Is spread betting for fools?

[dmedin]

The parabolic SAR is mentioned as a 'strategy'.  Here is the PSAR in all its pristine glory (on daily charts it isn't much better).

[dmedin]

The bottoming out and retracement of DJIA is clear as day - on the day chart (excuse the pun)

 

[dmedin]

Wall Street on a five min chart.

Where would you even begin?  Totally untradeable ... for me ...

 

[dmedin]

Looks better on the hourly with a decisive close above 50 MA and subsequently the 50 MA turning up but unless you were lucky enough to jump on at the right time how would you trade this?

[dmedin]

Wait for a 33 - 50% pullback of gold before buying again?

[Caseynotes]

Haha brilliant, a DOS attack on the thread, I see you managed to spot a V reversal on the daily chart, well done, you are aware they only come round about every 3 months or so but if that's your strategy you go for it. 

You are correct in noticing there was an extended battle on the US open (as there was yesterday) and that you just stay out of conflict and wait for direction to be agreed, well done again, see you are learning. But not about having a set of rules though, the actual indicator used is irrelevant, every one of them is used by someone, it's the rules you devise to use them with that makes them work or not.

[dmedin]

On the 5 min chart I see no agreement.  Just up and down, up and down, up and down - might as well jump off a cliff.  The daily charts are difficult enough.

[Caseynotes]

Dow closes over 200 points up on the day;

M15 chart;

 

[Bell]

@Caseynotes since chatting with you opened up a demo spread bet account.

Done three trades so just getting to know it.

The thing that concerns me is the overnight carrying charges as the process I would want to play is swing.

Not too hot working on a day trade scenario.

Cannot see definitive charges. 

Made small loss on Dax of  £4. DOW £425 profit on the bounce (closed at the 200dma.- and currently £20 down on ITV as fancied seeing how the share plays work.

Too be accurate only traded the Dax for a day and the Dow.

More interested in the indices and commodities as from my meagre knowledge this looks a better vehicle for SB.

All help much appreciated.

[dmedin]

*shrug*

If anybody can show me graphs of them going through the process rather than after it's been completed, maybe I will be able to understand. 

My mind is resisting and I cannot see it.  I don't know how anyone has been able to trade the recent volatility.

Not just me though, I'm one of the 80% ....

Edited June 5, 2019 by dmedin

[nit2wynit]

Right peeps I reached my daily limit for posting.  Who knew.

Yesterday shook me to the core.  Over it.  However, back to the Demo to Prove my Strategy.  The data below will look like a terrible day, but on the contrary it went well;  it's mostly deliberate (apart from the noted Real Losses.  Everything else is simply proving where I went wrong and letting it completely fail.  However, If I remove the Playstation mistakes and the aggressive moves where i wasn't paying enough attention and put all my losing trades down as -£15 only, (coz this is where'd I'd get out)  then it's around £200.  Quick estimate.

We'll see I guess.

This is all using a 2k account.  Maximum ppp @£5 creating a margin of approx £1800.  Stop loss of around 5pts (but I used 10 to give me more of an idea of the range I could play with)  
 

It's fast, exciting and terrifying.  It's elating and downright disappointing too.  But when you're reading the charts right, and getting in and out in 2 or 3 points, it's worth it watching them add up.

[dmedin]

This is what I see of today's trade on DJIA.  Can you spot any 'trends'?

[nit2wynit]

@dmedin, I often use a tighter chart view to create more obvious Peaks and Troughs.  Helps identify.

[Caseynotes]

7 minutes ago, dmedin said:

This is what I see of today's trade on DJIA.  Can you spot any 'trends'?

[Guest davidbrister]

3 hours ago, dmedin said:

The parabolic SAR is mentioned as a 'strategy'.  Here is the PSAR in all its pristine glory (on daily charts it isn't much better).

I use it in conjunction with my Macd not as a strategy on its own, but if u tweaked its figures to kick in a couple bars earlier, no reason why it wouldnt be a solid strategy, even just to buy up trends on that graph it would have made some dollars.

 
Whats wrong with it? Green dots indicate upward trends, red dots indicate downward trends, theres a couple of nice waves in there to catch.

 

[Guest davidbrister]

@dmedin finding the right indicators that you feel comfortable with can help a lot in spotting the trends.

personally just having a volume added to the chart like u have doesnt tell me much at a quick glance, but if i look at my chart below, instantly the Macd's volume strengths show up/down trends, which match the data on the top chart. you have to make the indicators work in your favour, a bunch of coloured lines that u need to think about and interpret compared to instant glance, can only speed up your decision making time.

The SAR dots work well picking up the trend change before the Macd crosses over to confirm the trade.

Horses for Courses. its just my opinion mate.

 

 

[Caseynotes]

8 hours ago, Bell said:

@Caseynotes since chatting with you opened up a demo spread bet account.

Done three trades so just getting to know it.

The thing that concerns me is the overnight carrying charges as the process I would want to play is swing.

Not too hot working on a day trade scenario.

Cannot see definitive charges. 

Made small loss on Dax of  £4. DOW £425 profit on the bounce (closed at the 200dma.- and currently £20 down on ITV as fancied seeing how the share plays work.

Too be accurate only traded the Dax for a day and the Dow.

More interested in the indices and commodities as from my meagre knowledge this looks a better vehicle for SB.

All help much appreciated.

@Bell, no problem, regarding overnight funding see this page linked below, not sure if IG have added other assets to the list but worth a read anyway. 

It's always worth playing about on the demo seeing how the platform works, trying new stuff, new markets, strategies, time frames etc, a lot to be learned.

 

[Caseynotes]

7 hours ago, davidbrister said:

 finding the right indicators that you feel comfortable with can help a lot in spotting the trends.

@davidbrister  is correct, many indicators are very similar in their calcs and so strategies using them often come out very much the same, a macd crossover, an ma crossover and psar are all closely related. When to actually apply it is often the problem, @dmedin is right to wonder the virtues of all of it but the key is recognizing chart structure before applying anything. Markets are not trending most of the time so randomly applying a trend following strategy won't work. Whenever I see consolidation I just block it off with a rectangle and wait for price to pop out either end, that's generally where new trends start no matter what the time frame.

[Caseynotes]

Just re-read the post above and 'price popping out either end' doesn't make any sense, I meant top or bottom.

[dmedin]

Oh, well if it's just a case of posting a chart of historical prices with some TA overlaid then even I can do that.  Simple.

[Caseynotes]

This is interesting, here is this mornings Dax M1 chart with 2 indicators matching. The blue/red dots are a MACD cross signal 5,35,10 and the green dots are psar default. All ready decided that longs were the way and a 10 stop and 20 target 3 good entries. 

You don't need two indicators but it's interesting how they match.

 

[dmedin]

Here's another good one.  (Not shown are the other 9 in 10 that didn't work )

[dmedin]

As a wise man (possibly Confucius, or maybe it was Aristotle) once said, 'The problem with TA is that even a broken clock is right twice a day.'

[Caseynotes]

 

2 minutes ago, dmedin said:

As a wise man (possibly Confucius, or maybe it was Aristotle) once said, 'The problem with TA is that even a broken clock is right twice a day.'

But not three straight hits in a row, The TA's not the problem, it's how and when it's applied.

[dmedin]

Haha yes, I know, it's never TA but the person applying it who is the broken clock.  As luck would have it I am having a lucky streak using the demo account today.

Off the back of Jezza's recommendation on Renault.  Using the good old 'put a stop just above the gap' strat.

[dmedin]

Well, at least I'm consistent: all my trades reversed and stopped out on the demo platform too.

I give up - I don't see any way to be profitable doing this in the long run.

Good luck to anyone still trying!

[Caseynotes]

27 minutes ago, dmedin said:

Well, at least I'm consistent: all my trades reversed and stopped out on the demo platform too. 

not sure how you managed that on the gold trade, your entry looked to be 1335.00 and price is currently 1336.38.

Obviously chart structure wise it was a very late entry but that is one of the problems with the larger time frames, things don't always set up at a convenient time of day.

 

 

[Bell]

@caseynotes thanks mate was looking for that area. Will check through it.

In terms of strategy - it is interesting people being so open.

Showing our mistakes allows us to improve so people who have exposed themselves have been brave.

But together with others opinions like yourself - it really does help. You can try different timeframes.

I noticed you like Wykoff which tends to really suit a longer timeframe.

In my mind he synthesised a variety of different ideas - it is amazing how few people these days know of him and how so many could benefit from his principles...

[Caseynotes]

4 minutes ago, Bell said:

@caseynotes thanks mate was looking for that area. Will check through it.

In terms of strategy - it is interesting people being so open.

Showing our mistakes allows us to improve so people who have exposed themselves have been brave.

But together with others opinions like yourself - it really does help. You can try different timeframes.

I noticed you like Wykoff which tends to really suit a longer timeframe.

In my mind he synthesised a variety of different ideas - it is amazing how few people these days know of him and how so many could benefit from his principles...

@Bell, yes indeed, it is hard starting out, everyone underestimates how long to takes to get to grips with the market and the realisation TA is probably only 20% of it.

A study of Wyckoff is essential to understanding market structure and how price behaves and the basic principles do play out on all timeframes. Just need to be aware that consolidation doesn't always mean accumulation or distribution, sometimes there is just a lack of activity. I was talking about rectangles in an earlier post in this thread today, if it is a true block of acc or dist activity price will fly out with some force which is another good reason to rectangle off periods of consolidation and look for price to shoot up or down out rather than crawl, and then be looking for the pullback. The other thing is that acc or dist may occur as a series of blocks before completion and reversal rather than as most Wyckoff  diagrams show, one auto following the other in a nice neat fashion. 

Interesting stuff.

[Bell]

@caseynotes The consolidation phase is the one that leaves a lot of investors with problems.

Is it the move up or the dreaded down. Volume gives some idea.

Thing is that is why we are all keen on trading the breakout.

On SB you have said you don't like to trade the breakout- but the pullback.

A lot of investors myself included always fear the Pullback may turn into a distribution phase.

You have to have feel for the trend - which Wykoff is so strong for.

Those are the fears. Some times on the longer phase it is a little more definite the signal.

NB. The rectangle point which is one I strongly favour was also proposed by Nicholas Darvas.

They bleed into each other but Wykoff is so good as a basis. It is seen over and over in so many charts.