Trading with a view to join a prop firm

[Nowler]

I was just trying to highlight that they're not the same thing... why might one person fail to get onto the rugby team but perhaps not fail to get on the football team etc..

sure the fat kid who is massively unfit may be useless at both though and the guy who blows up his spread betting account in a handful of trades is probably a very morbidly obese kid in this analogy

OK it isn't the best of analogies but the main thing is simply they're different - failing at one doesn't mean you'd necessarily fail at the other - the issue with the spread is the massive cost it adds - some successful series of futures trades might cause massive losses if you tried the same thing with an SB firm where you can't work a limit order to buy at the bid etc..

Ok, I see your point.

I was thinking to myself that if I could do well, or even moderately well with spread betting then I would have an even better chance if I was to then move to Futures because of the absence of the pesky spread. To use an analogy myself, it would be akin to a fighter training with sandbags strapped to their arms and legs (spread betting) but then eventually have getting used to them, when they take the weights off (move to Futures), they are now much quicker and better able to perform.
I don't even mind paying a spread cost... it's when it widens/shortens that makes things difficult for me. I stumbled upon this current broker, so perhaps I should try one of the brokers with fixed spreads. I've seen some offer fixed on the major pairs. Though having no spreads at all would be awesome!

that's a reasonable concern and frankly trying to trade futures on a shoestring budget isn't a good idea - thus why I suggested perhaps a small Betfair account might at least get you playing around with a limit order book (yup also not quite the same but you'll at least get to play around with a price ladder rather than just whacking up a chart and trading off two way quotes)

(if you're stuck for money then "matched betting" - basically abusing the signup offers at different bookies is/was an easy way to get some quick cash... I did it years ago when I was a student but apparently it is still feasible now, albeit probably less lucrative than back in the day - alternatively just wait until you have some disposable income to trade with)

Yeah, I've accepted that I don't really have the capital to trade futures. I can still learn a lot about trading via spread betting, so a lot can still come from what I am doing now. One way or the other, I need to increase my capital size eventually if I am to even make a very modest income from this.

I still haven't opened up a Betfair account yet but I will as some point soon. The matched betting/signup offer abuse sounds interesting but I fear I have burned those bridges already as I used to play a game about a year ago and I earned in game currency for signing up to various bookies and placing a bet. Though at the rate new bookies seem to be popping up, I could very well have a fresh list of opportunities. Then again, I am warey of those sign up offers as I have seen many effectively ensure they you will get nothing because of the rules attached to availing of such signup bonuses. I have seen, I think it's bet365 make those availing of their bonus wager the bonus multiple times before money can be withdrawn.

I'll look more into it.

 

[mpups]

You've lost me guys.. Betfair? why? do you mean Tradefair?

 

[darktone]

You've lost me guys.. Betfair? why? do you mean Tradefair?

This is how betfair can look and trade.

 

[DT]

I was thinking to myself that if I could do well, or even moderately well with spread betting then I would have an even better chance if I was to then move to Futures because of the absence of the pesky spread.

well yeah in terms of if you were to make some directional punt with a spread betting firm and then make the same directional punt using the actual underlying futures

but the thing with these trading arcades is they don't (unless they've drastically changed) just employ people to make the sorts of trades you'd perhaps make with a spread betting firm.. i.e. you'd mostly rule out overnight trades and you'd probably be expected to trade more frequently than would be feasible with your spread betting account. It certainly used to be the case that people were either scalpers or were trading spreads neither of which aren't going to be very feasible via a spread betting firm - ergo my point re: them being rather different.

also just as a completely subjective opinion I don't think you'd likely generate particularly consistent results just looking at some charts and taking some directional punt... then again if you are (or even if you're simply profitable) then who am I to argue

 

[DT]

You've lost me guys.. Betfair? why? do you mean Tradefair?

I guess darktone's video illustrates this already but basically it was just a suggestion of a cheaper way to experiment with trading via a limit order book - currently he's trading via a chart and a two way quote with no insight into the underlying market microstructure

 

[Nowler]

well yeah in terms of if you were to make some directional punt with a spread betting firm and then make the same directional punt using the actual underlying futures

but the thing with these trading arcades is they don't (unless they've drastically changed) just employ people to make the sorts of trades you'd perhaps make with a spread betting firm.. i.e. you'd mostly rule out overnight trades and you'd probably be expected to trade more frequently than would be feasible with your spread betting account. It certainly used to be the case that people were either scalpers or were trading spreads neither of which aren't going to be very feasible via a spread betting firm - ergo my point re: them being rather different.

also just as a completely subjective opinion I don't think you'd likely generate particularly consistent results just looking at some charts and taking some directional punt... then again if you are (or even if you're simply profitable) then who am I to argue

Fair point, thanks.
Though I just want to point out that I don't just use charts to trade, I am listening/reading central bank releases also and taking onboard the analysis of analysts. Fundamentals to decide the direction and TA to locate my entry/exit. Or at least that what I'm trying to do anyway.

The more I think about it, I wouldn't like to be a manual HFT like that prop I applied for is.
I probably am HFT to some people but the amount I trade at the moment feels right to me.