3 points or 4 points doing 2 trades a day will kill you. Add it to all losers and take it away from all winners. Couple this with the fact that they skew their prices (they know how their clients are positioned in the markets) and you're better off using your money to roll joints with. One of the secrets to successful trading as you'll soon find out is keeping costs down to an absolute minimum and with those spreads you (and everyone else who regulary trades spreads bets) have lost before you even begin. Unless of course say 80% of your trades are profitable combined with the fact that you take a lot of ticks out when you're right.
The best advice for you if you want to get into this game is to open an account with InterActive Brokers and trade QQQ, SPY or DIA in 50-100 shares. Forget about the tax free bullshit, it's nothing but a marketing ploy.
i can watch the market all day, so it will just come down to the software and indicators that i use that will determine whether or not i will trade. with a range of 40 points i'm bound to catch 5? or am i seriously deluded with the accuracy of the my software?
Say you can catch 5 a day, the spread means it wouldn't be worth it. 3900-3903 Buy 3903. Then the market has to move up to 3908-3911 for you to make your 5, which is a lot more than 5. Now buy it at 3903 and it goes down, so you lose 5 (just using 5 here as an example), but who's 5? Does this mean that you sell on their bid at 3898, in which case although you've lost 5 ticks, the market has only gone down 2 ticks because when you bought it the cash was at 3901.5 and now the cash is at 3899.5. Think very hard about this point. Also you're making a big mistake in thinking that you can catch 5 every day. Sure it looks easy. Most members here on this board would sell their souls to the devil to catch 5 every day. Think about it on the real futures. 5 lots, 5 ticks profit means £250 a day, or £50k a year trading 200 days, plenty of time for holidays. So let's up this to 20 lots meaning £1000 a day or £200k a year. Pretty much a printing press. Do yourself a favour, open the account with finspreads and trade 10p a point (even if their spread is wider) for a month or so and see how you get on. Maybe you'll be one of the few who'll have a real talent and if so the money will always be there for you to pick up in the future. The daily ups and downs give the illusion of a lot of money to be made and it's true there is, but you need the consistency and this is what most traders lack. I just wish I could sell you the above advice for £1000 because it would be money (for you) well spent.
it depends which way the indicator tells me to go. if you can bring up a 1 minute chart on the FTSE 100 cash index with a 50EMA and 100EMA, using the 50 as the trigger line, so when the 50 goes above the 100 its a buy signal and when the 50 goes below its a sell signal, it looks reasonable. take a look and tell me what you think...
Reactor It's not about the system or method that you trade it's ALL about the spread. This is what you will find almost impossible to beat over time, and then there's the skewing of the quote. I'll say it again, the only way to make money with the spread betters is to trade very irregularly (preferably on a big move) or to trade long term. And the common denominator on both those trades is that you won't end up paying a lot of money via the spread. Go trade the 10p at finspreads and then come back in a month and tell us how you got on. I think you'll soon come round to our way of thinking. Not having a go at you at all, just trying to make sure you don't make the mistake of so many. Good luck
it's ok colonel i can take a lot of flak! it's better i get a grilling sooner rather than later! i'm thinking hard about finding 6 points if i want to cover my spread for two trades (a buy then sell, or a sell then buy). more than likely i will only do one trade, but i'll have to wait until the end of june to try.