Spreadbetting and Daytrading
I’ve been doing a lot of experimentations lately with regards to spreadbetting on the various platforms available and also different forms of strategies mainly in the daytrade arena and here are my thoughts:
- Daytrading with tight stops is extremely difficult – tight meaning around 20 pips. With the spread usually around 3 pips either side, so around 6 pips that’s already about a third of your stop before the market has moved. Brokers can move the spreads around to hit your stops without the market actually moving anywhere.
- Forget 1 and 5 minute timeframes – in these small timeframes, you’re just seeing noise… it’s not possible to make any sense of what is happening in these timeframes. 15 min markets should be the smallest timeframe you’re looking at.
- Longer timeframes (4 hours and daily) are better for trading.. however, this means stops are much larger (100s of pips but the targets should also be of this sort of magnitude)
Some things some people have told me (which I believe to varying levels):
- It’s not possible to make money trading
- No one daytrading system can’t be consistent day to day, week to week and year to year – markets are always changing
- Spreadbetting companies don’t make money from people who trade long term positions – they love people trading daily as most will lose their money
- Successful trading is boring!
Of course, these are must my opinions… opinions are formed by peoples’ own experiences. I’m not saying that’s it’s a definitive list of truths with regards to trading but it’s certainly mine!
