Day trading question, also etoro

Thrugelmir

gwebstech said:

Thanks for the replies, hes an old guy, he doesnt strike me as full of sht, hes not saying anything like i can make you rich etc. It seems more along the lines of follow me and watch how i do it, hes been doing it a long time, he only ever buys 10k shares at a time, just to make it easier to work out his profits.

Surely if you identify an opportunity you'd exploit if fully. Rather than restrict an investment to a round £10k just to keep the maths simple.  Staring at a screen sounds like somebody addicted to gambling on a fruit machine. Keep placing stakes and pushing the button. 

Grenage

People who are have a genuinely solid way of making money don't generally post videos telling everyone else what to do - unless what they are doing doesn't really work and they're after ad revenue or an upsell.

70-80% of people lose money on CFDs, so you'd need a compelling reason to think you'd do better than most.

gwebstech

moneysavinghero said:

hes not selling anything, just offering a few tips on how he does it

He has made you consider day trading. If you go ahead, which it seems like you will, then you will be making the spread betting companies money (spread betting is the easiest way to avoid stamp duty). If he is genuinely good at what he does then maybe you will be making him money too - every trade needs someone at the other end, and an inexperienced trader makes making money easier.

People that show you how easy it is to make money are always selling something, even if it is not always obvious what they are selling.

He could also be trading FTSE AIM as no stamp duty on these but the spread tends to be too large to make day trading profitable.

Even if you only make 1% a day then yes that could add up to a lot. But what if you lose 1% a day then by your own admission that would add up to large losses. Can everyone make 1% a day profit?. No they cant, every winner needs a loser on the other end. Don't be that loser.

dont worry, i have no intention of doing naything yet until ive learned all about it, even if that takes years. I do property but that doesnt get easier as you get older and i need to think ahead

gwebstech

Thrugelmir said:

gwebstech said:

Thanks for the replies, hes an old guy, he doesnt strike me as full of sht, hes not saying anything like i can make you rich etc. It seems more along the lines of follow me and watch how i do it, hes been doing it a long time, he only ever buys 10k shares at a time, just to make it easier to work out his profits.

Surely if you identify an opportunity you'd exploit if fully. Rather than restrict an investment to a round £10k just to keep the maths simple.  Staring at a screen sounds like somebody addicted to gambling on a fruit machine. Keep placing stakes and pushing the button. 

10k shares, not 10k in money

gwebstech

Grenage said:

People who are have a genuinely solid way of making money don't generally post videos telling everyone else what to do - unless what they are doing doesn't really work and they're after ad revenue or an upsell.

70-80% of people lose money on CFDs, so you'd need a compelling reason to think you'd do better than most.

i dont think i would do better, any money i have i hold onto tightly. Im just fascinated by this

Alexland

gwebstech said:

i have no intention of doing naything yet until ive learned all about it, even if that takes years.

You will know when you have learnt enough to start because you won't want to do it anymore.

underground99

gwebstech said:

Thrugelmir said:

gwebstech said:

Thanks for the replies, hes an old guy, he doesnt strike me as full of sht, hes not saying anything like i can make you rich etc. It seems more along the lines of follow me and watch how i do it, hes been doing it a long time, he only ever buys 10k shares at a time, just to make it easier to work out his profits.

Surely if you identify an opportunity you'd exploit if fully. Rather than restrict an investment to a round £10k just to keep the maths simple.  Staring at a screen sounds like somebody addicted to gambling on a fruit machine. Keep placing stakes and pushing the button. 

10k shares, not 10k in money

While that keeps the maths simple (you know you can sell out of a quarter of your position by selling 2500 shares) it will produce some ludicrously different exposures.

For example 10,000 Lloyds Banking group shares at 43.66p costs you  £4,366.  Fair enough, if they go up by a percent you can make £43 minus about a tenner to buy and sell so that's £33. Less than that if you had to pay £21.83 of stamp duty.

However if you buy 10,000 Astrazeneca shares at £73.70 each, or or 10,000 Unilever shares at £41.59 each, that is £737k or £415k, and making a percent on that is a lot more money.

A ) There is no way he is actually doing his trading like that, alternating between £4k and £400k per trade depending on the price of the share, to 'always buy 10k shares at a time to keep the maths simple'. That is only going to be 'for show' to demonstrate how a trade works in an instructional video.  Is he really going to invest in 10,000 shares of Flutter Entertainment at £151 each and spend £1.5m on a transaction just to show a tiktok audience using numbers that 'keep it simple'?   

Lloyds is a bigger company than Flutter but has a share price of only £0.43 instead of £150 because there are a lot more shares in issue. The share price has no relation to the size of the company, so doing all your trades at the same number of shares regardless of the company involved would be ridiculous because you'd have some massive trades and some tiny ones, and making a 10% gain on a £4000 deal won't go anywhere near canceling out your 1% loss on the £700,000 deal.

B ) You say you think he does use HL and pays £5 a deal (which is the sort of pricing you get from them if doing more than 20 trades a month). But you also say when he's asked about stamp duty he says there isn't any. That's simply not possible if you are buying FTSE 100 companies if you are buying the actual shares on a mainstream platform like HL, rather than using CFDs or spreadbets.

So either

a) he's lying about there being no stamp duty to make it sound like he is making more profit than he really is...

b) he's not trading big name FTSE 100 stocks  like you said, but some much smaller AIM ones which don't have stamp duty...

c) he doesn't realise he's being charged stamp duty included in the contract note he receives because he is an idiot ; the limited live pricing data from HL which doesn't give tick by tick price history means that it's hard for him to notice that he paid half a percent more than he was hoping to pay when he decided to buy...

d) he's using a fantasy trading account which is not real money and is just standalone software, or just a 'practice account' on a real broker - which tracks the prices you bought and sold at with a trading cost per deal but doesn't bother giving you a stamp duty charge because it's not trying to be a true model of the UK stock market because it's not real...

maxsteam

gwebstech said:

Even if you make 1% a day that can add up to a large amount from a small investment, im just interested in finding out more to be honest.

1% per day is huge. With 253 working days each year, it equates to multiplying your stake by 12 in a year if you can average it every day. You should expect to lose money when you start. You should try not to lose but you should not be surprised if it happens while you are learning. That's why it's important to start with small amounts.

gwebstech said:

Whats the difference between CFD and margin trading?

So what forum would you recommend @maxsteam ?

A CFD is basically a share without stamp duty and without shareholder rights. Spread betting is very similar. In my opinion you should not get too worried about the difference between CFDs, spread betting and shares. Your first job is to find a platform and a product that you are comfortable with and where you can trade with low fees. While there is not a huge difference between CFDs, spread betting and shares, you should not be cajoled into one of these, or one particular market by the provider or by a guy on TikTok. I am currently test driving Fineco but I've not done enough to be able to recommend it. Fineco is an Italian bank that is offering accounts to UK customers.

If you were wanting to put £100 into shares and leave the investment for a year, I would not hesitate to recommend Degiro but, because of the stamp duty on UK shares, their platform is less suitable for day trading. If you have not traded in shares before, putting £100 into a FTSE company on Degiro would be a better first step than day trading.

I have looked at Freetrade.io but I don't like the way they promote their service as offering trading for free. There is always a spread and there is sometimes stamp duty and exchange costs when you trade. I feel that they are being dishonest but I appreciate that other people can forgive this as acceptable hype. I have not tried Trading212 or eToro. I have tried Saxo and they should be avoided. I will not try naga. HL is a reputable broker and, because they are a member of the London Stock Exchange, their trading platform is likely to be better and faster than brokers that are not full members of a stock exchange but, because of their fees, it would be difficult to make a profit on a £20 trade on HL.

Margin trading is trading with borrowed money. On Fineco, for example, I have deposited £200 and I can trade up to £1000 of CFDs without depositing any more money. It would be foolish to take advantage of the maximum facility, particularly if I had only £200 spare. If the markets moved against me, I would need to deposit more money or have my positions closed. There is a small finance charge for margin trading but it's dangerous because of the ease with which you can risk more than you can afford. Trading can be as addictive and as dangerous as a gambling addiction.

leonj

gwebstech said:

Hi all

Ive been watching a guy on TikTok doing some day trading, hes moving a lot of money about (supposedly). Hes trading on FTSE 100 stocks, a few people have asked him about stamp duty and he says there is none to pay. After reading up a bit i can see that stamp duty isnt payable on electronic trading, but i think SDRT is payable at 0.5%.

Is there any way to trade shares without paying the SDRT? I then came across etoro saying you can trade shares on there and they abosrb the stamp duty - how can they abosrb such a high cost? has anyone used them?

If this  guy is legit, hows he not paying it? hes not selling anything, just offering a few tips on how he does it

cheers

He is not legit, he might not be selling you anything yet, but he is building a following on social media and that is step 1 on how to make money from "day trading", "forex" etc.

gwebstech

underground99 said:

gwebstech said:

Thrugelmir said:

gwebstech said:

Thanks for the replies, hes an old guy, he doesnt strike me as full of sht, hes not saying anything like i can make you rich etc. It seems more along the lines of follow me and watch how i do it, hes been doing it a long time, he only ever buys 10k shares at a time, just to make it easier to work out his profits.

Surely if you identify an opportunity you'd exploit if fully. Rather than restrict an investment to a round £10k just to keep the maths simple.  Staring at a screen sounds like somebody addicted to gambling on a fruit machine. Keep placing stakes and pushing the button. 

10k shares, not 10k in money

While that keeps the maths simple (you know you can sell out of a quarter of your position by selling 2500 shares) it will produce some ludicrously different exposures.

For example 10,000 Lloyds Banking group shares at 43.66p costs you  £4,366.  Fair enough, if they go up by a percent you can make £43 minus about a tenner to buy and sell so that's £33. Less than that if you had to pay £21.83 of stamp duty.

However if you buy 10,000 Astrazeneca shares at £73.70 each, or or 10,000 Unilever shares at £41.59 each, that is £737k or £415k, and making a percent on that is a lot more money.

A ) There is no way he is actually doing his trading like that, alternating between £4k and £400k per trade depending on the price of the share, to 'always buy 10k shares at a time to keep the maths simple'. That is only going to be 'for show' to demonstrate how a trade works in an instructional video.  Is he really going to invest in 10,000 shares of Flutter Entertainment at £151 each and spend £1.5m on a transaction just to show a tiktok audience using numbers that 'keep it simple'?   

Lloyds is a bigger company than Flutter but has a share price of only £0.43 instead of £150 because there are a lot more shares in issue. The share price has no relation to the size of the company, so doing all your trades at the same number of shares regardless of the company involved would be ridiculous because you'd have some massive trades and some tiny ones, and making a 10% gain on a £4000 deal won't go anywhere near canceling out your 1% loss on the £700,000 deal.

B ) You say you think he does use HL and pays £5 a deal (which is the sort of pricing you get from them if doing more than 20 trades a month). But you also say when he's asked about stamp duty he says there isn't any. That's simply not possible if you are buying FTSE 100 companies if you are buying the actual shares on a mainstream platform like HL, rather than using CFDs or spreadbets.

So either

a) he's lying about there being no stamp duty to make it sound like he is making more profit than he really is...

b) he's not trading big name FTSE 100 stocks  like you said, but some much smaller AIM ones which don't have stamp duty...

c) he doesn't realise he's being charged stamp duty included in the contract note he receives because he is an idiot ; the limited live pricing data from HL which doesn't give tick by tick price history means that it's hard for him to notice that he paid half a percent more than he was hoping to pay when he decided to buy...

d) he's using a fantasy trading account which is not real money and is just standalone software, or just a 'practice account' on a real broker - which tracks the prices you bought and sold at with a trading cost per deal but doesn't bother giving you a stamp duty charge because it's not trying to be a true model of the UK stock market because it's not real...

He hasnt said its to keep the math simple, i just assumed thats why. He could be full of !!!!!!, but he sounds way too old to care about getting a massive following on social media. He doesnt spend time answering questions much so seems to me he doesnt care if people buy into him or not. Hes looking to make 3p per share for example, times that by 10k and it adds up.

He does show shares hes bought that havent gone up in several days, so hes not saying its all profit. As said below if hes effectively borrowing the money, and doing CFD stuff he doesnt pay stamp duty, there would be almost no point if he was paying that from what ive seen

Its just eye opening to me to see how some people make a living