Is spread betting for fools?

[dmedin]

You're right that there is a lot of available information and a lot of it is free. 

If I could make money reliably from teaching people about TA, or presenting strategies for clients without committing my own money, I would do that instead of actually placing trades.  Seriously.  Because I do not believe that any individual without a large existing portfolio or at least £500,000 cash has any possibility of making a living from day trading.  And I haven't seen any evidence to the contrary.  All of IG's people are employees, even although they are experts in TA and some of them are bound to have a lot of money saved up.  To me that just shows that they would never be able to live off TA on their own account.

 

 

[nit2wynit]

This thread is still proving to be very helpful.  But I'm wondering if anyone can clear this up for me finally?

I've mentioned that I discovered Warrior Trading on Youtube; Ross Cameron.  I'm still curious if anyone actually knows what I'm talking about, and how i can relate the strategy to IG and Spread Betting with a small account.

For instance, Ross would buy shares at maybe $1 or $2 dollars.  He'd wait for a break out, buy the 1st dip, then sell at the top for a profit.  As you will all be aware, it's practically impossible to buy low priced shares with IG because of the Spread.  To be more obvious in my point, Ross could buy 1000 shares.  If they only rose by 10c he could profit $100.

The spread applied is often one whole point, making it impossible to benefit from small moves; so how to i make the same strategy work?

Maybe I should start another thread of my own for this?

[TheGuru12]

Interesting thread, I've not read all of it granted BUT all I can say is this. If you are treating it as a get rich quick scheme then you are the fool. If you are doing it to learn it and make a good go of it and put the work in then it can be rather rewarding and you can have alot of interesting conversations with people along the way. 

I have been doing lots of investing over a decade and I still thoroughly enjoy it the same I did when I first started. Sure I have had some frustrating moments but just ask anyone who has not had a frustrating day in their life. 

Check my Github pages I release some trading bits and bobs and I generally help people who are willing to help themselves.

One thing that helped me no end was The Naked Traders guide to spread betting. 

Good Luck! 

 

[dmedin]

8 hours ago, TheGuru12 said:

Interesting thread, I've not read all of it granted BUT all I can say is this. If you are treating it as a get rich quick scheme then you are the fool. If you are doing it to learn it and make a good go of it and put the work in then it can be rather rewarding and you can have alot of interesting conversations with people along the way. 

I have been doing lots of investing over a decade and I still thoroughly enjoy it the same I did when I first started. Sure I have had some frustrating moments but just ask anyone who has not had a frustrating day in their life. 

Check my Github pages I release some trading bits and bobs and I generally help people who are willing to help themselves.

One thing that helped me no end was The Naked Traders guide to spread betting. 

Good Luck! 

 

 

Totally agree with you TBH, it is a very useful instrument and depends on how the person uses it.

 

[nit2wynit]

I've come to realise albiet too late to save myself, but Spread Betting IS for Fools.  I'm not saying you can't make it work, but christ it's difficult.  It is literally set up to take your money.  FACT!.  The limited Filter function on Instruments, Pre market info, delay, Penny stock trading and huge spread on low volatility markets is all engineered for Gamblers.  How the **** are you supposed to search thru the entire Instruments to find anyhting other than literally going thru one at a time?  What am I missing?

some people are just better at gambling than others.!

As @dmedin pointed out very early on, it's not Trading.  It's gambling, pure and simple.


So, to set me straight, I'd love to hear anyone else's strategy to profit from a £1000 account using Spread Betting.  What Instruments to Bet, what tools to Scan, how to find volatility, Gappers etc. News etc.  you know; every pre-requisite requirement to place a bet.

Can anyone give one working example of how they make this work?  I'm starting to think all the Pro SB folks in here work for IG haha.

 

[Caseynotes]

@nit2wynit, a better question to ask would be how many years do you think it would take to learn how to trade successfully?

Some might say 3, some might say 6 and some might say even more.

Some people do get lucky and happen to hit the right strategy at the right point in the market cycle and get off to a great start but they always give it all back when the market changes because they didn't know the market would change.

That many years is a big investment to gain an edge, would you then risk destroying it by just giving it away to everyone?

But during the learning curve of course you have only spent time and not real money because you wouldn't take a strategy to a live market without fully testing it out on demo first anyway, would you 🙂

[nit2wynit]

@Caseynotes I see.  I've mis-understood the hidden advice here and the purpose of the forum.    Of course; why give your strategy away after the time and losses it may have cost you?

But this is a simple question while asking for the most basic of advice.  Theoretically.

£1000.  Spread Betting.  What stock would you pick? how would you find it? how much would you place?

If no-one can give me a simple answer to this in here, then what's the point?

There's a gap in the info provided.  i.e.  The difficulties trading with a £1000 account limit.

I've lost 15 trades in a row today on the Demo.  Statistically improbable.   I even followed a Trend and reversed my position after 4 losses shorting, then it went the other way and I lost going up too lol.  Every single trade went the other way.  They ALL go the other way.  therefore if i can figure out what I'm doing wrong, I can reverse it?  Sounds reasonable?

 

[nit2wynit]

Has anyone observed the chart delay between SB platform and DMA Live charts?  

How far in the past are we when placing a Bet?

[nit2wynit]

@Caseynotes take a look at this if you care too.  I practice each trade as If i have £1000.  I usually only go to 90% of it margin wise.  i hope you can see the figures.  i have taken a Short Position on it.  Stop loss at around £50 or 7pts.  
What can you see?

[nit2wynit]

I'm expecting it to drop to around 600 mark.

[Caseynotes]

43 minutes ago, nit2wynit said:

What can you see?

The basics; why would you be shorting this, price has just exploded out of a range on high volume and now it's pulling back hopefully getting ready for a second leg up. So you've gone countertrend, why would you be expecting price to fall to 600. I would be expecting price to reverse about there to continue upward.

Buy the failed dip in an up trend. Sell the failed rally in a down trend. Keep it simple.

The way to play that is to look for a candle reversal pattern in the pull back to trigger a long trade. Stick with the basics, picking tops and bottoms is not for beginners.

Keep bet size small untill you are sure of your system. Get good at just one or two set ups (BTFD)

 

Edited May 21, 2019 by Caseynotes

[Caseynotes]

@JamesIG,  can you crop the pic? too much personal information.

[nit2wynit]

@Caseynotes I've actually gone back to the 16th May for the pattern and the news.  I've figured a support line at around 600.  Expecting a short pull back within the day.

there's clearly something I see that is wrong because it's already stopped me out with a £50 loss.

i consider since the 16th a long consolidation so expecting a drop.

[Caseynotes]

Ok, I've pulled up the chart and can see the context on the 1 hour but it doesn't change my mind, price was down trending but went into a range, that move on the 5 min is a strong attempt to reverse that trend. 

Need to go with strong candles with strong volume not against them.

Use the 'export chart' function to send a copy to your download folder to post. You've got into some bad habits 🙂 , you should have started posting earlier. 

[nit2wynit]

@Caseynotes Yes, I'm starting to see that I often try to pre-empt a change in direction.

[Caseynotes]

3 minutes ago, nit2wynit said:

@Caseynotes Yes, I'm starting to see that I often try to pre-empt a change in direction.

Was just looking at the H1 chart and sure it may turn down sometime but not really shaping up for it just yet and be wary of using too small a time frame for trying to pick the tops and bottoms that you shouldn't be doing anyway.🙂

Let the market turn when it's ready and then look to be getting on board at the first pullback, that's the time to drill down to the M5 chart. 

[nit2wynit]

I'm currently at £0.00   It could happen yet.

[Guest davidbrister]

6 hours ago, nit2wynit said:

Of course; why give your strategy away after the time and losses it may have cost you?

But this is a simple question while asking for the most basic of advice.  Theoretically.

£1000.  Spread Betting.  What stock would you pick? how would you find it? how much would you place?

If no-one can give me a simple answer to this in here, then what's the point?


 

@nit2wynit, i wouldnt be trading stocks with IG, i traded the ASX200 Index, only need to focus on 1 chart, ride the waves in the 1st hour of the market opening up and down, then walk away for the day. Using MACd and the parabolic SAR as my weapons and i was using $5 a point. with the Aim of making $100-$150 a day only needed 20-30 points of success and then i didnt need to work a normal 9-5 job. 

Some people seem quite guarded on their successful trading theorys, maybe they hang out here to gloat and make them selves feel better at the tales of misfortune of others, who knows.

 

[Nelsy-Boy]

I agree with @davidbrister. As a beginner I have found indices far more favourable to trade rather than individual stocks. May be there are a lot more people driving the market price on indices and so more distinguishable patterns show themselves. Choose one and get to know it.

[dmedin]

There's a contrary opinion to everything because of course some people find indices too volatile and prefer to trade on stocks.  lol. 

[Caseynotes]

7 hours ago, dmedin said:

There's a contrary opinion to everything because of course some people find indices too volatile and prefer to trade on stocks.  lol. 

The ftse is not usually too volatile  and usually tags along with the others, worth a trial.

@nit2wynit, consider these basic guidelines;

- don't trade breakouts (see vid), wait for the first pullback after a successful breakout. 

- look to trade when price is leaving a significant level, not when price is about to test it.

- look for trend continuation entries not major turning points.

The vid below shows a 'pro tip' on what to do when your trendline gets broken 🙂

 

[dmedin]

3 hours ago, Caseynotes said:

The ftse is not usually too volatile  and usually tags along with the others, worth a trial.

@nit2wynit, consider these basic guidelines;

- don't trade breakouts (see vid), wait for the first pullback after a successful breakout. 

- look to trade when price is leaving a significant level, not when price is about to test it.

- look for trend continuation entries not major turning points.

The vid below shows a 'pro tip' on what to do when your trendline gets broken 🙂

 

 

 

Not looking for turning points etc sounds like advice for day traders, with that video being very emblematic of day traders in general.  (Short, cryptic - pay money to learn more.)

Looking for early turning points sounds like a valid strategy, but maybe only for people with a longer term view?

My best advice to anyone thinking about day trading for a living is don't do it.  Spread bet by all means, after you have done extensive research on your market.  But don't overtrade, that's the biggest problem and the one that I have the biggest obstacle in overcoming.

If you come into it thinking you can trade for a living you will be sorely disappointed.  Treat it as a hobby, as a supplement to your day job. 

Not only will you not get rich by day trading, you won't make enough to live on, in fact you are statistically most likely to lose money - week in, week out - if you trade every single day especially.

They tell you that you 'only' need to win 4 out of 10 bets with a 3:1 ratio or something of that sort.  What they don't tell you is that you are far more likely to lose 10 out of 10 bets than win any.

Edited May 22, 2019 by dmedin

[Caseynotes]

4 minutes ago, dmedin said:

Not looking for turning points etc sounds like advice for day traders, with that video being very emblematic of day traders in general.  (Short, cryptic - pay money to learn more.)

I know of plenty of traders who pick major turning points trading for a living, it's just that I don't know any with less than 10 years trading experience. If you are just starting out stick to the basics, BTFD, otherwise you will bleed to death by a thousand paper cuts.

Not too many people are just going to start trading full time with no experience, not too many people are going to start anything full time with no experience. As I said earlier, think years not months. One of the main problems is that TA looks so simple and it is but TA is not trading, it's only one small facet of the skills set needed to succeed.

[nit2wynit]

@everyone one thing for sure is there's a plethora of differing advice.  Some will be more valid than others, but as opinions go all valid, nonetheless.

There's clearly an error is my stock choices and/or that fact we're living in the past regarding chart patterns.

I know what my main problem is; Patience.  Searching thru thousands of instruments it creating it's own problems.  Finding stock with volatility float volume etc.

So, here's where some of you may be able to help me with my next step.  All else is secondary.

Where and how do i find stock to trade?

[nit2wynit]

For instance; I've mentioned Ross Cameron of Warrior Trading.  He uses a scanner with a predefined set of instructions to find specific stock.  His scanner does all the work for him.  Then he'll narrow down a few of the best and watch them.  they will have potential relating to News maybe.  He sees the Breakout, buys the 1st dip @Caseynotes then get out after he's made a profit.

He specifically buys stock $5 or less, usually around $2.  

As no-one has actually confirmed yet if they know who I'm talking about, he started 2 years ago with $583 and made 100k in 2 months.  He's recently just broken 1m in two years with this account;; all confirmed.

Can i apply the same strategy with 1k using SB?

[Caseynotes]

 

38 minutes ago, nit2wynit said:

As no-one has actually confirmed yet if they know who I'm talking about, he started 2 years ago with $583 and made 100k in 2 months.  He's recently just broken 1m in two years with this account;; all confirmed

Warrior Trading review, looks like you might need to take those confirmed claims with a very large dose of salt.

https://www.tradingschools.org/reviews/warrior-trading/

There is no reason why you can't trial any system for yourself on demo, that is what takes up a lot of time in the learning process.

[nit2wynit]

@Caseynotes try another review

His strategy is as yours (albiet with variation)

Find Low Priced Stock with low float.  Minimum of 5% increase from previous day.  There is a checklist.  Don't buy the break out.  Wait for 1st good candle after the 1st dip.  Buy Shares.  Sell for profit.  Repeat.

The following and success is massive.  No reason to doubt it.  The info is all there.  That review is very flippant.  It deserves more research to prove validity.  I have trialed it myself by watching potential breakouts with IG.  one was Cadence minerals.  Went from 15 to 32 in half an hour but i was demoing.  My problem is the scanner to find the stock that fit the criteria.

@TrendFollower This is clear to me.  I have made this possibility clear that I believe you to be an Investor and the mindset of Day Trading simply doesn't make sound sense to you.

It will be hard for any of you to offer advice to me, if you're not actually sure of what I'm referring to re Warrior Trading.

Fact or Fiction, the strategy is sound.  I just can't find the ideal platform to use.  Plus, in the UK we have SB.  This maybe what I'm failing with.  It's not Sharedealing.  I'm trailing to find out if i can apply the strategy to SB.

[nit2wynit]

@Caseynotes @TrendFollower i sincerely thank you for your time effort and consideration in this thread, but if you're not actually understanding my main question then it's going to be difficult.  But i want to to continue to try

ross cameron is Live now Pre-market USA with a Stock watch.  I'm going to take notes and see if i can make it work with IG and SB.

Back later.

[Caseynotes]

ok @nit2wynit,  you'll need to start testing scanners, if you type 'scanner' into the search box there are probably a dozen that have been suggested on the forum over the last year or two.

Or, use the WT chat room ($200/month), but that was what the reviewer joined and reviewed.

[nit2wynit]

Well, right off the bat today, the 5 stocks mentioned to watch are all Closed and Cannot Open with IG.