Which CFD Provider?

[timsk]

Hi All,
The immortal words of Messrs. Lennon and McCartney spring to mind: "Help!, I need somebody". I'm getting my trading knickers into a bit of a yuletide twist. I'm a wannabe U.S. day trader, primarily Nasdaq stocks. I'm a 'student' of both Naz and Mr. Charts who, for the record, I can recommend heartily to anyone wanting to trade this market.
Thus far I have only ever speadbet (Fin's to start with and latterly D4F) but, like many others before me, I have grown weary - very weary, of the gaping chasm between bid 'n' offer laughably called a spread, the skewed prices and the requotes. (N.B. I'm NOT inviting yet another debate on how, if or why spreadbet Co's bias their prices OR the pros and cons of trading coaches. Both subjects are covered extensively elsewhere). Funds are limited to about £3K, so direct access is not an option. Both Alan and Richard have suggested CFD's. Now, it appears to me that CFD providers fall into 2 camps: those that charge a monthly/annual fee plus commission on trades and those that are 'free' ho ho! Obviously the latter group make their money from a wider spread (read chasm) and skewed prices etc. and so it seems to me that if one elects for this group of providers one may as well stick with spreadbetting and reap the tax advantages. My sole motivation for wanting to switch from SB to CFD's is to trade prices which mirror the underlying instrument exactly - if possible. Assuming my basic understanding is correct, can anyone recommend a commission/fee based CFD provider who will open an account with my meagre amount of capital whilst not being prohibitively expensive?
Thanks in advance for any suggestions. Seasons greeting to one and all.
Tim.

 

[JonnyT]

You are not going to be able to day trade US Stocks with CFDs.

The spreads just spread to unreasonable levels i.e. 50 cents

You have to trade the actual stock IMHO so you need $25,000 +

JonnyT

 

[gfrachet]

i ve tried the etrade cfd demo and u can actually trade US stock CFDs....the spread is around 20bps though...plus 15$ com

 

[markjpwill]

Spreads

I'm a bit confused as to why you guys are getting such wide spreads. With IG I seem to get the market spread - which if I am trading the fast moving stocks in the US like AMZN is often 1c . It is perfectly possible to make money day trading with CFD's - I do on a regular basis.

 

[timsk]

Mark,
. . . Interesting! Of the 2 camps I mentioned in my opening post, I would have thought IG were one of the so called 'free' CFD providers and, therefore, made their profits thru' a wider spread and skewed prices. AMZN is one of my core stocks and if you can trade that and get spreads as small as 1c - then I'm interested. Any further observations that you'd care to make about IG would be of interest.
Cheers,
Tim.

 

[Saul]

Hi Timsk,
I am also a student of Naz & I'm having the same challenge. Which cfd provider to use? I also come from spreadbetting & was fed up with losing all the time. But I can't see how trading cfd's is much better, after all, there is still a larger than life spread Plus a commission.

What charting software are you using? I've just downloaded esignal & so far I'm not impressed.

 

[timsk]

Hi Saul,
I'm doing everything on a tight budget, so e-signal is not an option for me. Sorry to hear you don't get on with them - broadly speaking they enjoy a very good reputation, - see what other users say about them on this board. Instead, I use prophet.net whom I'm happy with for the time being. Re. CFD's - I agree with you, I can't see any advantage in switching to a 'free' one for the reasons discussed already. Commission based providers are great because, in theory at least, you get spreads which mirror the underlying instrument; but your risk:reward and money management strategy must accommodative their commission. E*trade, for example, charge £9.95 per execution. If you exit a trade in 2 halves, that's the best part of £30.00 which, in my case, is around 1% of my capital! So, as I see it, there's no alternative to spread betting for the time being. The best of luck to you and to everyone else in 2004.
Tim.

 

[Niall]

I still use Deal4Free altho I have an IB account too. I found D4F pretty useless for any kind of fast daytrading but these days I have moved away from that and am concentrating on swing trading an active portfolio, and the problems of widening spreads or requotes at the worst times is less an issue now.

Their prices and spreads on US cfd's are not bad really but as discussed here often they do have many flaws.. its a question of finding workable solutions if you want to trade and especially with limited funds. I survived over two years of various forms of daytrading.. using D4F to start and learn real time trading was invaluable in my case.. and I then funded IB (Interactivebrokers) and properly traded with that.. and there is no real comparison for daytrading.

But if yours funds are limited I would really strongly suggest re-thinking your strategy and consider some forms of swing trading.. and one of the real benefits on D4F is that you could build a portfolio of stocks and trade any number of each.. spread the risk.. to me it seems better to have 10 stocks of 50 shares each than risk 500 shares on one trade.. especially if relatively new to the game. As I said above.. when daytrading with D4F they used to drive me nuts with requotes but I have not had any issue with them since swing trading.

For software I have used many.. nextrend.. tried realtick.. quotecom with erlanger...esignal alone and with ensign and also InvestorRT.. never really found the best combo of price/features.. but now for my swing trading I am using the ridiculously cheap sierracharts with live IB feed (the most underated software there is) and also prophet.net... which is great in one way for what I like to do.. but intensly annoying to me as it is java and web based.. the search goes on but that is working for me for now..


Neil

 

[jonnyy40]

What about the more volatile UK shares? Do their spreads open excessively?Just had a look at S+P 500 cash (saturday) on IG and the spread is 1.As this is out of hours I assume this is the maximum spread anyone ever sees?
If you start to win,do they play any games?