Day trading question, also etoro

gwebstech

maxsteam said:

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.

im sure hes got an ulterior motive, but its the theory im interested in, not him specifically.

underground99

gwebstech said:

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. ,

Why can he make a profit trading some FTSE 100 shares but not others? Which FTSE100 shares do not have a 'reward' for trading them sand selling them for more than you paid?     

Over the long term, some shares will grow more than others and you can seek out the ones with long term prospects of growth or income, accepting whatever volatility comes with it. But short term 'day trading' anything can happen.  The more volatile ones would give better chance for short term gain so may be preferred by traders; volatility is the trader's friend. but likewise have an inherently higher chance of short term losses.

As long as he doesnt sell them, hes not losing any money

This is something people tell themselves to make themselves feel better after buying something and later finding it's not worth as much as they paid for it. Your assets reduce in value, you have lost some of your net worth even if you tell yourself it will come good in the end because you hope it will eventually gain more than it just lost.

And if as you said earlier he is aiming to make money by trading on margin and selling the shares again before the original purchase comes due for settlement, he will have to either sell them and take the loss, or fund the investment which has gone down in value with his own money; neither are favourable outcomes.

gwebstech

maxsteam said:

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.

How does the platform make money if using CFD? only on commission charges?

gwebstech

underground99 said:

gwebstech said:

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. ,

Why can he make a profit trading some FTSE 100 shares but not others? Which FTSE100 shares do not have a 'reward' for trading them sand selling them for more than you paid?     

Over the long term, some shares will grow more than others and you can seek out the ones with long term prospects of growth or income, accepting whatever volatility comes with it. But short term 'day trading' anything can happen.  The more volatile ones would give better chance for short term gain so may be preferred by traders; volatility is the trader's friend. but likewise have an inherently higher chance of short term losses.

As long as he doesnt sell them, hes not losing any money

This is something people tell themselves to make themselves feel better after buying something and later finding it's not worth as much as they paid for it. Your assets reduce in value, you have lost some of your net worth even if you tell yourself it will come good in the end because you hope it will eventually gain more than it just lost.

And if as you said earlier he is aiming to make money by trading on margin and selling the shares again before the original purchase comes due for settlement, he will have to either sell them and take the loss, or fund the investment which has gone down in value with his own money; neither are favourable outcomes.

theres no money buying cheaper stocks using that strategy,  hes obv only buying stocks where a few p increase will make him a few £100. Im sure what he buys is the art of it, in theory yes he could lose, anyone on stocks and shares can, but they obv have to factor that into what theyre doing, its all part of the risk isnt it

underground99

gwebstech said:

underground99 said:

gwebstech said:

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. ,

Why can he make a profit trading some FTSE 100 shares but not others? Which FTSE100 shares do not have a 'reward' for trading them sand selling them for more than you paid?     

Over the long term, some shares will grow more than others and you can seek out the ones with long term prospects of growth or income, accepting whatever volatility comes with it. But short term 'day trading' anything can happen.  The more volatile ones would give better chance for short term gain so may be preferred by traders; volatility is the trader's friend. but likewise have an inherently higher chance of short term losses.

As long as he doesnt sell them, hes not losing any money

This is something people tell themselves to make themselves feel better after buying something and later finding it's not worth as much as they paid for it. Your assets reduce in value, you have lost some of your net worth even if you tell yourself it will come good in the end because you hope it will eventually gain more than it just lost.

And if as you said earlier he is aiming to make money by trading on margin and selling the shares again before the original purchase comes due for settlement, he will have to either sell them and take the loss, or fund the investment which has gone down in value with his own money; neither are favourable outcomes.

theres no money buying cheaper stocks using that strategy,  hes obv only buying stocks where a few p increase will make him a few £100. Im sure what he buys is the art of it, in theory yes he could lose, anyone on stocks and shares can, but they obv have to factor that into what theyre doing, its all part of the risk isnt it

It seems like you fundamentally misunderstand how stocks work. 

If you open up a position worth £50k, a 1% movement in the price of the company will make you £500.

It doesn't matter if that company is priced at 43p or 3230p.  If the price changes by 1%, you will make 1% times the amount of money you committed to the trade. 

A 1% movement on Diageo stock priced at 3230p is 32.3p.  A 1% movement on Lloyds stock priced at 43p is 0.43p.  Both the Diageo going up 32.3p or Lloyds going up 0.43p will make you £500 if you have risked £50000 on the trade.  It is not fundamentally any more likely that Lloyds will go up by 0.43p sooner than Diageo will go up 32.3p just because it is a lower number of pence. Both would represent an improvement of their overall stock market valuation by 1%.  

gwebstech

underground99 said:

gwebstech said:

underground99 said:

gwebstech said:

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. ,

Why can he make a profit trading some FTSE 100 shares but not others? Which FTSE100 shares do not have a 'reward' for trading them sand selling them for more than you paid?     

Over the long term, some shares will grow more than others and you can seek out the ones with long term prospects of growth or income, accepting whatever volatility comes with it. But short term 'day trading' anything can happen.  The more volatile ones would give better chance for short term gain so may be preferred by traders; volatility is the trader's friend. but likewise have an inherently higher chance of short term losses.

As long as he doesnt sell them, hes not losing any money

This is something people tell themselves to make themselves feel better after buying something and later finding it's not worth as much as they paid for it. Your assets reduce in value, you have lost some of your net worth even if you tell yourself it will come good in the end because you hope it will eventually gain more than it just lost.

And if as you said earlier he is aiming to make money by trading on margin and selling the shares again before the original purchase comes due for settlement, he will have to either sell them and take the loss, or fund the investment which has gone down in value with his own money; neither are favourable outcomes.

theres no money buying cheaper stocks using that strategy,  hes obv only buying stocks where a few p increase will make him a few £100. Im sure what he buys is the art of it, in theory yes he could lose, anyone on stocks and shares can, but they obv have to factor that into what theyre doing, its all part of the risk isnt it

It seems like you fundamentally misunderstand how stocks work. 

If you open up a position worth £50k, a 1% movement in the price of the company will make you £500.

It doesn't matter if that company is priced at 43p or 3230p.  If the price changes by 1%, you will make 1% times the amount of money you committed to the trade. 

A 1% movement on Diageo stock priced at 3230p is 32.3p.  A 1% movement on Lloyds stock priced at 43p is 0.43p.  Both the Diageo going up 32.3p or Lloyds going up 0.43p will make you £500 if you have risked £50000 on the trade.  It is not fundamentally any more likely that Lloyds will go up by 0.43p sooner than Diageo will go up 32.3p just because it is a lower number of pence. Both would represent an improvement of their overall stock market valuation by 1%.  

I understand that, what i said is true, hes generally buying stocks around a similar price. Usually goes for £3-500 profit. Hes not going for 1% though, hes going for a few pence increase which could be a fraction of a %.

underground99

gwebstech said:

underground99 said:

gwebstech said:

underground99 said:

gwebstech said:

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. ,

Why can he make a profit trading some FTSE 100 shares but not others? Which FTSE100 shares do not have a 'reward' for trading them sand selling them for more than you paid?     

Over the long term, some shares will grow more than others and you can seek out the ones with long term prospects of growth or income, accepting whatever volatility comes with it. But short term 'day trading' anything can happen.  The more volatile ones would give better chance for short term gain so may be preferred by traders; volatility is the trader's friend. but likewise have an inherently higher chance of short term losses.

As long as he doesnt sell them, hes not losing any money

This is something people tell themselves to make themselves feel better after buying something and later finding it's not worth as much as they paid for it. Your assets reduce in value, you have lost some of your net worth even if you tell yourself it will come good in the end because you hope it will eventually gain more than it just lost.

And if as you said earlier he is aiming to make money by trading on margin and selling the shares again before the original purchase comes due for settlement, he will have to either sell them and take the loss, or fund the investment which has gone down in value with his own money; neither are favourable outcomes.

theres no money buying cheaper stocks using that strategy,  hes obv only buying stocks where a few p increase will make him a few £100. Im sure what he buys is the art of it, in theory yes he could lose, anyone on stocks and shares can, but they obv have to factor that into what theyre doing, its all part of the risk isnt it

It seems like you fundamentally misunderstand how stocks work. 

If you open up a position worth £50k, a 1% movement in the price of the company will make you £500.

It doesn't matter if that company is priced at 43p or 3230p.  If the price changes by 1%, you will make 1% times the amount of money you committed to the trade. 

A 1% movement on Diageo stock priced at 3230p is 32.3p.  A 1% movement on Lloyds stock priced at 43p is 0.43p.  Both the Diageo going up 32.3p or Lloyds going up 0.43p will make you £500 if you have risked £50000 on the trade.  It is not fundamentally any more likely that Lloyds will go up by 0.43p sooner than Diageo will go up 32.3p just because it is a lower number of pence. Both would represent an improvement of their overall stock market valuation by 1%.  

I understand that, what i said is true, hes generally buying stocks around a similar price. Usually goes for £3-500 profit. Hes not going for 1% though, hes going for a few pence increase which could be a fraction of a %.

Right, but his logic of 'buying stocks around a similar price' does not make any sense as an investment or trading strategy, as companies with similar 'price per share' will have very different valuations and levels of volatility, so if he is offering tips or guidance on how to get started in trading it doesn't seem like he is doing it very well, or perhaps you are misunderstanding.

maxsteam

gwebstech said:

How does the platform make money if using CFD? only on commission charges?

There's a spread. For example BP was bid 301.2p, offer 301.3p recently. One person sells at 301.2p, another person buys at 301.3p and there's 0.1p per share for the market makers and/or the broker to share. The spread can add up to a sizeable amount if lots of people are trading and, as everything is automated, there's not much work to do for the money. CFDs do not need to be traded through the market so the broker can, within reason, cover some of the the transactions themselves. Sometimes the market makers will offer a broker a share of the spread or some other payment if the transactions goes through the stock market.

I believe that Plus500 handle 100% of their trades themselves so Plus500 make a profit when their customers make a loss. I won't deal with Plus500 for this reason as they have a motive to encourage their customers to lose money.