Trading the stockmarket (NO Referrals)
- Thread starter mcast123
- Start date
Soldato
norm;30495100 said:
That's a fair comment as they can't place a real order for a demo account. However if your trading strategy relies on those sub-second differences then a spreadbet company is not how you should be in the market. A demo account is also a false view as its not your real money. The stress levels are very different, whether you admit it to yourself or not.
If you want to be serious, open a real account and trade the very smallest position size allowed. What proves you are any good is the account going up in value as a result of your trades. If you can make money consistently then keep doing what you are doing, but with bigger position sizes.
They also can't place a real order for a small order placed with them.
Average size of trades at SB firms is circa £3-£5 a point, tick size of 1 lot, FTSE100 futures contract is £10.
A different SB firm, for most clients, will just hedge the net exposure to any particular contract. For a small minority of clients every order (at least every order that can be) will be directly hedged in the underlying market. Also, for a small minority of clients, orders will be placed under dealer surveillance whereby each order placed has to be approved by a trader. I'd imagine most other firms are similar.
It is also, in general, a relatively expensive way to trade. While it might provide access for people with small accounts it also takes away a lot of your potential edge if trading across short timeframes, certainly intraday. Across longer timeframes you're facing daily interest charges too. It is possibly useful for the occasional large directional punt over a few days assuming you're already above your CGT threshold for the year.
Average size of trades at SB firms is circa £3-£5 a point, tick size of 1 lot, FTSE100 futures contract is £10.
A different SB firm, for most clients, will just hedge the net exposure to any particular contract. For a small minority of clients every order (at least every order that can be) will be directly hedged in the underlying market. Also, for a small minority of clients, orders will be placed under dealer surveillance whereby each order placed has to be approved by a trader. I'd imagine most other firms are similar.
It is also, in general, a relatively expensive way to trade. While it might provide access for people with small accounts it also takes away a lot of your potential edge if trading across short timeframes, certainly intraday. Across longer timeframes you're facing daily interest charges too. It is possibly useful for the occasional large directional punt over a few days assuming you're already above your CGT threshold for the year.
There is also the issue that you might behave differently when real money is at risk. I guess one illustration is perhaps balancing/walking along a pavement right next to the kerb of a road vs walking along the edge of the roof of a tall building. For most people you're going to behave rather differently when there are suddenly some real risks. Most people won't be able to walk along the edge of the roof of a tall building in the same way they can walk along the edge of a pavement even though the action required is exactly the same.
It is perhaps good therefore to have some sort of systematic approach, whether that be coded up and automated or whether it is something you're simply able to quantify and stick to.
It is perhaps good therefore to have some sort of systematic approach, whether that be coded up and automated or whether it is something you're simply able to quantify and stick to.
A poster in another thread queried how 'amateur' investors could possibly do better than 'city traders'. The answer is a long one, and would have derailed that thread (even more).
Here's a couple of articles which summarise the main points:
Here’s How Private Investors Can Thrash Fund Managers!
How to beat the professionals at their own game
Here's a couple of articles which summarise the main points:
Here’s How Private Investors Can Thrash Fund Managers!
How to beat the professionals at their own game
I think it was this post:
Investing in a tracker/ETF would beat plenty of professional investors tbh...
Granted spread betting or trading FX, binary options etc.. is likely to lose you money. Buy and hold investing on the other hand is generally going to work out well for individual investors.
Housey;30495876 said:
Investing in a tracker/ETF would beat plenty of professional investors tbh...
Granted spread betting or trading FX, binary options etc.. is likely to lose you money. Buy and hold investing on the other hand is generally going to work out well for individual investors.
dowie;30498252 said:
For context....as I know how OCUK can miss that and create pages of irrelevant debate and argument that strays from the point....
How many people in this thread have made enough from their trading to pack in their job, run a million pound house and live off it?
I am not for one moment suggesting that people can't make money, can't add value to their life or have some fun and take pleasure from it and all power to you if that's your approach and mind set. As I said previously, I am the last person to tell anyone how they should derive pleasure or how they should spend their time and hard earned cash. My point referenced above is very few people make proper money from it, unlike the city traders I referenced because they are handicapped by their access to data and systems as well as other things. To my point they can not make a living from it, they purely dabble and win some, lose some and if it's all win, it's not enough to live off from the vast majority.
I'm not sure what making a living from it has to do with people investing their spare cash?
Your quote was some people apparently telling you not to waste your time with it and if they were referring to people simply investing their money (either in index funds or buying and holding a small portfolio) then that is rather flawed.
If you're talking about people trying to do this for a living, as their sole means of income, then that is another point entirely - though in the context of the other thread the person you were quoting was simply talking about investing his spare cash.
Your quote was some people apparently telling you not to waste your time with it and if they were referring to people simply investing their money (either in index funds or buying and holding a small portfolio) then that is rather flawed.
If you're talking about people trying to do this for a living, as their sole means of income, then that is another point entirely - though in the context of the other thread the person you were quoting was simply talking about investing his spare cash.
Housey;30498437 said:
No offense intended, but I don't think you understand some of the basics. The amount you make is a factor of two things: the amount of capital at your disposal and the rate at which that capital grows. To pack in my job, run a million pound house and live off it, I'd need, what 50K gross a year? That's 5% from a £1M capital. 10% from £500K. Building that amount of capital is the problem.
I do much better from investing than any savings account. I make more than overpaying on my mortgage. Plus the capital that I have built up is a very nice nest-egg / rainy-day fund / pay-off the mortgage fund / retirement fund.
dowie;30498498 said:
My point is you can't make enough to make a living from it. THAT is my point. Clear? To be even clearer....it's a time spent to value obtained question, to my point in the other thread and that is a different determination to the individual.
Everything else is, to my point above, is trying to turn my point into an argument, as you have a tendency to like to do with some of my posts. I've clarified my point to help you be clear now, so you can move on. If you seek to pull me up on a comment in a previous thread or get me into a debate about how people should spend their money, or the value of it, you're wasting your time. I have stated more than once if people seek to have a play, can make some money and get pleasure from it, all power to them and best of luck, good on them!
Housey;30498537 said:
Why didn't you just clarify that in the first place - your comment was rather ambiguous if that was what you were trying to say? I indeed agree with you on that point the lack of capital of course means most people won't be able to make a living from it. However making a living from it isn't currently being discussed by anyone in the other thread or in this one.
The reason for quoting you (and I presume the reason the other poster mentioned it) was that the original statement, as it stood, was rather flawed. You were quoting someone simply talking about investing their spare cash.
