We have lots of experienced traders on MoneyAM who would be glad to help if you have any trading questions.

David
Thanks alot for the info

i have been trading on and off for the last few years and hve only recently got back into the market again.. i have only ever brought shares with a view to them increasing their short/long term value. i.e a long position

i feel i have been missing out on the other side of trading i.e taking short positions .. for a number of reasons a) i don't know how you can short, whether ur broker would allow u to sell something u don't actualy own .. is it legal .. i know alot of these questions are probably very basic .. but like i said i am trying to learn .. i would like to explore this side of trading further .. i currently trade with td waterhouse.. do they allow this .. any advice on this subject however basic vll b immensley appreciated..

i have read the above thread over and over again and i have found it very informative.. not saying that i've understood it all.. i'm well impressed with the contributors and their willingness to share information ..esp croc .. thx in anticipation

kantona

I believe some brokers may let you go short by selling stock you don't own - they first have to borrow it from somewhere, but most traders short with either CFD or Spreadbet accounts. These accounts have the advantage of no stamp duty to pay on purchases - and also you can buy stock on margin, i.e. typically you only have to put up 5% of the contract price.
(However margin is dangerous you can easily trade bigger sizes than you should and end up owing more money if you lose.)

Some other points - when you are short the brokers pay YOU interest (but at a much lower rate than they charge when you are long).
Also if you are short when a share goes ex-dividend YOU have to pay the dividend amount to the broker.

Hope this helps.

kantonaYes it is legal and its an essential tool for traders.
Look at deal4Free http://www.uk.cmcplc.com/index.html as a good broker to start with. No Stamp duty, no charges just the spread.
If they have clients buy 1,000,000 Vodaphone of them and 1,000,000 go short on them they are very happy and pocket the spread. No trades are put through the market!
However if they are not equal then they would place a trade on the stock exchange to cover themselves for the difference.
Good points by Kajman above as well!
Basically going short is just the opposite of going long and most traders do both nowadays.

kantona,

try Finspreads as well if you want to start small - for the first eight weeks
you have an account they will let you trade with pennies.

Can you short/long CDF'S on any stock ie. Do the companies [I am with comdirect]only deal with the CDF'S they hold,or can I, if I wanted, short a particular company. Will I be able to do so. For example I wanted to short AZM maybe to protect my investment. How do I go about it.
Thanks in advance.

Not all companies deal CFD's (They are considered high risk, and the companies that deal in them are required by the FSA to prove - and not just pay lip service - that you understand the risks involved before they give you an account. Also some shareholders make it a condition of thier account that the shares they hold cannot be used by the broker for others to short so many brokers just find it easier not to get involved.) The ones that do, tend to specialise in it.

In theory you could short/long any CFD's but if they are shares that are not traded in large volumes the spreads can be very wide. Don't forget the prices you can get are set by the company you have an account with. The traders room have a few threads on the problems of getting the deal they want etc. etc. Shorting to protect longs, don't really work because of the spreads and costs. CFD's are best for dealing short term. They are more like trading options!

deal4free have a facility where you can try out some example deals to see how it works.

thx kajman, croc, + snoball for the words of wisdom ... i vll explore the above sites perhaps start by holding a 'mock' portifolio, get some experience before dipping in.. once again i'm grateful for the advice...

Kantona, also have a look at e-trade. They deal cfd's, 3k min account balance 9.95 per deal each way, but you can set up a virtual 100k account by clicking on their advert below. They will probably let you run it for longe if you want before you open an account. I don't use them but lots do.

Very few of the "traditional" brokers will let you run cfd accounts, and most share dealing accounts do not have a shorting facility.

I've a question re trade types.

I see AT trades going through but my list of types doesn't have this one.

Is it 'automatic' where a limit or stop trade has been triggered?

thanks.

ricardopage:

'AT' is an automatic trade generated by the sets system through the order book.

Regards

Ian

Thanks Ian.

This is for Croc. I think I read somewhere you saying not to hold a losing position. Can you please explain where exactly you would consider a losing position to be. For example below a certain percent or at the end of a days trading when the shares are heading south with more sells then buys.
Thanks in advance.

Washlander
Big question!
On daytrading I use constant re evaluation. If I no longer would take out the position I close it even if it has not moved! IE a sudden change in the direction of the FTSE or perhaps the Level 2 order book starts to look dangerous. A very cautious approach but it works for me.
On my longer term trading I stay with a share as long as it remains within its channel / trend or it does a 123 movement on the chart which signals a close.
Of course you could use a moving stop loss to achieve a similar result. But I feel this method gives better results as it keeps you in winning positions longer
D.

sorry if this has been asked before BUT

how come when i watch SETS stocks, very small AT trades move the price, but relatively large trades ( i presume through mms ) seem to have little or no effect?

excellent thread btw
keep it near the top, i was lucky to find it.

Hi Croc,
Thanks for the info, this is Washlander's wife, Liz. What do you mean by a 123 movement on the chart etc..
L.

Hi Liz Washlander This is 123 analysis, the 123 is the triangle formation as can be seen on the chart above. The number 3 point when it drops below the 1 signals a SELL and of course  If I was long I would close or go short. On a rising trend the opposite is true.

Superrod have you got Level2? In the L2 example the real power is with the 600 trade BOT (See BOTS) order above. Every time it is filled it is automatically replaced by another of a similar size. So although small it has enormous power. It is filled approx every 5 minutes so 600 share * 12 times and hour * 8 hours a day * 5 days a week * 4 times a month. = 1, 152,000 shares So these small trades can have far more power than you think!

 

Can anyone advise me where I can find old charts with intraday movements. I want to back test some theories but can only view the last 16 days and thats with Deal4free

Thanks in advance
Mike

crocodile,
thanks for that, i just wish i had more time ( and shares ) to make L2 a viable investment.
keep up the good work
and a good weekend to all.