Day trading question, also etoro

gwebstech

leonj said:

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.

theres some idiots on there that trade forex and try to convince people they are millionaires when they clearly are not, they are obviously depserate for followers etc but so fake its obvious

gwebstech

maxsteam said:

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.

Yes i assumed he was aiming for about 1% but i think its less than that, he just aims for a profit he says, he doesnt get too greedy.

And i d worked out that you have to invest several £1000 to be making a profit doing these trades as the trading fee alone would be a big chunk of money if only investing a couple of £1000. Yu could make £30 say on £2k ish but then have 2 trading costs to pay out of that.

DoctorStrange

gwebstech said:

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

You've not been fascinated, you've been seduced.

Nobody, absolutely nobody, can consistently achieve the returns these guys claim using these strategies. If they could, they'd literally be billionaires.

Day trading is gambling,  end of. 

Think of it this way - if my YouTube tip to you was to take £1 and stick it on red or black, you can double your money. Reinvest your money19 more times and you're a millionaire!

All you need to do guess correctly each time, and each time you've got just under a 50% chance. Now it's unlikely you'll do this first time,  but remember you're only losing £1 each time so you can afford to lose many times. You can try ten thousand times and still be £990,000 in profit!

You see how convincing an argument can be made? You cannot fault the maths and it's easily demonstrable using examples.

But we all know these gambling strategies don't work.

Now replace red/black with Amazon or Tesla, Bitcoin or Gold, FTSE or S&P and you'll start to see the similarities.


If I were you, I'd work backwards from your objectives. What is it you want? How much effort do you want to put in to achieve that? What do you need to get started?

And remember, if it looks too good to be true,  it's too good to be true...

csgohan4

you could always lurk on the Butcoin threads, I'm sure they would be more than happy to tell you that Butcoin is the next best thing to invest in and you can get 500k easily. 

benbay001

In what world does him being old and being reluctant to answer questions make the strategy more legit?

His reluctance to answer questions should be a red flag if anything.

underground99

gwebstech said:

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.

But it doesn't make any sense whatsoever to always buy in blocks of 10,000 shares.

BP shares are 303p. So a 10000 share position is about £30k. If the company goes up in value 1%, its share price goes up 3p and you can bank about £300 less commissions.

Lloyds shares are 43p. Your 10000 share position is only £4.3k. The banking group has to go up in value 7% (go from being a £30bn company to a £32bn company) for its price to rise 3p and for you to make the £300.

Diageo shares are 3230p. A 10000 share position is over £320k. The share price only has to tick up or down by less than 0.1% (which can happen in seconds) for you to gain or lose the £300.

It seems a complete nonsense to always use the same investment size because after getting the hard won victory of Lloyds going up 7% and BP going up 1%, you would lose more than those amounts combined if your Diageo position went down just 0.2%. No trading strategy involves risking only £4k in Lloyds, £30k in BP, and then £320k in Diageo and £740k in AstraZeneca just to be consistent with how many shares you buy on each trade.

He is surely doing this 'just for show' as an instructional video rather than really trading like that. People can't make a living trading with a garbage approach to money/bankroll management and risk. Or you are fundamentally misunderstanding what you're seeing.

 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

I suggested he was using CFDs or spread bets as the only feasible ways to avoid stamp duty. The standard HL Vantage accounts don't offer that at all, or even give decent live charting for traders. If you say he's getting the prices and placing CFD trades or spreadbets with HL he can only be doing it through HL Markets, which is just a white-labelled version of the IG.com service. They are no longer taking on new customers.

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

From what you've explained so far it does sound like he might be full of it, or you're missing some of the concepts.

maxsteam

The key to successful trading is to buy at a lower price than you sell. Some people do this by holding shares for a year or more, some people do it by holding shares for an hour or two. Yes, it's possible to make money day trading but it's not easy. I will post details of my test drive of trading CFDs at Fineco in due course. I have essentially been glancing at the chart and the spread, other than that the trading has been pretty random. I am certainly not doing the level of research that I would do if large sums were involved. At Friday's close I was 34p down on funds of £200.

There are lots of people who talk with confidence about how to make money. Sometimes they are selling a book. Sometimes they are trying to steal. There's nothing wrong with anyone having a go at making money but it is important to know that, however much confidence is shown by the person you follow, it is easier to lose money than to make it.

I know what I will do if I make a fortune day trading and it won't be spending my days creating videos for TikTok.

gwebstech

underground99 said:

gwebstech said:

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.

But it doesn't make any sense whatsoever to always buy in blocks of 10,000 shares.

BP shares are 303p. So a 10000 share position is about £30k. If the company goes up in value 1%, its share price goes up 3p and you can bank about £300 less commissions.

Lloyds shares are 43p. Your 10000 share position is only £4.3k. The banking group has to go up in value 7% (go from being a £30bn company to a £32bn company) for its price to rise 3p and for you to make the £300.

Diageo shares are 3230p. A 10000 share position is over £320k. The share price only has to tick up or down by less than 0.1% (which can happen in seconds) for you to gain or lose the £300.

It seems a complete nonsense to always use the same investment size because after getting the hard won victory of Lloyds going up 7% and BP going up 1%, you would lose more than those amounts combined if your Diageo position went down just 0.2%. No trading strategy involves risking only £4k in Lloyds, £30k in BP, and then £320k in Diageo and £740k in AstraZeneca just to be consistent with how many shares you buy on each trade.

He is surely doing this 'just for show' as an instructional video rather than really trading like that. People can't make a living trading with a garbage approach to money/bankroll management and risk. Or you are fundamentally misunderstanding what you're seeing.

 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

I suggested he was using CFDs or spread bets as the only feasible ways to avoid stamp duty. The standard HL Vantage accounts don't offer that at all, or even give decent live charting for traders. If you say he's getting the prices and placing CFD trades or spreadbets with HL he can only be doing it through HL Markets, which is just a white-labelled version of the IG.com service. They are no longer taking on new customers.

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

From what you've explained so far it does sound like he might be full of it, or you're missing some of the concepts.

Hes only buying shares where he can make a profit, some of the ones you mention he wont buy as theres no reward. As long as he doesnt sell them, hes not losing any money, admttedly he must have a big pot to be able to afford to play like that

gwebstech

DoctorStrange said:

gwebstech said:

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

You've not been fascinated, you've been seduced.

Nobody, absolutely nobody, can consistently achieve the returns these guys claim using these strategies. If they could, they'd literally be billionaires.

Day trading is gambling,  end of. 

Think of it this way - if my YouTube tip to you was to take £1 and stick it on red or black, you can double your money. Reinvest your money19 more times and you're a millionaire!

All you need to do guess correctly each time, and each time you've got just under a 50% chance. Now it's unlikely you'll do this first time,  but remember you're only losing £1 each time so you can afford to lose many times. You can try ten thousand times and still be £990,000 in profit!
eing seduced,
You see how convincing an argument can be made? You cannot fault the maths and it's easily demonstrable using examples.

But we all know these gambling strategies don't work.

Now replace red/black with Amazon or Tesla, Bitcoin or Gold, FTSE or S&P and you'll start to see the similarities.


If I were you, I'd work backwards from your objectives. What is it you want? How much effort do you want to put in to achieve that? What do you need to get started?

And remember, if it looks too good to be true,  it's too good to be true...

Im not being seduced because im not buying anything, hes irrelevant to me. Its the theory im interested in, hes not saying he qwins all the time, but if he doesnt sell the shares hes bought how can he lose money?

obv stocks lose money sometimes, but i mean bar a crash

gwebstech

csgohan4 said:

you could always lurk on the Butcoin threads, I'm sure they would be more than happy to tell you that Butcoin is the next best thing to invest in and you can get 500k easily. 

I invested in crypto 3 or 4 years ago, i didnt do it because of any hype, i just threw a bit of spare money at it and am leaving it for 10 years or so to see how it goes. Blockchain technology is going nowhere, its already being used in some big enough organisations, people are entitled to their opinion on whether crypto is a fools game or not