Re: Stocks and Shares?
Originally Posted by
MKJ
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Believe it or not my winnings are now over £5000 - see pic. This has taken me 2 days to achieve.
That's a Demo account !! You can't be this naïve ! Why do you think Demo accounts exist?!!! Why do you think EVERY online gambling website offers your free £10 or more bets?
Wake up MKJ or they are going to cream you.
Originally Posted by
MKJ
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I see Realist mentioning fixing prices so that a stop loss could close you out but surely share prices are the same whatever platform you use?
More naivety. What are you ACTUALLY looking at when you are viewing your screen? You are looking at your Spread Bet Company (SBC) website. That is NOT the stock market.
It is THEIR portal which shows what THEY WANT TO SHOW YOU.
The prices and movements you see there are some way behind actual live stock market prices.
So the system knows:
1. The actual live stock price
2. Your spread bet details
3. Your stop losses (if you have them)
The system can react in milliseconds.
Originally Posted by
MKJ
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I have a few practice accounts with different companies. I have double checked that the shares are of the same value at all times. So surely I am right in thinking actual share prices will not be manipulated?
There are live stock process and then there are levels beyond it. Few get access to the live prices. The prices you see on most stock related websites like LSE and Google Finance etc are usually 15 mins behind live prices.
Most finance brokers prices are the same 15 mins behind, e.g. Hargreaves, TD etc. However they offer a service called "Level 2" (L2) which you can subscribe to/pay for, I think its £400 or more per year and that shows more uptodate info and shows the order books (i.e. who is trying to buy and sell).
I urge you again to reconsider what you are about to do. A Demo account is not a real account. It is NOT the real world and thinking that success in a demo account will equate to success in a real account is utterly stupid.
Let me give you just one example of how you can be creamed.
In the finance world you are a tiny ordinary person (called a mugpunter). You're honest, not greedy and just looking to make some money for good reasons.
Pitched against you are massive institutions who wield literally £billions and have massive buying/selling power. These people are utterly ruthless, bend the rules to suit and get away with all manner of financial skullduggery.
You decide to place a spread bet on Stock X at £1 value betting that it will go down (i.e. a "short"). The bet is placed and before long the share price actually goes up a few pips.
How ? Because those people with huge buying power and who can see your bet and it's stop loss placed a large trade to buy shares and that pushed the price up temporarily.
Your bet is now losing and you will have to concede £1.30 to close it out. But you think, ah it's only a small loss, let's leave it and see if it turns around.
It doesn't, the £1.30 loss now grows to a £2 loss. Now you start to get worried. You hate to lose, to concede and the entire system is predicated on that emotional response in mugpunters. That's why the losses gradually rise in small stages instead of going from 0 to a £10 loss in an instant. People wouldn't accept such huge and immediate losses so just like a fruit machine in a pub they play the longer game, gradually increasing the loss whilst all the time making it appear like it could turn around at any second.
The system is also predicated on a simple campaign of fear. In your demo account you freely trade without a stop loss, because it's just pretend. In the real world that would be somewhat moronic unless you were a multi-millionaire banker as the previous poster suggested.
You could easily lose everything you have very quickly. You have little control over your bet. Place a £10 spread bet without a stop loss and you could be looking at a £1000 loss before you know it.
Because of this they introduced the stop-loss system but that was merely a sneaky way to acquire that vital piece of information, how much is the mugpunter prepared to lose.
Armed with that info they know how far they need to push a share price. Without that info they are clueless. They would be left in a conundrum because obviously they can't rig the prices beyond a certain amount.
But then the system of stop-losses ran into problems. On days when trading was frantic, perhaps when a big announcement was made by a company, like say it was going into administration, the system would not be able to cope. There would be so many people trading at the same time that the share price was moving too rapidly and in big chunks. So say the share price of oil company BP was 50p and you had placed a "long" £10 spread bet expecting the share price to rise and you set a stop loss at 40p just in case.
Then BP suddenly has its huge oil spill disaster. The markets go crazy with everyone clamouring to sell their shares asap.
The SP goes from 50p to 30p in an instant. Your 40p stop loss has NOT been triggered it all happened so fast. Now you bet is spiralling out of control as the share price dropes to 25p then 20p then 15p.
Unless you intend to sit in front of your laptop screen during every minute of every trading day you are at risk of this happening.
So the stop loss system did not have the level of protection that mugpunters thought it had. Spread bet companies were inundated with angry calls from customers saying "why didn't your system trigger my stop loss and protect me?" to which the company's just laugh and say "read the f***ing small print you ignorant and gullible mugpunter"
So yet another system was then engineered called "guaranteed stop losses". These DO guarantee that if the above scenario happens your bet will be treated as if the stop loss had triggered. So it is 100% stop loss protection for the mug punter. But it comes at a price. As a mugpunter you already have to pay the sizeable "spread" between the Bid and the Ask, so you are always on the back foot. With a guaranteed stop loss you have to pay an even bigger spread. The odds are always heavily stacked against you, but that's the same in any gambling environment, no matter how they present it.
The mugpunter always believes the he/she could be the person to beat the system, that lady luck will shine on, and that naivety is what fuels and funds the $billion systems that are in place and which give the ruling elite the wealth and power they have over you.
You can not beat the system.
It is run by computers which are hard-wired to the stock exchange and which receive info about price movements before anyone else. A little bit of research would tell you this. Those systems can analyse the movements and make buy/sell trades in split seconds. They can not be beaten.
Last piece of advice
Whichever spread bet company you choose to use, the first thing you should do after depositing any real cash, is to make a withdrawal. Vitally important. Withdraw £100 and check to see how that process actually works and how long it takes and how easy or hard they make that process.
If getting your money back out is in any way difficult, walk away.
Work on the basis that you will lose 100% of the money you deposit and that it will be an education. It's then up to you how expensive that education is.
ATB