[Is spread betting for fools?]

Hey nit2wynit, thanks for the comment. Let's get into it.

US market open. Indeed, now that I'm no longer a slave of the 9-5 dynamics, I actually do have time to trade the US open. Might be worth having a look into. I keep this in mind. This month I want to certainly focus on the FTSE100, but if I don't see any light at the end of that tunnel, I might have a look at US equities at US market open. Good shout.

Platform I use: ProRealTime with IG spreadbet account

Timeframe I focus on: 1min, 5min, daily chart

Trades per day can range anything from 1 to 10+ (my 'record' is around 20 a day I think, but my sweet spot is like 2-5 trades per day I'd say)

Scanners I was using for UK equities gap-and-go and gap-reversal strategy (all self-built into ProRealTime using their coding language ProRealCode. If you are using the platform as well and interested I'm happy to share the code with you):

- Momentum scanner, showing stocks with above average volume ordered by the largest absolute rate of change (positive as negative) on the day

- Volatility screener , showing stocks with largest movements in last 10 minutes

- Top Gainers over last 3 days, ordered by highest rate of change in last 3 days

- Top Dippers over last 3 days, ordered by highest rate of negative change in last 3 days

- GAP scanner, showing gap ups and downs on market open, ordered by highest absolute gap%

I was using the Top Gainers and top Dippers before market open to add stocks on my watchlist, which looked interesting. Then the GAP scanner on market open to get all gappers. And then moved over to either Volatility scanner or Momentum scanner to watch throughout my trading session.

 

One example where gap-and-go worked particularly well, was on the 3rd of June with Kier Grp PLC.

Gap down by 25%, then falling another 20% on the day. I was in the game with 10 trades, 8 green. All short trades obviously.

 

Another example, 17th May with Thomas Cook Grp PLC.

Gap down by 6%, then falling on the day 35%. I was in with 3 short trades, 3 winners.

 

The problem is, as you can already see at the dates chosen - these opportunities happen in the UK market once per month or so, whereas I made losses most of the days the rest of the month which outweighed the winners on these particular days. But maybe you are right and the US market has these opportunities almost on a daily basis, so probably worth a closer look into that.

[FTSE100 - Daily Trades]

Interesting. I've not looked into Pivot Points yet, but will have a look at it, the next trading days and see if it works out.

I'm determining short term direction by

• looking at trends and breakouts from those trends
• Bounces off or break through VWAP or EMAs
• Bounces off or break through key levels of support/resistance (high/low of day, round price values, etc.)

For example, today we had this pre-market channel, trending upwards between lows of 7350 and highs of 7365. This channel broke at around 7.15 (before my trading hours) with the break below the 200EMA on the 5min chart. From there it continued to make lower lows and lower highs. Short term direction at market open: down-trend

I then expected a reversal at the double bottom at 7330 (one of my positive trades today), however, I didn't expect it to be that strong and breaking far above the VWAP. I expected it to turn around at the VWAP at 7345, where I would've taken another short position with target at low of day and re-enter short at a potential break of that level or long at potential reversal.

As I can now see a few hours later, in theory that is what has actually happened, just instead of reversing at the VWAP at 7345, it reversed at the 200EMA at 7352 and from there a nice 30 point move downwards with making new lows on the day. I had the right idea in principle, just slightly wrong set-up timings.

[FTSE100 - Daily Trades]

Realised it might be better to screen-grab the entire trading window so that time and price can be seen on the axis.

[FTSE100 - Daily Trades]

Hi,

I'm day-trading equities on the UK market for about a year and a quarter now. As I never made any consistent profits with that, I recently started focusing on the FTSE 100 index solely and would like to discuss my (and others) daily trades on the index in this tread. Hoping to find some likeminded traders also trading the FTSE 100 index. Shout, if you are one of them!

 

Before I start in, briefly my trading strategy on the index: (Not sure if this is according to TrendFollowers definition a trading plan, a trading strategy or a trading system or a mixture of all?)

- The goal is to make 20 points per day, so for example catching a move from 7340 to 7360

- Once I lose 20 points, I'm out for the day

- The 20 points can be separated in as many trades as it takes. 2 points here, 5 points there, etc.

- The quantity is static for the entire day and adjusts only as a function of the account equity (So it adjusts only at major equity breakthroughs). I'm currently trading a quantity of 1 for every £400 in equity in the account.

- Both long and short trades are allowed

- Trades are only opened within market hours (8.00am - 16.30pm), however positions can still run outside of market hours (no need to close an open position at 16.30)

- 5 min chart is the main trading chart, however 1 min chart and daily chart are open to keep an eye on

 

What do you think of this trading plan/strategy/system?

 

My trades for the day (13/09/2019; Screenshot attached shows the trades in ProRealTime😞

- Red day, max loss hit

1st trade was a short. Loss
Saw the bottom breakout at market open and then snap back up to opening level, with reversal at 7340 resistance. I entered on the way back down at 7355. Only been in profit zone for 1 minute, then it shot back up and broke 7340 resistance. Exit, not a good start. Down 6 points

 

2nd trade was short. Profit
After trading above the 7340 resistance it just broke, it fell back below it, where I re-entered. This time I was able to ride the down-wave and set my profit at day-break-even. Success. Back at 0.

 

3rd trade was  long. Profit
Double bottom was forming at 7330 support. I entered on way back up at 7334. Lot of consolidation made me nervous and I exited early with a small profit. Better small profit than small loss I thought. Up 3 points

 

4th trade was a long. Loss
Then the index shot up, broke the 7340 resistance and the VWAP at 7345. I entered at a mini flag pattern for a break over 7350 resistance. Reversed at 7350 resistance and I got out at break of 7340 support. Huge blow, another one and I'm out for the day. Down 9 points.

 

5th trade was a short. Loss and max-loss hit. Day over
Consolidating below the 7340 support, now acting as resistance. Bottom break out. I enter short. Turns out to be a false breakout and reversal. Break of 7340 resistance and I exit at break of 7350 resistance. Done for the day. Down 19 points

 

If you also trade the FTSE100 index, would love to hear your trades of the day!

Take it easy

Dan

[Is spread betting for fools?]

First of all I'd like to say that I absolutely love this thread!
Thanks to dmedin, nit2wynit, and obviously caseynotes for this elaborated discussion.

I read a few pages like a few months back until I logged into the forum yesterday night and couldn't believe my eyes that the tread is still going! Love it guys.

To add my 2 cents to this discussion:

Similar to nit2wynit, I also discovered Ross from Warrior Trading about a year and a half ago and thought, that doesn't sound that hard and I'm a smart guy, surely I can do this as well. So after watching a few of his youtube videos and also read his book, I opened a spread-betting account with IG and tried my luck.

However, as I couldn't trade the US market open, as in a 9-5 job back then, I decided to trade the same gap-and-go strategy on the UK market open. So along I went, built screeners and other tools to help me executing the strategy.

Fast forward, one year later, I had exactly 12 month of losses and within those about 13 profitable weeks, the rest (probably around 30-35) negative ones.
I just couldn't crack the **** nut.

Then I had a new idea, which was to pull a lot of historic data out of the IG databases and calculate the probability of gap-and-go's actually happening in the UK market. Maybe it was a US phenomenon? (surely in the UK we don't see those 100%+ gappers for starters).

So ahead I went, my data science skills helping me out here, pulling over 9000 data points, and voila, I actually discovered that a gap-reversal pattern is way more likely to happen than a gap-and-go in the markets I was trading. When refining the variables in my statistical program a bit, I was able to forecast gap reversals with a statistical success rate of 71%. That's 7 winners out of 10 trades, I thought. Happy days. Let's try that.

So I amended my tools and strategy, to focus on gap-reversals instead of gap-and-go's. What can I say, another blow!
I discovered, that while on paper the strategy works, it seems that also the market makers know about that and adjust the spreads accordingly, so that it is seemingly impossible to profit. For example when a stock closed the day before at 290p and opens in the morning at 300p, a gap of 3.4%, the strategy would set a target, based on historic data of like 292p, what would be a 2.7% profit margin. I could then see the stock opening at 300p and falling down to 290p within usually the first hour of the day, however the spread was typically so large, that the best entry I could get was like bid at 294p, ask at 306p or something like that. Meaning I would never be able to make a profit on this. What I would've needed was a bid of 299p, ask 301p. Then the stock falls to 292p, and I can get out at 293p. That's 6p profit or 2%. But spreads were just too large.

I monitored this for a couple of weeks and then abandoned the strategy, the market makers just wouldn't let me win on this one.

That was about a month ago in August. For some reason I can't quite remember, I discovered the FTSE 100 index and thought, why not give this a try.

The first day I reached my daily profit goal in 45 mins. I thought, wow, is this finally it? The spread was laughable small, compared to the stocks I traded the year and a quarter before. Like laughable! Talking about 0.01% spread vs  2-3% before with those gap stocks. And the index is actually moving. (Often with the gap-and-go stocks, I entered my position and then they were just not moving out of the spread zone for like hours). So I was pretty excited as you can imagine. On my second and third trading day with the FTSE 100 index I also managed to make my daily target within the first hour of the day. All well I thought. I upped my account balance to really get started.

Unfortunately, my luck (was it beginners luck?) didn't hold on long. The past few days I'm back at my usual losing streak (about 4 days of losses vs 1 green day). Guess I just need to keep trying - hoping that one day I find something trade-able for me. Might look into forex next.

But for now, I think I'm going to start a new thread on this forum to discuss my daily trades on the FTSE100 index. Hope some of you can join me in the discussion.

 

So to answer the question of this thread: Is spread betting for fools?

No, I don't think so. I think the opposite is the case. It is for the 0.01% of the smartest asses in the population. A fool could never win here.

 

Take it easy

Dan

[Cannabis stocks]

Such a joke - below the email I have received 2 days ago.

What does evolving political and regulatory landscape surrounding recreational cannabis-related securities even mean? Surely regulations are being weakened everywhere around the world right now and not tightened, so unsure why IG went with this decision.

Does anyone else have any further details on this?

Can anyone recommend a good broker to specifically invest in Cannabis stocks? 

We no longer offer share dealing on recreational cannabis stocks

Due to the evolving political and regulatory landscape surrounding recreational cannabis-related securities, we have decided to stop offering share dealing on the below cannabis stocks. Please note that CFD trading and spread betting on cannabis stocks and our soon-to-be-launched Cannabis Index will not be affected. You can continue to access these markets as normal.

Which stocks are no longer available for share dealing?

With immediate effect, you can no longer invest in the following companies and ETFs with IG:

Aphria (US) Aurora Cannabis (US) Bod Australia Cann Global CannTrust Canopy Growth (US) Corbus Pharmaceuticals Creso Pharma Cronos Group (US) Elixinol Global eSense-Lab ETFMG Alternative Harvest ETF HEXO Corp Innovative Industrial Properties Insys Therapeutics Lifespot Health New Age Beverages Stemcell United Tilray

[Pre Market data]

Hi Cryptotrader,

so in the USA the brokers seem to show data during the night all the way until the market re-opens again. So you already know where the stock will open before it actually opens. Where IG stops showing any data and starts again the next morning at 8am and all you see is a big gap, but no information about per market highs and lows, etc

Is this a thing only in the US or also possible at the LSE? How do you identify an overnight gapper before the market opens in the UK?

[Pre Market data]

Thanks WillA

Are there any other tools or websites available which show pre-market data?

I tried to find an answer on the internet today, but it seems like nobody is providing pre-market data for the London Stock Exchange. Is this maybe not supported at all as it is common in the US stock markets?

Does anybody know if you sign-up in IG for the Level 2 data access if you get pre-market data?

(Level 2 access: provides a live price feed and extensive market depth, where applicable)

 

How do people trade gap strategies in the UK?

 

Best

Dan

[Pre Market data]

Hi,

I'm using ProRealTime with my IG Spreadbetting account and am wondering if there is any chance to access Pre Market data for UK shares?

e.g. can I run a screener showing me the biggest gappers before the market actually opens?

Best

Dan