Any Day trading experience?

jimmy1968

Rather than just reading about huge banker bonuses, I want to trial an experiment with day trading to see if it is possible to make just a fraction of what the big city big boys make.
A colleague of mine who is a qualified accountant told me about day trading which does sound exciting What is day trading? however being a cautious person, I do not want to risk any of my own money and so would like to firstly trial it through a free and no risk "demo" account that I know people can setup.
Does anyone have any experience/recommendation in setting up one of these accounts with a UK based firm?
Many thanks in advance for you help.
Jim

psychic_teabag

spread-betting might be a cheaper way to do it. (But possibly also riskier, since you're using a lot of leverage.) Most of the spread-betting firms offer a free demo (since they'll be more than happy to take your money once you decide to sign up for real.)

paddyrg

The cityboy bonuses aren't usually terribly closely tied to results - most managed funds underperform the FTSE 100 (especially after 'management fees') - maybe use that as your benchmark and if at the end of a month's trial you're ahead of the FTSE more often than not, you can take a flutter.

Don't kid yourself though, without insider information, you're gambling.

shmeeko69

The city boys gamble with other folks money unlike what you're thinking about getting yourself in to. Day or any other form of trading is risky and I speak from experience.

The first thing you want to do is buy yourself a couple of trading books like Way Of The Turtle by Curtis Faith before you go and open up any spreadbetting account like IG Index or the like.

This is a superb book and is from a group of traders calling themselves the turtles who made a fortune because they got to understand the psychology of the trading markets.

These are shark infested waters, so make sure you prepare yourself correctly and do all the due diligence,as it'll save you a small fortune.

Coraline

I had a brief stint working in financial "services" (as in they service you by bending you over the table and....well you can see where I'm going).

The thing about stock brokers that deal with the general public is that they're looking to unload stock that their firm does not want.

With that in mind, if the stock was so great, why aren't they keeping it to themselves and buying it but trying to pawn it off to you?

As for day trading, I tried it and failed miserably. I'd like to think of myself as pretty financially savvy and have a solid education in economics and finance, but the problem is that human emotions get in the way and logic goes out of the window. From my personal experience, don't even attempt it.

The game is not set up in your favour.

jimmy1968

Many Thanks for your responses Money saving folks :-) after a lot of research I have opted for a Cityindex account for a two week trial with £2500 free "virtual money" - so here goes..... watch this space :-)

Denzel1989

Hi newbie here....id like to know the outcome of this, its something that i have been interested in a while.

Regards Daniel.

zugzwang

I can tell you the outcome most of the time is that 9 out of 10 spread-betters (or CFDs) lose money.

There is a place for spread-betting. Say for example you own a large chunk of shares but you believe short term that the price will fall, but long term it'll rise. You can cover this with a spread-bet, betting that the price of the share will fall whilst continuing to hold the shares. So short term if the price falls you take profits on the spread-bet and wait for the share price to recover, or if the price rises you take a loss on the spread bet but get the gain on the shares. So in this case, because you have positions either side of the bet, you are using the leverage to reduce the risk and often this is how institutions use spreadbets (or CFDs).

But I have similar experience to Coraline-the problem is emotions. When you are betting for high stakes with your own money its very different to a demo account or a job.

What will you do when the market moves 0.5% against you? You have lost 50% of your money (assuming 100x leverage)? Can you wait until the market moves back in your favour? If you held ordinary shares you could! But with spreadbets it costs you to leave the position open overnight. So what happens if the market moves another 0.5% against you? Do you still hold? All your money is gone and the spreadbetting company is on the phone looking for more cash (the dreaded 'margin call') Shares and markets regularly move by much more than 1% in a day and move 'irrationally' so spreadbetting is playing with fire unless you have very deep pockets and know when to take a loss.

So if you can afford to buy the actual shares, then you dont need to spreadbet. And if you cant afford to buy the actual shares but chose to spreadbet, you dont have the deep pockets to be doing it safely.

In any case its actually easy to lose more than your original stake. So its more dangerous than any other form of gambling.