Financial Spread Betting News Information Tips

Janice Bollinger asked:




I’ve been trading for almost 5 years and in that time my trading has gone from pretty much guesswork, to informed, managed and reasoned, thanks to the likes of my mentor and the ideas I’ve grasped from various sites, and so on.

Like many people here (I assume) I have a day job which I enjoy a lot but which keeps me occupied during market hours. Many moons ago my trading was a case of buying stock on one day, because I liked the sound of the stock, and hoping it went up on some later day. Really risky and uninformed, but in fact quite successful (or lucky!) and stress-free.

Now in more recent and informed times I use Level 2, I can spreadbet and short, I can look at warrants and ETFs, I can look at charts, I can plan entries and exits. Ironically my success has tailed off. In part this is because I have been playing with new ideas, trying out different strategies, and sometimes they’ve not worked well. I consider that part of the learning process and don’t begrudge a penny, and it’s been fantastically enjoyable on the way.

However back to the day job. Part of the decreased success is that I’ve been getting into more intraday stuff, such as using Level 2, looking at the way the market moves daily, and so on. This works great for some experienced stock traders and others who do this all day, but in my case the day job means I cannot devote attention to that way of trading. I might be able to check Level 2 now and again, but I cannot be certain that I can place a trade when I want to during the day. This makes me feel more stressed, as I’m constantly distracting myself from work and wondering where the positions are at. At the same time I feel comfortable with what I now know and wish to move away from experimentation to a more applied, serious approach.

Therefore I need to revise my approach. I still do the fundamentals, follow the news, do the technical analysis and plan entries (and ‘We Wait’s!) on the charts. Ideally I will be doing that in the evenings and getting a list of positions ready for the next day. I can then open them first thing the following day before work. Looking at daily charts I see no reason why this is not a viable way to operate. There is plenty of reward upside versus risk over such timeframes.

Since I’m also very interested in psychology I’ve become more and more attached to candlesticks and the sentiment they reveal. Therefore I’m investing a lot more time in studying candlesticks and using it to help time positions. I’ve set up an account on the britishbulls site which seems a good guide for now, and I have a couple of books on the way from Amazon. It’s just something which I can feel gels with my way of thinking. Because candlesticks represent trading pressures over a unit of time (eg day), it’s a good way to summarise the market sentiment during that time without needing to go intraday – exactly what I want to see with this approach.

So after all this rambling I hope I’ve conveyed it well and wondered if this has struck a chord with anyone in a similar position? Does anyone else trade mostly end of day because they are busy at work? How is it working given that you’re not looking at movements during the day? Looking at monthly candle charts it’s clear you can make very profitable investments over daily/weekly timeframes but I guess things become more news-driven as the timeframe expands.



Nancy

Andy Richardson asked:




CMC Markets, or as it was known then, Currency Management Corporation, was founded in 1989, and was one of the first companies to provide trading over the internet. It branched out from the currency market in 2000 when it started offering CFDs, and in 2001 when it added spread betting, and these two now make up the bulk of its business. It operates in fifteen countries, in Europe, Asia, Australasia and North America.

It offers two trading platforms, MarketMaker Web and MarketMaker Desktop, and is still one of the largest providers, although its position has been challenged. It offers a training course for new traders, and ongoing education with webinars and seminars. As you would expect with a long established company, the facilities offered are extensive and the range of products in spread betting comprehensive, including commodities, interest rates, sectors, indices, currencies and thousands of global shares.

There is no demo account service, so you have to open a live account to experience what CMC Markets has to offer. While “tight spreads” are claimed, the spreads do not seem to be as competitive as some other providers present. The FTSE has a 2 point spread, the EUR/USD and GBP/USD 3 points and Wall Street 4 points for instance. These rates are acceptable, but not as good as some and can cut into your profits.

When you come to open a live account, you will find some incentives available. You can have a full day education course, which is worth £200, training material and DVD, and a week of “risk-free” trading on the FTSE100. The charting facilities are comprehensive and easy to use, and include all regular indicators and stock screening. The website goes into detail on the types of orders that can be placed to limit risk, and this is also covered in live workshops.

User reviews have been mixed for CMC Markets. While some criticisms undoubtedly come as “sour grapes” from traders who lost, or from beginners who have little idea what spread betting is – how else do you explain the complaint of someone who does not realize that with a geared financial product you can lose more than the money in your account? – there are some genuine issues. Chief amongst these are the wider spreads, but some also believe they have been re-quoted unfairly when placing trades. Other factors are occasional platform freezing and mediocre support.

Conclusion and Overall Review of CMCMarkets’s Offering

CMC Markets are still one of the largest spread betting providers, and if only for that reason, are worth looking into. They have a vast range of products and a decent interface, including an excellent mobile interface. Although they do not have a demo facility, we rate CMC Markets as worth a look when you are considering which broker to use.



Alvin

Jason Keith Keith asked:




The stock market is a highly lucrative trading platform. However, for an active investor, the stock market holds one big disadvantage – it is difficult to go short. This implies that the investor has to hold on to the shares for a considerable amount of time and cannot execute deals immediately. Contracts for differences (CFDs), however, enable investors to go long as well as short.

CFDs offer all the benefits of share trading, without having to own them physically. CFDs are traded on margin, wherein the profit or loss is determined by the difference in the purchasing and selling price. And, since CFDs trade on margins, investors are required to only commit a small percentage of the net value of the proposed trade.

Benefits of Trading CFDs

The biggest advantage of owning CFDs is that it lets you profit considerably during a falling market. Contracts for differences can be executed more swiftly, facilitating immediate trades, rather than waiting for the market to recover. Other key reasons to trade CFDs are:

Hedging: CFDs can be integrated in an investment portfolio to hedge against the risk of physical shares.

Economical: The commission on trading CFDs is generally lower than that on traditional share dealings. This enables investors to execute more deals on smaller price movements, without having to worry about large, piled-up commission. CFDs are therefore best-suited for day traders. Besides, CFDs are not subject to overnight financing charges.

Liquidity: Since contracts for difference trades usually entail investment in a short timeframe, the funds are not locked up. This creates enough liquidity and flexibility to execute multiple deals. Additionally, CFDs do not have any maturity date, unlike other investment vehicles, such as futures and options.

Furthermore, contracts for difference may be traded on several financial and debt instruments, from shares and commodities to foreign exchange, indices and options.

Smart CFD Trading with London Pearson Limited

Contracts for differences are undoubtedly a profitable investment vehicle, but in the absence of proper money management techniques, your investment may take a downturn. The high leverage and low transaction costs can easily lure an investor to go overboard. To avoid a detrimental financial situation, seek the help of a professional investment firm. London Pearson Limited has extensive experience in creating custom CFD contracts. Moreover, clients of London Pearson benefit from low margin rates, which help to magnify their investment returns.

Peggy

Shristy Chandran asked:




There will always be two sides to anything someone can look into. There will always be two ways to do a thing be it in a relationship, an argument or things like adding sugar or honey to your tea. Financial spread betting is similar in the sense ,that investors try to predict the price of a commodity or a stock and if it comes true than they make money. If you want to double what you have without paying capital gains or even income tax, then financial spread betting is for you.

Understanding the basics

A financial spread betting investor tries to make gains while dealing with the everyday fluctuations in the market. When you are ready to make your move it means you can feel the market pulse and perform buying or selling accordingly. You may be afraid that financial spread trading is risky in these times. Financial spread trading, in reality, doesn’t involve risking physical shares. The only thing you need to put up with is the charge for dealing spread.

You need to be acquainted with basics of trade while doing financial spread betting. This is our list.

Spread. The difference between what you paid and what you received in buying and selling a commodity or stock is what is spread. There are huge advantages of playing for the spread. And here the best thing is there is no commission, stamp duty, brokerage fees, or even capital gains tax to pay. Your win also depends on your location. We have listed how far the benefits can go down, sometimes it might go much beyond those limits.

You learn the fundamentals of the trade very well with spread betting guides. Everyday transaction highlights the importance of knowing when to trade. If you want to be at an advantageous position vis-a-vis financial spread betting, then perfect your timing. That is, the more the market goes to your favor, the better for your portfolio.

Risk management. The financial market is one of the most volatile yet rewarding places you can be in. In financial spread betting use various tools to minimize the risk. While playing the market, take maximum benefit of controlled limits and stops and limits while playing the market.



Claude

Kade Gillingham asked:




Trading E Minis has become very popular over the last two years and lots of traders worldwide are making the switch. There are many reasons why they are making the transition and I am going to outlay some of them in this article.

No market makers;

This means no spreads and no one with their hand in your pocket! You pay $5 usd round trip commission on every trade per contract.

Leverage;

70:1 as opposed to 20:1 in CFDs.

No Gaps;

There are no gaps during market hours.

Speed;

Most trades are over within 10-15 minutes

Quick Profits;

2 points equals 10% return on investment! Where else can you find this kind of return in 10-15 minutes!

Of course there are risks involved, however using the right tools and having a good trading plan you can make some serious money in a short amount of time.

The E Minis are stock indexes such as the NASDAQ, S& P 500 and the Dow Jones and are traded electronically using a trading platform on your computer. This means no phone calls or waiting to place trades. You just set your stop loss, determine the amount of contracts you would like to trade, pick the direction (long or short) and hit the button! Its that simple.

Daily Trading on the US E Minis exceeds $USD40 Billion dollars per day which means it is very liquid and easy to get filled. The major action happens in the opening two hours which means you can enjoy the rest of your day doing what you want. Or of course you can trade the last two hours of the day as well which are usually quite lively and can provide some nice profits.

Janet

William Potter asked:




Is it truly possible to make money trading CFDs? This is the million dollar question that many traders ask themselves before, during and after getting involved in trading Contracts for Difference.

Making money with Contracts for Difference is easy

Nearly every trader you will come across that trades contracts the difference will have made money. The challenge with trading contracts the difference is not making money but instead hanging on to those profits and not letting greed get the better of your trading account.

One of Australia’s largest CFD brokers held two separate trading competitions over different time frames and demonstrated the fact that making money with CFDs is not the hard part but instead overcoming greed in order to hang on to those profits is.

In one trading contest the leader had made over 2400% in five weeks of trading only to give back all of the profit (in excess of $150,000) and start eating into their trading capital. In another similar contest, run by one of Australia’s largest CFD brokers, the leader had amassed over 10,000% profit in a couple of weeks only to finish on just over 4000% profit after a short six weeks of trading. This trader had originally given back some 6000% in profits. The mind boggles.

Did you truly come here to make money trading CFDs?

One of the most common sayings in the stock market is traders always get out of the market what they came for. As a result it is absolutely vital that you define your objectives clearly and set steady achievable goals in order to maximise your opportunities when trading Contracts for Difference.

Those traders who do make money trading CFDs I gently knows quite clearly defined goals, a well-established trading plan, trade within their limits and are able to remove their ego from their decision-making ability.

The Golden Rule of Trading Success

It is a well known fact that the golden rule of CFD trading success is to cut your losses off short and to let your profits run and for many this is a lot easier said than done. When defining your trading plan it’s a great idea to ensure your wins are at least one and 1/2 to 2 times the size of your losses. Further to this, those that can make money consistently trading CFDs are fully aware of all the numbers related to their trading business.

Profitable CFD traders will be able to tell you their average win, average loss, percentage win, percentage loss and the expectancy and maximum drawdown of their trading system.

As you can see making money trading CFDs is a result of good common business sense including building a trading plan, trading within your means, removing your ego and knowing all the numbers of your trading business.

Manuel