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Is spread betting for fools?

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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.

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

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If you're aiming to make 100k in two months ... well ... I don't know what to say.  It would be barely realistic to make that in two years.  I doubt even one person in 10,000 is capable of doing that.

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10 minutes ago, nit2wynit said:

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

if you want to list the stock i'll be able to look into that for you. Given the thread I would imagine that these are highly illiquid, small market cap stock, however there may be other reasons - so let me know. 

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@JamesIG Yes indeed you are correct I'm trying to find out the limitation of SB with IG.  i cannot find enough small cap stock to trade because of liquidity or spread.  they open and close randomly based upon volatility.  

as an example, Diffusion Pharma, Obalon Thera, Co-Diagnostics Inc and Valeritas Holdings.

I'm researching a different strategy with a small 1k account and SB, but it doesn't fit with what I had researched prior to joining IG;  Day trading Shares.

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@dmedin why do you think it's not possible?  Stocks rise and fall each day, some by many points.

for instance, If you have £1000 and can buy 1000 shares at £1, and they go up £2 you can make £1000 profit;  Share dealing.  This can't be done with SB and a £1000 account using the same stock as the spread is 1pt.  My main point is not that SB doesn't work, but that I didn't realise it was so different a mechanism compared to Buying and Selling shares.

What I'm trying to figure out is the alternative and how to make the system benefit me.  So far it seems to play a long game.  However, if you really know what you're doing (which i cleary don't) then i find it quite easy to assume you should be able to double your money each week providing you can find the right stock to trade.

the IG platform alone does not facilitate the ease to find stock to trade as a Day Trader.  there's just too much time and effort searching.

I need  Pre Market DMA and a scanner.  

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I assume Pro Real Time has a better Filtering system?

Can you search the entire market based upon my own search criteria using Pro Real Time?

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yes - unfortunately these are tiny companies which means we can't offer them. In the order you listed above we're talking market caps of 16, 21, 16 and 17 million USD. Minimums on US equities are $250m. 

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ok @JamesIG  Thanks for the info.  a small print i wasn't aware of.  I'll need to readjust again.  Cheers. ☹️

Is there a future update to the platform that simple removes these stocks from the list?  Will there be a % filter? an Instrument Type filter for instance?

Basically, will the platform be improved by way of a more thorough and effective Instrument Filter?

I spent 2 month researching Buying and Selling Shares.  If i can't find a way to adapt the platform to help me with a Day Trading strategy then it will prove unsuitable to me moving forward.

Thanks.

 

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@nit2wynit,

I have on occasions day traded. For example when my short trade on the S&P 500 failed and the trend went against my position, I decided to day trade US indices.

I have also day traded Bitcoin and Crypto’s around two years ago. So I am not against say trading and there are times when I partake when I think the risk is too great in holding overnight as it may be a speculative move or a bubble scenario. 

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@TrendFollower i think what has been missed in my posts, is my Reason?

this is all i am doing.  this is now Full Time.  I've turned my back on everything else.  I dedicate my entire day (bar housework, improvements eating etc.) to studying, learning, research, q&A as in here, Demo etc.  What's happening in the world.  What's next.

My Reason it to create weekly or monthly income.  Daily Earnings.

Everything works to someone; it must do.  This is why so many people do it.  I'm not here for Long Term investing, though if you have a tip i'll take it :D

I've 1k in Pinterest so far.  Made £450, bt it'a back down to about £36 profit.  It'll stay there till it fails.

When i can confirm what platform, what scanner etc. i'll go Live after proving a few.

This is now my job.

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Posted (edited)

Well, I thought a bit more about what Caseynotes said and then I thought, 'Why not apply the same kinds of principles on hourly charts' i.e. wedges and triangles, and yes, I see the potential.  Some of these patterns seem to work quite well in a really short time frame.  E.g. create your trend lines in the hourly and then zoom in to the 15 minutes to see it all close up.

Edited by dmedin
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@dmedin i can tell you this for sure as i did it when i finished using the Demo 2 months back.

Using a 1k account i could make £50 in minutes using my entire 1k Margin.  i was 50/50 on my trades.  However, i left £400 down from £1400, to buy Pinterest shares.  over 3 weeks of live trading i could be up or down £100-£200 per day, back and forth.  So i know it can be done.  I just need to find out what I was doing right and more importantly, what I was doing wrong.

I've since forgot it all so learning from scratch in a bad way. :O

 

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9 minutes ago, dmedin said:

Some of these patterns seem to work quite well in a really short time frame.

Yes, there are thousands of traders on each time frame who all have the same understanding of TA and they are all looking for those same patterns, levels on their particular chart and so helping them to play out. Most all systems and patterns work on most TF charts, it's just a difference of scale.

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Here's a couple of great ones recently, the good old triangle.  I traded some of these signals.

You can set a position to go short when it drops beneath the lower line and have a stop just above in case it's a 'fake'.  If you're really clever you can trade the bounce back up too, and then the drop back down again.  :D

 

 

ftse15min.jpg

usdyen15min.jpg

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Take a look at Electrocomponents PLC.  Great gains to be had long or short.

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Posted (edited)
37 minutes ago, dmedin said:

Here's a couple of great ones recently, the good old triangle.  I traded some of these signals.

You can set a position to go short when it drops beneath the lower line and have a stop just above in case it's a 'fake'.  If you're really clever you can trade the bounce back up too, and then the drop back down again.  :D

 

 

ftse15min.jpg

Looks DAX like, on the daily.

Edited by 616mushroomcloud
Add some more.

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Posted (edited)

@nit2wynit,

I do not know if you have left your job or whether you have lost your job but to day trade and make a living is extremely difficult. To make enough to live a life of luxury is even more difficult. 

I have a full time job. I am an investor. Trading is just something I enjoy and partake in should the right opportunities present themselves. If not then I do not trade. Simple. I do not rely on any profits from trading in my life.

I would always suggest learning the trade whilst in work and earning an income. Once you have tested and satisfied yourself only then stop working and attempt trading full time. I would even suggest working full time and trading part time or even less than part time to see how much you can make before trying full time day trading. 

I would have done all the research, reading, learning, etc. whilst earning an income and in work but I suppose it is your personal choice as I do not know your financial circumstances. You may have enough to live on without having to worry. 

TrendFollower Tip: Research which are the strongest trending assets in say since the start of 2019. Try and find out why they are the strongest trending assets. Think about how you would have traded them had you started day trading them since the start of the year to now. Do not get fixated by just stocks unless you can successfully identify the strongest trending ones. So for example which were the top three or top five best performing assets from 1st January 2019 to 22nd May 2019? Would you have been able to trade these daily and made a profit more times than not? This may help broaden your mind and widen your horizon. For example it is possible that the US indices since the start of the year have outperformed any stocks you have been looking at based on percentage returns or points / profits using leverage. 

Edited by TrendFollower
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IF your going to trade shares @nit2wynit look for patterns like after announcing and paying dividends a stock falls and then returns to its normal price, but not in every instance.
Are you looking at buying shares entirely or portion of via CFD's?

Playing with those shares around the $1 mark while can prove favorable, only need to drop a bit and wipe out your worth, you mentioned $1 going to $2 and doubling your money, the same applies if it drops to 50c you just lost half your money as well.

Penny stocks can be fun to trade for a few cents worth u can throw a few hundred and watch it grow and fall, but wouldnt put all my eggs in that basket.

You seem hell bent on trading shares, have you looked at Index's as an option?

 

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@TrendFollower I'm in my mid 40's but have not worked for anyone since I was 21.  I've either been in education or Self Employment.  I have been an Entrepreneur in many areas.  However, all endeavors have now come to an end.  My partner and I live to a budget.  She works full time, but we are in agreement that i would take a year out to learn to Day Trade and Invest.  My journey started in March this year, but side stepped to buy Pinterest shares.  However, i have a strict balance of 1k and must see profit from it as soon as humanely possible in order to consider moving with it.  But having taken nearly 2 months off, it's time to re-learn SB OR move to a Share Dealing only account to apply the disciplines I've come to understand.  However, this said, I may need to take advantage of SB here in the UK, so for now it's back to the Demo and back to the Notepad.  As to why I don't or haven't yet considered ETF's etc, or FX.  Volatility, small account, lack of insight.  I can only focus on one Instrument at a time.

@davidbrister sound advice, thanks.  i learned watching Ross Cameron of Warrior Trading.  If you don't know you can find him all over YT or the Web.  While we all understand shares price can go up or down, it's about making sure you have good certainty it's going up.  However, with Share Dealing you pay a small commission.  With Spread betting using your entire account (in this case 1K) the Spread and Stop Losses are too great.  I can end up £30 under before I've even started.  Yes, this means I need to reduce my stake to a smaller £1 pp.  But then my funds are tied in longer periods to make the same profit.

I'm still working out the figures re SB vs Share dealing.  Spread Betting is entirely new to me in the recent months.  Trying to get my head around Spread, Margin etc. compared to simply buying shares and selling them, has required a fresh look at what I'm doing.  I'm still on the fence.

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@nit2wynit,

Thank you for your detailed explanation which certainly helps put things into relevant perspective. 

If it is stocks you want to day trade then have you considered large caps? You could consider using the leverage available to make profits on small movements on such large caps. This could be something which you could look into.

Whether it is UK large caps, US large caps or others is up to you. Which ever you choose, try and study their price action on a daily basis and work out how much you could make each day based on your budget? How much price movement would you require to hit your targets? How much leverage would you have to utilise? How would you set your stop loss should the direction of trade go against you? This is just a thought. I am not suggesting that you should follow me blindly and as always you must conduct your own research but it is just a thought. 

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@TrendFollower Yes, this is what i am currently doing.  If I'm pretty confident in a move I will go all in on Margin and take profit as it goes up or down a few points.  If i aim for £20 profit per trade, I'd be aiming for 5 decent trades in a 4 hour session.  However, I'd be happy to attain £250 profit per week.  This money ill not be to live on but to grow the account balance.

As we've touched upon earlier in the year, I'm trying to figure out which platform will be more beneficial.  SB vs Share dealing.

I've only just figured out this morning that most of the Small Cap UK aren't available to me on SB.  Therefore my only option is stock that may move 25 to 50 points in half hour sessions and go in for £1 pp

Cheers.

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@nit2wynit,

I would not advise going all in on margin. Learn to make lots of small profits and build your experience and confidence first. Devise a trading system which can work for you. This may take a bit of time but you will appreciate it in the longer term. The big risk you have is blowing your capital and your trading account. Have you thought about risk management and how you are going to set your stop losses to minimise your risk on each trade?

I would only suggest allocating a certain part of your available trading capital for the day to any one trade, at least initially until you can confidently and successfully make more profits than losses on a consistent basis. 

No problem and all the best.

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@TrendFollower Yes my risk management is in the belief of certainty that the trend is going up or down.  Every trade will have a maximum Stop loss that will never breach more than £50, but usually no more than £15, however this also requires movement up or down within the trend fluctuation.  Hypocritically, I know what to do and how to do it.  I'm just not applying it every time.  This is my Discipline Training phase. :D

For instance, several months ago, I made about £200 on the 'US Russell 2000'.  It was a great set up.  If I remember I made several good runs up and down as it consolidated.  All with a 1k account.  This took about 4 hours to complete, making anything from £25 to £80 each trade.  It was a good day.  Lost it all the next day. :D  this is the point when i went from £1250 to 1k and pulled out to buy Pinterest.  So i left on a big losing day.

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making big profit per trade will kill your capital.

When i was day trading @$5 a point on the ASX200 index after 10 points of 1 way movement i would add an extra trade @$5 a point, and reset my stop loss at 11 points from the start once the 2nd trade moved forwards 2-3 points to lock the $55 profit in, some times i would vary that 2nd trade to $10 or even $20 a point to increase the return, i had to be quick and move swiftly the market moves with far greater speed in that opening hour, but on occasions if i got onto a nice wave early i could have my days profit target ($150) reached and exceeded in the 1st 10-15mins of Trade, then i would turn it off and go do something else for the day.

In the same breath of that 10-15mins of trade i could have not moved fast enough then needed the next 4 hours to claw back at the loss i made in the opening minutes.

Smaller regular gains add up faster than losing big chunks and trying to double your money every trade.

Im actually running a live trial in a software program that im looking at buying for FX trading, no emotion let the computer do it for me. started with $500 its a 2 week trial, day 3 today, only risking 0.01% per trade, today it placed 4 trades which all were successful, $0.54 profit per trade. while not much, i intend to trade a lot more than that if i buy the program, but im sure u can do the math, if i traded with 10 times more and used a risk factor of 0.1% at least.

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@nit2wynit,

There are many times when the days trend is different to the longer term trend and so it is very difficult with certainty for that day whether the trend is going up or down especially if you place a trade early in the morning. No one knows with any certainty how the trend will manifest itself as the minutes and hours pass.

Day trading is very difficult and so I would still advise executing small trades and really test your strategy first with smallest amount possible on margin before placing larger trades and before risking more capital. 

Try and find the most liquid shares on say the FTSE 100 with high volume and really test your trading with small trades.

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@TrendFollower Good tip today for FTSE100.  It's not something i usually consider.  Demoing as if I had 2k account I've made about £200 today (Since i started at 1pm) but lost some too.  The one's i lost is where I left the screen.  As I'm having to live with Automatic stop limits.  up £106.  I just need to do this everyday without the losses :D

 

 

FTSE.thumb.jpg.ce83187f4f35c90b3ca647c03e4dee91.jpg
 

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Posted (edited)

Well chaps, I see the value in trading individual stocks and indices.  One of the premises of TA is that it can be applied to everything.  @nit2wynit

if you can sustain your profit making in demo then it may be time to try it out for real?  Making $200 a day is pretty **** sweet, but only if that's sustained over a period of time (i.e. a net average profit per day, over a sustained period of time).

Edited by dmedin
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4 hours ago, nit2wynit said:

@TrendFollower Lost it all the next day. :D

 

That's the problem and why I still wouldn't recommend day trading as a living to anyone.  After making money you actually have to cool down and be more conservative with your trades.

I'd still rather be employed as a technical analyst than trade for a living.   Day trading doesn't give you a regular, reliable income and very few people can survive without that.

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@dmedin Losing it the next day was me being foolish.  I've only started trading in march.  never before that.  Plus that WAS a Live account.

Here's a previous run off successes (Demo).  Regardless of the amounts, it shows the wins rate.  In a short time i was doing ok with the charts.  but I'm on 1 minute watching like a hawk.  I cut my losses usually well before my stops.  Caught me out a few times though.  It was shortly after this I went live, but didn't adjust for a smaller £1400 account.  so got stopped out frequently.

 

761030328_Decentday.thumb.jpg.7f904ab802d1ce4a34645718488e25da.jpg

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