break even or manage to show a consistent profit - no matter how small - is a very positive omen for when we are able to graduate to direct access.
Russell said: "If your analysis of the stocks move is wrong its wrong - you stop the trade and find another - you NEVER change it to a swing position/long term hold/etc - your premise for entering the trade has been denied and you MUST exit". How very true this is. The market taught me just how true it is In March this year. I opened a short position in ERTS which went against me. I didn't enter a stop and I failed to exit that day and held the position overnight in the expectation that the longs would take profits at the open the next day. They didn't! ERTS continued to climb and in 24 hours I lost 70% of my account on the one trade! I'm in no position to dispense advice to other traders, but please folks - heed Russell's wise words!
Cheers,
Tim.
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