tactical trader

The over indebtedness of many in the UK and USA only just seem to be hitting home with the media.

We are starting to see their awareness through shock headlines such as '1 million expected to file for bankruptcy'.

Now, anyone who reads around will have known this for ages and could see it coming - but, as ever the general populus are blind until shown the light by the press.

Hopefully nobody will have enough debt on here to be considering going bankrupt, but out of interest i thought i would post the contents of a recent marketing email i received from equifax.

5 bankruptcy facts everyone should know...

1. Bankruptcy is NOT an easy option
   It’s true that your bankruptcy could be discharged within 12 months but you may not be able to get credit again for up to 6 years. And even then you’re likely to pay a lot more to borrow money, because you represent a greater than average risk to a lender.

2. It actually COSTS money to go bankrupt
   You need £460 to cover court costs and the Official Receiver’s fee – and it has to be paid in cash.

3. You STILL have to pay your creditors even if you go bankrupt
   If you have any assets, such as a house, they may be sold to pay your creditors. If you are deemed to have more monthly income than you need to live on, some of the surplus may also be paid to your creditors for up to three years.

4. You CAN’T keep bankruptcy a secret
   Bankruptcy orders are published in the London Gazette and local newspapers. The information is also displayed on the Individual Insolvency Register – which is accessible on the internet – for a period of 3 months after you are discharged.

5. Your CREDIT file is affected for 6 years
   After bankruptcy you are likely to find it difficult to get credit – including a mortgage, loans, credit cards – even a mobile phone.

It's been a while since my last post - i've been extremely busy with work (which is good, now it's my own business).

This does mean i've been pulled away slightly from short term trading, and have just been checking my longer term plays - which thankfully are all doing very well thank you very much.

However, every day i read the news - and there are a couple (well, many) topics that continue to wind me up.

House Price Inflation

On a daily basis there are articles about how House Price Inflation (HPI) will never end.

I am starting to get a bit cheesed off with it all. Why? Well it may be coincidence, but it all reminds me of the early 2000's before the dot com went pop.

The articles have now got to the stage of using phrases such as 'new paradigms' and new models to support why prices should be so high.

The thing is, it all echos with a presentation i went to when i was at COMDEX in Chicago, back in 2000. Everything was jazzy and musical, with thunder clouds rolling in on the screen and 'new world paradigm' being drummed into your head. What happened next? Well we all know.

However, according to the media, property is different. Why? They don't really know, it just is. This kind of perpetuated hysteria and herd mentality must, at some point come crashing down.

I suppose the only question in my mind is how and when - not 'if'.

Personal Debt

There was an article in the Independent today commenting on how the nasty banks make £4bn a year from overdrafts - Link.

I don't know about you - but my response to this is 'so what?'.

At the end of the day, if people are using money that isn't there's then they should pay hefty amounts for doing it.

Effectively in using an overdraft they are taking money off the bank without asking - and that is their own fault.

Now, i can understand why the fees for the odd transgression may be unfair - and i think that this area should be tackled. If someone goes into the red and it is the banks fault, no charge should be levied.

However, for persistent offenders i think it is their own fault, and the charges should mount up exponentially. IF they still can't be bothered to stop spending then the bank should seize theirassets. Granted, it probably mounts up to just a pile of trainers and latest phones, but hey, ebay is calling!

It may sound harsh, but at the end of the day how else are people going to get it into their skulls that taking on debt that they can't pay off is bad.

If people realised this, banks wouldn't make so much profit out of these charges. People wouldn't get into debt, and the world would be a better place.

However, being the UK, steps are being taken to help these poor unfortunates that are unable to balance their monthly budget.

The report comes days before regulators are due to announce a crackdown on excessive overdraft charges and other unfair penalties that hit borrowers. The Office of Fair Trading is expected to announce its final decision next week on whether to impose a cap on penalty charges levied by banks and credit card lenders. It is expected to set a limit on the charges that lenders can make when borrowers fail to make credit card payments on time or exceed their overdraft limits.

Will people learn a lesson from this - no. They will just continue to get into more debt and persist with the blase attitude that debt doesn't hurt - when it should.

The level of financial ignorance in this country is shocking. But as ever the government is keener to hand hold those that never bother to learn, rather than those who are sensible.

And what does this all spell for the economy - in my opinion, another recession is round the corner and is another when rather than 'if'.

A swift blog entry to apologise for the lack of input from myself recently.

I am currently without a computer and without internet access! It's worse than being ill, and it's worse than being without your car. It's like losing a limb!

Anyway, all going well, i should be back up and hooked up online by next week..

On the CFD front i have opened an account with IG Markets Pro to have a dabble - looking good so far and in amongst my career strategising then i should have time to finish my write up before christmas!

The first port of call on my CFD account adventure is to look at the service providers offering direct access products.

The word on the street always seems to be that DMA is better for the active trader.

I will be looking at the non-direct accounts later, but for now I am finding as much information as I can about the DMA platforms.

So far I have found 3 providers that offer direct access CFD accounts - IG Markets, e-TRADE and GNI Touch.

This is currently a brain dump - at some point I will be tidying this up and knocking up some comparison tables.

The features of these accounts are outlined below.

IG Markets Pro

http://www.igmarketspro.com

Trading is based on actual market price, with IG taking commission on trades.

For UK stocks the commission is taken as a percentage, with a minimum commission per trade.

UK Stocks SETS 0.15% £10 minimum
UK Stocks non-SETS 0.15% £15 minimum

For US stocks the commission is in cents per share, again with a minimum commission.

US Stocks 4cents/share $15 minimum

For European and Australian stocks, it is also percentage based.

European stocks 0.20% €15 minimum
Australian stocks 0.20% AU25 minimum

Funding rates that apply will be the inter-bank offered rate for the currency that the trade is denominated in, plus/minus 2.5%. For example, a funding rate of LIBOR +2.5% will apply to long positions in UK stocks.

Personal accounts include following data feeds free:

LSE Level 2 data
NYSE Level 1 data
AFX News

There are various fees for additional exchange data.

Margin levels vary depending on stock type.

I can see neither monthly fees nor funding requirements.

e-TRADE CFDs

http://www.etradeprofessional.co.uk

Offer a 10% margin on a minimum deposit of just £3000 (or equivalent in EUR or USD).

E-TRADE offer two pricing structures - first is commission based:

UK Stocks SETS 0.2% £20 minimum
UK Stocks non-SETS 0.2% £20 minimum

For US stocks the commission is in cents per share, but handled slightly differently as it changes depending on the price of the stock.

US Stocks ($0 - $10) 3cents/share $19.99
US Stocks ($10 - $20) 4cents/share $19.99
US Stocks ($20+) 5cents/share $19.99

The second pricing structure is flat fee based:

FTSE 100 £9.95
FTSE 250 £9.95 + fixed spread of 4 basis points
European Shares £9.95 + fixed spread of 4 basis points
US Shares £9.95 + 2 cents per share
UK Indices £9.95 Flat-rate with fixed 2 point spread
European Indices £9.95 Flat-rate with fixed 3 point spread
US Indices £9.95 Flat-rate with fixed 5 point spread

CFD Long Overnight Positions You Pay: LIBOR plus 2.5%
CFD Short Overnight Positions We Pay: LIBID minus 2.5%

Level 2 Interactive is free to all E*TRADE CFD account holders.

GNI Touch http://www.gnitouch.com

GNI also offer two pricing structures - one for 'standard' traders and one for 'active' traders.

The main difference is active traders have a minimum £12.50 fee, versus £25, a commission of 0.2% versus 0.25% and don't incur platform charges. Standard traders must pay a platform charge, and both active and standard traders can select from additional feeds.

To be an active trader requires you to trade 15 times or more a month.

What next?

The next step is to pull out all the metrics of these offerings to compare them based on the figures. I will also have to look at the platforms themselves to perform a subjective analysis.

When I embarked on the 'I want to open a CFD account' trip then I never expected it would involve quite so much work to select an account!

Why bother? Because my CFD account and I will be spending significant time with each other over the coming months - so I need to be sure I pick the right one!

Another busy week, but i've made some progress with my CFD account hunt (which has now turned into me writing a brief article comparing them..)

I've Googled and combined information gleened from the IX Expo to come up with my shortlist of companies for me to look at.

These are:

Direct Access

• IG Markets Pro

• GNI Touch

• e-Trade

Non Direct Access (Synthetic/Abstract)

• City Index

• Barclays (I believe these White Label City Index)

• III

• IFX Markets (A cousin of FinSpreads)

• CMC Markets

• IDealing

For the sake of comparison then i'm going to look at all of them - their fees, and the platforms - and try to determine the best option for me.

On my initial look then the benefit of the Direct Access accounts seem to be the ability to trade the actual market - this is offset against the higher account opening requirements.

I'm still tabulating and seeking data, but further updates will come..

Tactical Trader were present at the IX Expo on Friday and Saturday. I got roped into helping on the Saturday - and to those of you I spoke to then it was a pleasure.

I also took the opportunity to walk around and take a look at the CFD providers.

I chatted with a few, and have picked up lots of information to wade through.

Time is something I seem to be lacking at the moment, but I am still working on my comparison and will publish it this week.

Hopefully when i've done it then it may be of some use to some of you in the position of wanting to trade CFDs.

Nothing much to report yet, but as the week progresses and i complete my research then i will post the results.

Basically, i'm going to open a CFD account, and will post my musings, research and decision here.

If anyone has any comments or suggestions over the best providers, add them as a comment to this blog post and i'll consider them when i'm writing my full article.

I doubt this will go down in any history books, but today is the first post in my first blog ever!

A bit of background to who I am, what I am about and why I am posting in this blog..

I have a full time job in a Management Consultancy firm (though this will soon be changing!) and I have been trading for about 5 years on a part time basis.

So far, dabbling aside, I have traded equities through Comdirect.

I would consider myself an average trader - I have an unwritten strategy that I use for picking shares, and so far this has served me well.

So far, my personal portfolio has grown by 20% per year on average.

It's worth pointing out here though that my personal portfolio is quite small - now about 25k. Some of the risks I have taken that have contributed to these gains probably would not have been taken if the stakes were higher.

I tend to have a watchlist of about 10 shares and holdings in about 5 at any one time. My watchlist changes when I pickup on a new share that gains my interest.

The reason for my posting here is to let people read the experiences of someone similar to them - I aim to go from part time dabbling to a more professional trading setup.

As part of this transition I will also be making changes to my overall strategy - I will be looking into CFD accounts, possibly switching my main account to IB after their news item yesterday and also taking a look into forex trading.

So, it's time to light the lights, it's time to get things started on Chris' blog tonight.. (hmm, the theme tune didn't quite work!)