Stock market dealing

[kingandy2nd]

Thanks for the guidance @Justin Passing , I appreciate the time you’ve taken to write it out.

I think that you highlight the concern that I (and probably others) have is that when you start out it is your real savings and if you lose that bit (before you’ve cleared a decent profit to the trade fear free with) then it’s game over. And you’re using your actual savings when your least experience!

I have been playing with T212 fake money, starting with 5k in the Invest fund and £50k in the CFD.

I’m marginally up across the portfolio but would have been better if I’d not lost £3k on some energy stock that was just trending down and down.

I cant work out how/if you can short on T212, and I think I was setting the stop loss too short as I trigged a few loses within minutes of placing order only for the stock to bounce back later.

Most of my picks weren’t scientific, sometimes from alerts the app was sending me or looking at the top movers in the day. So gains were more luck than judgement, but I was doing what you mentioned previously about looking at the channel/trends and avoiding anything on a general downward trend.

I think my main issue is that I don’t have time to watch the prices or listen to the investor news channels (as I run my own business). I do like the idea of dabbling though and what you’ve suggested in your last post about doing something like that in the evening just watching the rises and falls is sensible given the time available.

I’ve got about 5k in crypto as I stuck about a grand in when bitcoin and doge coin were at their lowest…so I guess that could be considered my risk free gambling pot.

Thanks for the pointer on eTorro too, I’ll give it a try.

 

[Arbu]

You would if you could operate spread-betting inside an isa. AFA I know you can't - nor CFD which is same leverage as SB. You could take it out of the ISA but you couldn't put it back in again. So it's handy to be left there.

Why do you want it in an ISA though? Spread-betting is tax free https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim22015

 

[Justin Passing]

@kingandy2nd Writing it out reinforces it so it's all good. If you had to write an instruction book, you really have to be clear what you're doing, sort of thing.
Well done for having a go on the simulator. Easy to get wins on there, then something you weren't watching takes a slug from you.
That's what you must expect if you just "try " things.
Yes, stop losses are a mixed blessing, or a necessary evil, or something in between.
There's no formula I know of for getting it right. It'll always be wrong, but it can be very wrong if you don't used the damned things.
"Trading" is easier, in that you plan the trade, and selling is part of ithe plan, and having a price where it's failed an you need to sell, is too.

Most of the time, you're looking to see what the Trend is. Get it clear that you know what a trend looks like. A trend up is higher highs and higher lows.
Loads on the net, at Investopedia and whatnot

That's here: https://enrichmoney.in/knowledge-center-chapter/what-a-trend-in-technical-analysis.

There are various words to describe the same things. Like you could draw a Channel going up, sideways and down, on that.
The black part is called Consolidation, where buyers and sellers aren't really doing anything much, The price there is oscillating because of the positive feedback thing - people and bots buy because the price is going up which pushes the price up, then the reverse takes over.

On the blue side, you aim to buy when the price hiyts the straight line underneath - or just after it. "Just after it" is safer because you'll have see confirmation, but also reduces your gain. The Spread gets involved when the price changes direction. It often goes wide, reducing your gain again.

Once more about whether to bet with or against the trend:

If you buy WITH, at black "Buy", and you miss the sale at Green oval, you can just wait, holding the position, which may look negative for you, until the price is above the green line again.

If you try going against the trend, as atthe black square, and you miss the sale at pink, you're bust, because the price is never going to come back for you. IT MIGHT, on the next swing, maybe 10 times the time period later. Holding on for those ten time periods is where people make big losses ig they decide it's not going to come back intheir lifetime. It's uncomfortabe to hold on all day, or overnight, because you can never be sure about anything.
[In that Microstrategy thing a couple of posts back, I was on the hump in the afternoon at say 365, then the price went down to 325. I was fearing it was going to 300, making a loss of 65 , but it came back up to 444. put "000" on the end of those numbers - getting a bit serious. I was LUCKY after that, in that it went on down. Later it WAS up again, 500+, before going down by 160.
BItcoin is trending up, (Mstr normally gets pushed by it), so I was on a fair bet that the price would come back up fairly soon. I could say I wish I waited for the 500+, but now, whaddaya know, there's reports of malaccounting at Mstr so the price is falling.]

When the price is on the "sideways Trend" that's called Ranging. That can be good, as I've shown a couple of times, but ONLY if the spread is narrow - say the thickness of the line. If It's wider, a third or half the range height, you can't trade there.

---
Here endeth the lesson, next is about LEVELS but a final consideration, should you enter Long here?? It's going up, right??

NO you wouldn't, because that's one of those long top wick candles, which is likely to be followed by a dip, and you'd be buying at the top of a rise. So 2 reasons not to. (= confluence). It might go on up, but the chance of the next candle being lower is high.


Then if you look wider timeframe:

you can see the price has come off a LEVEL where it was Consolidating. It has just come down from the bottom of the Channel that Consolidation Range was in, so we're in a dip, right? time to buy?
You would WAIT to see if the price BROKE into that range again, or dropped in a new one. WOUld you?

Now, suppose I tell you that SMR (Small Modular Reactors) has risen 300% in the last 2 months, and if you step back, you see this:

It's at the top of a rising channel. You would probably "get a fill" with an order to buy at 27.50, but it could carry on at the top of the rising channel.
So, what to do?? This thing looks like it's going up. 60 by Xmas??

As it's a weekend and I have a new pot to pis put some money it, I bought £1k, along with some other runners. AND I left a buy order for £3k at 27 and one at 25.5. I wouldn't be surprised if it doesn't dip much at all in the near future

Advice to you, might be to wait for a dip, which could come in a couple of days from now. Or....

--------

In fact I just looked at a screener, and put a bit in each of several stocks which have gone up strongly in the past 12, 4 and 1 week. We'll see. I might even get Excel out and graph it.

 

[Justin Passing]

Got your money in a BUILDING SOCIETY???
WHY??

You'll be at the rate of the grey line, Aberdeen cash, on this graph.
I'm not using that at the moment.... One month:

Another account. this Friday.:

(red means nothing there)
So that one needs 3 days like that to match the Bldg Soc's yearly return, which would be around 0.021% a day(250 days).
It a/c has been around those numbers for a little while now.

 

[Justin Passing]

Why do you want it in an ISA though? Spread-betting is tax free https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim22015

Don't you pay swap rates on IG SB accounts? If not, great!

 

[Arbu]

Don't you pay swap rates on IG SB accounts? If not, great!

Don't know. For a £13 position on gold (per one dollar) I paid

20Nov24
02:57:26
Daily Financing Adjustment - FX Interest for 1 day Spot Gold £4.90
20Nov24
03:00:30
Daily Admin Fee - FX Interest for 1 day Spot Gold £0.94

I don't know how this compares to elsewhere.

 

[Justin Passing]

Errrm, Spot gold is £2170
Is that £1 a point so £2170 x13 x 100 = 2821k?

From then on, I don't know what they're charging. I had a short look at IG rates. They don't explain what they mean very well.

 

[Justin Passing]

I cant work out how/if you can short on T21

2 ways. In Invest and Isa you can use "negative" ETFs, They can be -1x, -3x, and variants.
Try them in the sim and if you win on one, pa yourself on the back. Thay aren't "liquid" enough, the spreads are wide.
It's a good discipline to always use LIMIT orders, but vital on leveraged anything. If you do a "market" order, you can pay 3% too much.
For Nvida it won't make any difference...
The main way to short is to use a "margin" account. Look em up. The CFD part is one of those. SHort long makes no difference,
More people apparently lose money on CFD, but it shouldn't be any different.
Trying not to get too side tracked here,

The rub with margin acounts is they'r sort of lending you money. If you leave the position open overnight, you pay interest. It's called a swap rate.
T212 and eToro's rates are very high - like credit card rates.
It's ok for a day or two though.
The leveraged things are better if you want to short longer term, but that's fairly unusual. They all have to make money somewhere. Some firm's swap rates are base rate + 3% per annum, rather than 30% or watever T212's is now.

If you DO venture into CFD, find and set "single click sahare dealing". You get a little box onthe screen where you can preset 1 or 0.001 or whatever shares, The default if you just click "buy" are horribly, ridicuously high. You can act in haste and have a disaster. You won't immediately recognise how much you're risking if it's something unusual.

From what arby says his platforms minima are high.
T212's minima are often very low
Here- buy 30 cents worth of a stock:, 0.01 x $30.

More often that would be more. There's one I forget where it's 5 shares of a $45 stock, for example.. I often put tiny orders in so the price is on the watchlist.
To quickly see the minimum on CFD, click where that 0.01 is, then the C to make it 0, then +. That's usually the minimum. The actual figure is in "instrument details". Often it's 1 or 0.1 share.

 

[Arbu]

Errrm, Spot gold is £2170
Is that £1 a point so £2170 x13 x 100 = 2821k?

From then on, I don't know what they're charging. I had a short look at IG rates. They don't explain what they mean very well.

No, as I say, it's calculated per dollar. So if the price goes up one dollar and you have a £13 position, you make £13. So it's as if you have invested £13*2700. Margin requirement is 5% of that.

 

[Arbu]

More people apparently lose money on CFD, but it shouldn't be any different.

Could be true. If you invest £6000 and it goes down to £5900 you won't think too much of it. If you take out a CFD and it's showing minus £100 you might get rattled by this and decide you need to get out. In either case whatever your reasons for buying were, they probably won't have changed.

 

[Justin Passing]

An aside, but to any reader, be warned, what seems obvious as a "£13 trade" to one person in one system can mean nothing in another.
Worth a hashtag #Warning !

T212 did, probably still do. make a lot of money from the presumptions people make, I'm sure they do it on purpose.
They are basically dishonest. They have ridiculous and unfair clauses and expressions in their terms, all vagueness to their advantage. What they consider is standard, is often against the advice you'll get just about anywhere. High costs are only expressed as tiny numbers, etc.

If you are using Trading 212's CFD platform , let's say you look at the Nasdaq, index. You get the futures if you tap in "100" which is close enough.
The leverage is 20:1 because it's an index.

If you have a fairly modest pot of £5000 and click Buy, it suggests you buy 2.5 shares.
That 2.5 looks like quite a small number, but it's $50,000 of stock, because it's at about 20k.

Are you going to be a wuss and pull out if it drops 1%? Maybe not?
How bad would a drop of 2% be? That's not rare for a daily move.

You have 50,000 worth. Down 2% is 49k
You have lost 20% of your money. You have to make a GAIN of 25% to get it back.

The common advice is not to use more than say 1-5%, say 2% of your pot on one trade. There are many rewordings of that, but buying 50k of stock when you only have 5k, is a heck of a lot more than the 2% of 5000 = £100 in common advice. It's true you can now select a much smaller amount, butthis is supposed to be a beginner's platform.

The other thing to know about is the Spread, the buy- sell difference
Take $META platforms, That's Zuckerburg's stuff. Spread is between atm say 578 - 579, it doesn't look much.
It's much wider when the main market is closed (and you're trading outside normal hours), but look how long it'll take you to "clear the spread" here (now)


(0.1 shares, showing here, is that minimum "size" ).

All the time theprice isinside the space between Buy and Sell, you're losing.

When the price goes or down, the spread widens against you always.
The REAL you get may not be shown, they have weasel words to make excuses for that. If the Ask (the price you pay when buying) is shown as 100, don't be surprised if you get 101 even if the chart never shows that.

If there's only one price shown, such as in the Invest or ISA platforms on T212, it doesn't necessarily mean much. With "illiquid" stocks, or things like leveraged shares, it may say 100 but you pay 105, which imho is little short of fraud. Spread is not shown. That's the way the East European setups seem to do things. So you HAVE to use a Limit order, so you specify a max, of perhaps 101 or 102.
Of course it's illegal for them to say the actual price was 105 in the last half minute and sell to you at that even though it's now 100.5 which they can buy at making 4.5%. So they wouldn't do that, would they. If it were just chance, you would sometimes get a price of 96. But that never happens unless the price vsibly falls. Funny, that.


Better brokers offer you a price, perhaps 100.1234, and give you 10 seconds to accept it during which time they will honor it, , after which it may not be available.
So there's a another #WARNING !

 

[Justin Passing]

No, as I say, it's calculated per dollar. So if the price goes up one dollar and you have a £13 position, you make £13. So it's as if you have invested £13*2700. Margin requirement is 5% of that.

In CFD terms, you buy a number of contracts, ie a number of shares, so it's a different way of putting things.
OK for your 13 x 2700 = £35,100 invested. You pay £5.84 a night, right?
That's say 5.84 x 365 = 2131 = 6% pa which is fine
That's say 5.84 x 365 = 35100
I'm again not sure what they mean - they say "FX Interest for 1 day" which sounds wrong. You pay Foreign Exchange fee once, to convert from £ to $, so it's not "per day". ??


Anyway, is that right?? I often get silly maffs wrong.

T212

so for 13 shares long you pay (I think the number is in £)
13 x 1.118148 = £14.53 per night = £5303 in a year on ($35100=£27857) which is NINETEEN percent which is a RIP OFF by Trading 212.

.Now, since 14 nov, Gold is up 6.77%

Leveraged GLD3 is up 22% but dog knows what prices you would have got
from this mess.:

3LGO is up 19%

Buying on T212 at 20:1 would have got you (6.77 x 20) %
= 135% (would be same on IG as same leverage/margin)
But T212 would have charged you
The overnight/ swap rate is 0.05% per day x9 =~ 0.45% where IG would be neare 0.13% or so.

INteresting. Even T212 CFD beats the cr@p out of the leveraged thing.

ANd - a normal stock, at 5:1. would have done too.

---
eToro is also ambiguous.
If I use $100 to buy gold at 20:1, overnight fee, it says is 0.50c.
So That's 0.5 on $2000 of gold.
which is 0.025% per day which is 9% pa, which isn't too bad. I suppose.

I have a balance in eToro, 20k of Au could be ok.

"They" say silver should be rising .. Interesting.

 

[Justin Passing]

On gold, a NB in the background is that Trump/Loomis want to use BTC as part of the fed reserve, which would mean selling gold.

That would be bearish.....!

 

[Justin Passing]

ATOS France currentlysqueezing. Fr gov buying it.

 

[Arbu]

On gold, a NB in the background is that Trump/Loomis want to use BTC as part of the fed reserve, which would mean selling gold.

That would be bearish.....!

Loomis? I don't think Trump has actually suggested selling gold, has he? According to the FT, this new Treasury Secretary is quite anti-tariffs, so that would be anti-inflationary, so that's a reason for gold to go down. I'm out of it now, anyway.

Edit: I'm not sure that I'm that persuaded by what the FT is saying.