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Spreadbetting - when and when not to use it!

Who: Paul - Bedford
Interests: Trading, software, Business Venturing
Trading Style: Volatility Breakout/Day Trading/Swing
What method do you use to trade?: Purchasing stocks, options, futures, spreadbetting, CFDs

From my experience spreadbetting is a mugs game for those looking to trade rapidly or even intraday... Just don't do it. The only way you should consider spread betting firms is for swing trading or holding positions for say three days to 2 or 4 weeks looking for gains over that time frame. Anything shorter than that and you will experience the skullduggery of these who will do things like stop you out of a trade, deny access to the platform/trade, distract you or provide meaningless or ridiculous graphs that may mislead the novice. First thing you must know is that many markets offered by these companies are FAKE! i.e. they are weighted to improve volatility and to entice your trade... so you end up losing...

If you start winning a lot and regularly expect to be denied access intermittently or at market opening. Avoid fancy products like binary bets, these are one arm bandits in disguise, unless you are -:

Very knowledgeable on the fundamentals for the outlook you are positive will happen AND
Disciplined to leave those flashing lights alone.

If you're serious about trading open one of the following accounts and forget the rest -:

Brokers

Interactive Brokers - many markets low commission and low spreads no fake markets.
E*TRADE US account - good for general trading especially swing trading... not so good for intraday trading.
Optionsexpress - excellent for options trading.
Schwab - excellent for help and advice but you'll pay for it. Online General Broker.
Tradestation - The Rolls Royce of platforms...ultra-low commissions for futures options and stocks (with a fully automated platform base and charts that are tick charts not just basic 1 min charts).
Saxo bank - Only ask for their DMA version not the general platform otherwise fees are too high, use them for Forex, CFD trading (which works out cheaper in margin terms but very similar to Futures trading in a very general sort of way...) But be careful here, like many other brokers they make markets in CFDs meaning that if you want to trade indexes as I do, their market prices can be different from the underlying...ay you say? This means for example opening breakout profiles on some indexes are not made available to you to enjoy...but of course that cannot be the case (I think) when you are dealing with a DMA CFD platform...I'll update this shortly... NB ASWX (Australia) will soon add Exchange Traded CFDS!!!!!!

Subscription services to follow others trades: don't be fooled...if they can do it... so can you don't follow anyone...trade yourself.

Other great tools: Worden charts... subscribe to the Gold service for end of day charting of US stocks and indices. This is the best charting tool around if you want to trade stocks US in a traditional way, e.g. swing/momentum trading style holding positions for say 3 days to a month or two. This tool is a real must. Also, if you need wide range of real-time charting you can subscribe to the platinum service. Remember with this style of trading that you can also get into Options Trading as well, as some of the best option strategies involve the holding of stock. For an overview of option strategies go to optionsexpress.com and checkout the world class section of option strategies for free! If you need any other charting real-time tools for accurate tick by tick data that so many firms annoyingly for me do not easily provide perhaps try Proquote or E-Signal products. But really you won't need them unless you are into full-time trading... or trading intra-day (which by the way isn't necessarily more profitable than holding longer positions so don't be fooled).

Apart from just perhaps one or two other non mentioned companies like Man Financial and GNI this really covers it all. Others are more obscure or simply glorified rubbish... for example: CMC markets... ohh please... the platform for CFDs I demoed was being at kindergarten and really bad graphing tool reminding me of some of the worst spread betting companies. IG Markets; good market coverage but the DMA platform did not work properly for me and I was disappointed to see in their IG Markets platform (the pro) was still offering Binary Bets... (c'mon guys grow up, if we want to lose it in a casino we will go to one).

WARNING: when you start trading I guarantee you will lose and lose and lose again. Be prepared to lose 3/6 months worth of trades before you begin to realize -:

You don't need to trade everything.
Your personality really matters.
Anyone asking for money outside of a platform or direct access should be viewed in the same way you perceive snake oil salesmen and some second hand car dealers. Realize that you must learn from every loss and re-live what you could have done differently.
You will learn that you must have a strategy that defines when you will place a trade and when you will exit and how much you will always risk on trades (that figure will not change very much at all regardless of the instrument you trade because it is set according to your initial size of your account.

Courses: I really can recommend only two courses for those interested -:

Anthony Robbins Wealth Mastery will enlighten you and it cuts through the crap of trading with people like AJ Monte (pit trader from Trading Places & huge contributor to E*TRADE's help pages!!!) making appearances and teaching about stock and options and trading safely. A real must for those looking to overhaul their lives financially and set trading in its proper context by sorting the rest of your financial life out first over 4 days costs around £1200 and worth every single penny... (expect to meet loads of people, dance on chairs root out your financial habits that don't serve you, make more money, engage in true learning games, and be prepared to be shocked by the quality of the whole experience and be moved to tears from the extra special speakers and participants forget the rest because the adage... those that can't teach becomes very apt with them all and their boring courses). Next is an add on to this course where advanced Option strategies are taught for a huge price tag in Davos or Marbella for those who need to know the REAL deal behind options trading.

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