Is spread betting for fools?

[nit2wynit]

Therapeutics MD

[nit2wynit]

SNAP Inc.  Might lose today thru a technical mishap-my end of course.  Seems the Web Platform s also linked to PRT Demo...I'm all over the place.

Typical.  Up £25 on SNAP and tried to close.  Spining Cog.....Didn't close....now down £30....Still in though so I'll let it fail now.

Edited September 17, 2019 by nit2wynit

[nit2wynit]

SOPHOS Ltd....Up or Down.


Sorry for the frequent posts peeps.  This is insane.  Can't Close positions.  Can't Increase Stops.....nothing works....How the **** am i supposed to have any faith in this.


EDIT:  hahah.  Oh, i did actually close it.  over 5 mins ago!!!! but it was still showing in my Position as -£60.....I got out early for £0.00 PL    FML

Edited September 17, 2019 by nit2wynit

[DSchenk]

Ok, nobody can say I didn't at least try trade the US open.

But, don't think I'm gonna stick to it.

Reasons:

- Out of 10 stocks on the gap scanner you usually can trade 1-2 and even those are likely restricted on the short side

- From my 2 days experience (lol), haven't seen any insane movements which you wouldn't see on the UK open. So not sure what exactly is the point of the US open if it comes with the same set-ups as the UK. (But maybe I also got unlucky and caught two very quiet days - nit2wynit let me know once things move again, maybe will have another look at it then)

- Spreads are way too big for my taste

- Level 2 data doesn't seem to work for me, even though I purchased the feeds. Not sure what's going on or if this is a bug? Does anyone else managed to get L2 working for US stocks?

 

On the plus side:

- You can scan gappers pre-market which you can't really do in the UK, cause there's no pre-market only the 10min auction.

 

Cons outweigh pros for me here. Back to trading the FTSE100

 

[nit2wynit]

18 minutes ago, DSchenk said:

Ok, nobody can say I didn't at least try trade the US open.

But, don't think I'm gonna stick to it.

Reasons:

- Out of 10 stocks on the gap scanner you usually can trade 1-2 and even those are likely restricted on the short side

- From my 2 days experience (lol), haven't seen any insane movements which you wouldn't see on the UK open. So not sure what exactly is the point of the US open if it comes with the same set-ups as the UK. (But maybe I also got unlucky and caught two very quiet days - nit2wynit let me know once things move again, maybe will have another look at it then)

- Spreads are way too big for my taste

- Level 2 data doesn't seem to work for me, even though I purchased the feeds. Not sure what's going on or if this is a bug? Does anyone else managed to get L2 working for US stocks?

 

On the plus side:

- You can scan gappers pre-market which you can't really do in the UK, cause there's no pre-market only the 10min auction.

 

Cons outweigh pros for me here. Back to trading the FTSE100

 

Yeah lets' take a look at what you're saying here to see if there's a pattern or more clear determination.

The benefit to the US is...more Instruments + more time during the day to catch any news before Market Open.

Re; your scanner:  You said your filter was 10% or above? (i'll need to go back to read the rest again)  That's HUGE.  You're missing out on loads of others.  Remember Ross Trades the best only.  For him that's 5% Pre-Market or above.  10 mil float.  about $2.  BUT also needs potential for a move up.  YUMA for instance.  was already tapped out from Friday (I reckon).  to finish, I don't have a scanner, but still managed to find 5 or more in 15 minutes that had potential today.  However, I was distracted as I've been playing with PRT.  Remember your P/L ratio.  You're hoping for 1:1 or 1:2 at best.  In and out.  You can't make the same gains (or losses) on the FTSE.  It will go up 10 points, come down 8, go up 10 come down 8.... all day long.  In short, Trading the FTSE is NOT trading Breakouts!  So you're gonna need a new Strategy. They are not interchangeable.

Good luck either way, but I think you're quitting way way too soon, and your scanner settings need a tweek.



Here's why.  %'age is just one part.  We also need to watch Points, so I look for anything that's moved 10 points OR 3% or more.  

Also, you've only been playing 2 days as you've said.  It's Slow.  You need patience.  Like I was at the start I felt I needed to Trade constantly.  I know you've said now it's more like 2-5 which is fine, but maybe you're still thinking you need to trade every day?  you don't, but you do need to Look every day.  If there's nothing suitable, then your day is free to do something else.  You Goal isn't to Trade, it's to make sure you only place Solid Trades when all the boxes are ticked.

You tried DNS yesterday.  We both know it was a mistake (don't we?)  Not only was it a slow mover, but you got in in the wrong place.  

I think we need to take another look at your scanner settings.  You're missing out on a bunch of stuff to trade.


Trading the FTSE?  Of course, go for it.  But you can't Day Trade the FTSE and make a living unless you have about 10k account (maybe you do).  If you're not trying to gain an income from it then you're OK.  


 

[nit2wynit]

Here's an example.  I posted it at Market open on here but it wasn't Shortable.  Still had potential to come back up.

Max Margin of 1k.  Max Stop of £100 at 'In'.  £500 to be made here with £1000 account.  I tried to get in on it on PRT but couldn't work out the Stop minimum etc.  It wouldn't allow me to place it so took the dogs for walk Instead.  I'd have been £500 up if I had.


EDIT:  My Watchlist...though i'm keeping away from Shorts at the minute.
 

 

Edited September 17, 2019 by nit2wynit

[nit2wynit]

Jeeez can someone please tell me what this means?  I can place a trade no prob on Web Platform.  10pt stop £5pp.  This happened when i tried earlier.

 

 

 

[DSchenk]

I get what you are saying nit2wynit.

I don't doubt it is possible to trade gap and go setups on the US market open. What I'm saying is, if that's what you want to do, then maybe look for a broker which doesn't restrict trading on 90% of the stocks which gap up.

Also, I don't see lots of different opportunities on the UK open, so why bother trading the US open in the afternoon when you can do the same in the morning? (But maybe that's just me - I'm a morning person - in the afternoon I want to focus on other ventures). And  I have been trading the UK open for over 1 year now.

In regards to scanners.
I was scanning pre-market with exactly the same as Ross. Gap up more than 5%
Once market opens I have on PRT:
gap scanner: more than 5%
Momentum scanner: more than 10% up on the day
Volatility scanner: more than 2% move in last 10  minutes.
Sure you can optimise these scanners to your personal preference.

 

My goal on the FTSE is to make 20 points per day. The FTSE moves on average between 60 and 100 points per day, so that should be easily doable, if you know how.

With a £10k account, you can trade quantities of 25, meaning a 20 points move is £500. That would be £2,500 a week and £10k a month. In other words 100% return per month. And you say you can't make a living out of it? How much do you need, lol - Maybe sell that Bentley 

 

[DSchenk]

9 minutes ago, nit2wynit said:

Jeeez can someone please tell me what this means?  I can place a trade no prob on Web Platform.  10pt stop £5pp.  This happened when i tried earlier.

 

 

 

That means your stop distance is either too large or too small. Try using a different one and see if that works.

I also had problems sometimes figuring it out with those US stocks. Seems to be more straightforward with UK equities or indices. If you are on demo, maybe place a few trades on UK stocks, just to get a hang of the platform, before playing with the US ones 

[nit2wynit]

2 minutes ago, DSchenk said:

With a £10k account, you can trade quantities of 25, meaning a 20 points move is £500. That would be £2,500 a week and £10k a month. In other words 100% return per month. And you say you can't make a living out of it? How much do you need, lol - Maybe sell that Bentley 

hahha.  I don't have a lot for this pal.  Sure, if you think you can grab 20 points per day(I was able to, but catching Up and Down for hours)....No losses and have 10k to play with then Go for It.  I#ll send you my bank details.


I said you can't make a living UNLESS you have 10k

[nit2wynit]

2 minutes ago, DSchenk said:

That means your stop distance is either too large or too small. Try using a different one and see if that works.

I also had problems sometimes figuring it out with those US stocks. Seems to be more straightforward with UK equities or indices. If you are on demo, maybe place a few trades on UK stocks, just to get a hang of the platform, before playing with the US ones 

but it's fine on Web Platform.........Same Stop.?? :O

[nit2wynit]

8 minutes ago, DSchenk said:

What I'm saying is, if that's what you want to do, then maybe look for a broker which doesn't restrict trading on 90% of the stocks which gap up.

I think you're mis-understanding the difference between Share Dealing (Ross) and Spread Betting.  SB is Free.  It doesn't operate the same way.  Because it's Free a lot of Shares are Off Limits.  I doubt any other UK broker offering Spread Betting will operate any different.

This was pretty much one of my 1st questions back in March i think; trying to work out the difference between the two and how I could adapt to make Breakouts work......Alas, I'm still searching and trailing.

Edited September 17, 2019 by nit2wynit

[DSchenk]

20 minutes ago, nit2wynit said:

I think you're mis-understanding the difference between Share Dealing (Ross) and Spread Betting.  SB is Free.

Well Spread Betting isn't free either. The spread comes at a cost which you pay every time you enter a trade.

Let's take ACRS (Aclaris Therapeutics) for example.

Spread in SP is 3 Points.

Spread in CFD is only 1 Point.

This means Ross (or anyone using CFDs) can enter a trade at let's say 2.01 and sell later at 2.10. Makes 9 points profit.

If you enter and exit at the exact same moments with SB you enter at 2.03 and sell at 2.08. Makes only 5 points profit.

That's 4 point difference. Now if you trade with £10k again, you can go with size 150 to fulfil your margin requirements. 1 point is now £150 worth. Meaning you just paid for this trade 4 x £150 = £600.
While Ross pays £5 per trade or so.

Of course you need to pay taxes on CFDs. Let's say 40%. 9 points profit x £150 = £1350. Taxes of 40% = £540

So bottom line with SB you paid £600 for the trade, while with CFDs you would've paid only £545.

Now, tell me which one is cheaper

 

[DSchenk]

Ok so Ross just said it's been another slow day today.

Have I really caught two slow days in a row with my trade the US open experiment? Might need to give it yet another try tomorrow 😀

[Caseynotes]

32 minutes ago, DSchenk said:

This means Ross (or anyone using CFDs) can enter a trade at let's say 2.01 and sell later at 2.10. Makes 9 points profit.

The spreads for SB and CFd are the same, we saw this on a vid of Ross's @nit2wynit posted on this thread a week or so ago. CFDs are banned in the US, have been since the late 70's so Ross is share dealing through a DMA type platform that he pays $280 a day for which includes high speed connectivity, exchange fees and low commission per trade  (1 or 2 $).

 

[nit2wynit]

OK, lets take a look at this.  It should be pointed out that this is what I initially brought to this thread earlier this year.  A few examples were given.  Even back then it was confusing as to which method using a 1k account would make the most money; SB vs Share Dealing if it was on the same stock, making the same point moves, risking the same amount.  Some answers were definitive, some were based on Spread, others based on sheer risk and others still based on preference.  I came to the conclusion back then that it was Safer and Cheaper to Share Deal (hence me joining this thread in the 1st place to prove it-I still haven't )

According to this the spread is 2 vs 4.?  Would you agree?  We should also note we're using a Stock that has a 4pt Spread.  Some only have 2pt.  Even now the FTSE is 2 and later it will be 4.

Not sure where you live but who's paying 40% tax?  Maybe If i make over 75k.  If you are I need your help trading  :O

Meaning you just paid for this trade 4 x £150 = £600.
While Ross pays £5 per trade or so.  'Ross' would have literally bought Shares.  I don't think he deals in Derivatives.  Therefore he's Literally out of Cash for thousands to start.

But i think we're getting off point.

Lets say you make it as a trader and get to 1million.  Would you rather it was thru SB or Share Dealing?  Share dealing you'll pay 40% Tax over 75k :O

Swings and round about.

Edited September 17, 2019 by nit2wynit

[nit2wynit]

another thing to note with SB.  You could technically enter a trade at £0.50 pp on the FTSE.  Therefore you have the potential to make hundreds or thousands.......not likely but possible.....and all it will cost you as risk is £0.50 if you don't use a Stop.  Share dealing you pay per Trade Opened AND Closed.  Usually £5-£10 per Open Close so on each trade you're cost is £10 or £20.  This is before you've even made a profit if you do at all.

 

[nit2wynit]

17 minutes ago, DSchenk said:

Ok so Ross just said it's been another slow day today.

Have I really caught two slow days in a row with my trade the US open experiment? Might need to give it yet another try tomorrow 😀

He stated that Aug and Sept were typically Slow months to trade and that it picks up closer to Xmas; to use the time to Learn, research or Practice.

But he's also a Millionaire  so it doesn't matter much if he's down.

[DSchenk]

14 hours ago, Caseynotes said:

The spreads for SB and CFd are the same

Sorry, with CFD I actually meant share-dealing. Always thought that is the same. But it seems CFD is like spread-betting just a bit different.

Let's talk about share dealing vs SB.

Same ticker: EVR (Evraz)

Black window on left side is share dealing with a DMA platform. Spread is 0.8p.

White window on right side is Spread Betting with PRT. Spread is 1.8p.

If I were to deal on the DMA platform I have to pay £5 (£8 if you don't frequently trade) for the transaction.
If I were to deal on the SB platform I pay the larger spread, which is £1 per quantity traded.

Let's say I have an account of £10k.

This means on DMA I can trade about 2000 shares at current price.
On SB I have enough margin to trade a qty of 100.

Let's say the price moves from 510 to 515.
On DMA I make £100 in profit. Minus 2x £5 commission for buy and sell, that's £90.
On SB I make £500 in profit, because I have a 1:5 leverage applied. But I need to take the bigger spread into account. So minus £1 per quantity, so it's more like £400 profit.

On DMA I need to tax my profits at the end of the year. So the £90 are more like somewhere between £55 and £80 in profits after tax.

So is the point of spread betting purely that I have leverage available which magnifies my profits (and losses, lol)?

And if this is the case, why would Ross and those dudes not do spread betting instead of share dealing?

 

Edited September 18, 2019 by DSchenk
spelling mistake

[nit2wynit]

3 minutes ago, DSchenk said:

So is the point of spread betting purely that I have leverage available which magnifies my profits (and losses, lol)?

And if this is the case, why would Ross and those dudes not do spread betting instead of share dealing?

I think the Point of Spread Betting relates to you and how you feel you can take advantage it.  I went round and round in circles before I realised it was OK to Trade and in many way Beneficial over Share Dealing for the sheer fact that I can Place as many trades as I like and not have to pay commissions plus It's Leveraged (a Curse or a Gift?)  sure, it's a bigger a spread, but that's of little concern to me.  It just means I need to me more selective with my choices and even more so with my In and Out.


Spread betting isn't available all over the world.  It's quite a unique thing,  but I don't think it will be here forever.  Hargreaves for Instance have removed it.  Tighter and tighter regs on it.

[DSchenk]

1 minute ago, nit2wynit said:

I think the Point of Spread Betting relates to you and how you feel you can take advantage it.  I went round and round in circles before I realised it was OK to Trade and in many way Beneficial over Share Dealing for the sheer fact that I can Place as many trades as I like and not have to pay commissions plus It's Leveraged (a Curse or a Gift?)  sure, it's a bigger a spread, but that's of little concern to me.  It just means I need to me more selective with my choices and even more so with my In and Out.


Spread betting isn't available all over the world.  It's quite a unique thing,  but I don't think it will be here forever.  Hargreaves for Instance have removed it.  Tighter and tighter regs on it.

Regs really are the worst  What happened to our free world

[Caseynotes]

6 minutes ago, DSchenk said:

And if this is the case, why would Ross and those dudes not do spread betting instead of share dealing?

Ross is US based, there is no SB or CFD there, they are prohibited by law, have been for decades. They have straight share dealing or futures options.

Tax implications are the only real difference between SB and CFD, SB is UK only. 

[nit2wynit]

8 minutes ago, DSchenk said:

Regs really are the worst  What happened to our free world

The Private Banks and China Own it all now.  We're all soon to becomce Digital Slaves.

On another note my 500 Sirius Minerals shares are about to Tank.....Luckily it's only £100. 

Edited September 18, 2019 by nit2wynit

[DSchenk]

Ok, but surely they could just open an account with a UK provider to spread bet on it?
I mean what do you need to open an SB account? UK bank account - not the hardest thing in the world to get. UK address - easy to get as well. You can set up both remotely these days.
If that would multiple their profits 5x, surely worth the struggle setting up?

I know they also open accounts with other providers which are outside of the US to go around the PDT rule and stuff.

Maybe they are just not aware that the SB dream exists at all? Maybe someone should tell em

 

[nit2wynit]

25 minutes ago, DSchenk said:

Maybe they are just not aware that the SB dream exists at all? Maybe someone should tell em

I've pondered this myself.  I can't really see why they don't either.  Personally I think they're missing a trick.  But SB is limited in many way too as we're aware.  Lack of Instruments to trade of Low Price for one.  Large Spreads, maybe some others?  But yeah, it would be great to do 'side by side' comparison.  

This is what I've been trying to say though regarding your scanner (but I've clearly failed).  We are not bound by the search criteria and Filter that the likes of Ross uses.  We don't need to find Low Priced Stock as we use Leverage and can bet from as little as £0.24ppp on certain Stocks.  This means that providing we have the capital* we can trade a **** load more Instruments than if you were simply Share Dealing.  We/You need to take another look at your screener

I mentioned way back in the year that there must be a sweet spot for trading.  It was dismissed out of hand, but I'm pretty sure there is, for this example alone -  *I can't trade Netflix; need a 3k margin.  If this is the case the same applies to Small Cap Stock, or Stock of a certain Value. above or below a certain Price.  The Volatility, Market Cap and Spread all effect what is available to Trade and even after that we're also limited by account size.

Therefore your account balance not only effects your Stocks Trade List, but then also your Chart Interval times.  Your risk is based upon your Stops.  Most of us will use similar Stop points to one degree or another relative to the Time Interval, but with a small account you're limited by your risk (We can't trade the FTSE on the Daily Chart with only 1k-We must use a tighter time frame and ride the chart pattern, not the Daily or Weekly Trend-If we're trying to Trade the Trend with only 1k and the movement within a week is 100-200-500 points, then our Stop would also be huge unless you were Patient enough to wait and make sure you got in at a Reversal).  This means we can't simply go in on the FTSE using the 1h 1D chart and place a Trade.  Some with huge accounts can.  They'll look at the Day chart and place a stop at a Reversal or Top and Bottom SR and simply make sure the Stop is at the previous High or Low  But the Stop might be worth £500.  But with a small account we must zoom right in and very carefully place the Stop to Limit our exposure to Risk.   The Likes of Ross says to Be Bold and Risk 10% of your Capitall (not Exponential-whatever makes him 2k per day)

Anyway, maybe I'm getting off track.  I'm hoping to do a Noob post on this. 

Edited September 18, 2019 by nit2wynit

[dmedin]

1 hour ago, Caseynotes said:

Ross is US based, there is no SB or CFD there, they are prohibited by law, have been for decades. They have straight share dealing or futures options.

Tax implications are the only real difference between SB and CFD, SB is UK only. 

They buy and sell actual shares in the U.S. but they are still doing it on leverage.  Not really sure how it works there though.  I think they are genuinely 'borrowing' shares from their broker so they can end up going heavily into debt?

If it's legal to drink oneself to death, or blow all of one's money in a casino, it should be legal to SB it all away too ... I'm sure the regulations are not for our benefit but for the benefit of the professionals and the big boys. 

'Leave it to the professionals, they know what they're doing.  97% of these retail punters lose cash and are really just a small nasty stain on our esteemed industry.'

And CFDs are only open to rich 'professionals'.

Edited September 18, 2019 by dmedin

[Guest phil]

32 minutes ago, dmedin said:

Not really sure how it works there though.  I think they are genuinely 'borrowing' shares from their broker so they can end up going heavily into debt?

they use Options to get their leverage

[DSchenk]

GAP scanner today for US open: GAP over 4%; Float less than 50M; price between $0.1 and $5

Not a single stock which is trade-able in IG. All restricted. (I think IG is fooling us, not spread betting is for fools  )

[nit2wynit]

SERIOUSLY!!!!! WTF is going wrong here????  STOP Too Far from Market Level????? 10 fucjking points??

I just opneded the screener too and tried to get in a trade.....Not available to Open!!! FML... why doesn't it say this on the **** ticket??

[nit2wynit]

37 minutes ago, DSchenk said:

GAP scanner today for US open: GAP over 4%; Float less than 50M; price between $0.1 and $5

Not a single stock which is trade-able in IG. All restricted. (I think IG is fooling us, not spread betting is for fools  )

I've told you.  Increase the Price of the Stock.  Gap at 3%  Float 20mil tops.