THIS REPORT IS STRICTLY CONFIDENTIAL IT IS NOT TO BE COPIED TO ANY OTHER PERSON. John Piper Never risk more than you can afford to lose.

Transcription

1

2 THIS REPORT IS STRICTLY CONFIDENTIAL IT IS NOT TO BE COPIED TO ANY OTHER PERSON John Piper 2012 Risk Disclaimer No responsibility for loss occasioned to any person or corporate body acting or refraining to act as a result of reading material in this report can be accepted by the Publisher, the Author or any employees or agents of either please read this page carefully. It is up to the reader to ensure that any trade or trades he or she places, if any, give effect to his or her wishes. If you have any doubt on this matter you should seek appropriate professional advice. Never risk more than you can afford to lose. For legal reasons we are obliged to state the following: Disclaimer: To the fullest extent permitted by law, the authors and publisher are providing this written material, its subsidiary elements, including correspondence by , and its contents on an as is basis and make no (and expressly disclaim all) representations or warranties of any kind with respect to this material or its contents including, without limitation, advice and recommendations, warranties or merchantability and fitness for a particular purpose. The information is given for educational and entertainment (we want you to enjoy this manual) purposes only. In addition, the authors and publisher do not represent or warrant that the information accessible via this material is accurate, complete or current (although we have made every effort to ensure that it is so). To the fullest extent permitted by law, neither the authors or publisher or any of his affiliates, partners, directors, employees or other representatives will be liable for damages arising out of or in connection with the use of this material. This is a comprehensive limitation of liability that applies to all damages of any kind, including (without limitation) compensatory, direct, indirect or consequential damages, loss of data, income or profit, loss of or damage to property and claims of third parties. All rights reserved. No reproduction, copying or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted without written permission.

3 Please Note IT IS ALWAYS ADVISABLE TO RISK SMALL SUMS WHEN STARTING ANY NEW TRADING PLAN you can also paper trade initially bear in mind there is no rush. Take your time learning this thoroughly. If you rush you may ruin the opportunity. Remember Trading is a life skill meaning if you get it right it will set you up for life!

4 Guide to IG Index and Gekko Markets This guide is intended to show you how to use spread betting platforms such as IG Index and Gekko. If you have never used a spread betting company before then this guide will help you. If you are familiar with spread betting companies you probably don t need to read this. Opening Your Account with IG Index So first let s have a quick look at IG Index s web site: Use this link to go to the site Click on Create Account this is the last item from the right about half an inch from the top of the screen depending on the size of your monitor. But please note that IG change their front page quite frequently and so the position will move from time to time but there are generally at least two such links so you should have no problem finding it. 1

5 The next screen you should see is this one: As you can see, they ve made it easy for you! Just click on Step 1 and you ll see this: So go right ahead and fill out all the fields. Then click NEXT. 2

6 Here s the next screen you should see: Next they will ask you about your trading experience, investment knowledge and financial details. 3

7 Go ahead and give them the honest information. There is no need to embellish your experience or level of wealth. When I did this as a test I ticked all the no experience boxes and gave myself a lowish income. I then got a warning screen telling me I was unsuitable for spread betting. However they let you open an account anyway, so don t worry. If you get that warning screen, if you are happy then tick the boxes where you agree to their warnings. Then go ahead and finish the application. After you have completed the forms, IG will then confirm your account number and password by these are your login details. They may also give you a call to make sure you are happy to go ahead. If you have any problems with this process IG provide a help desk on or helpdesk@igindex.co.uk Once You Have Signed up When you receive your account number and login details you will be in a position to log in to the main dealing platform. Enter your username and password in the boxes shown then click Log In. 4

8 The next thing you will see is the dealing platform which looks like this: It looks bewildering but don t worry. You ll soon know your way around it. Since we are only concerned here with the DAX Index I will concentrate on that. First let me show you how to bring up a graph of the DAX. It s simplicity itself. Remember, hundreds of thousands of people use this IG platform so it can t be THAT hard! 1. Click on Indices which is top of the left hand side panel. 2. Click on European which is the 3 rd one down on the sub menu. 3. Click on Germany. 5

9 You should see this screen showing the German Indices. We re only interested in the DAX (which IG call Germany 30 ) and the one I suggest you use is the first one which is called the DFB. So click on the tiny graph symbol which is the 3rd column along. I don t think this is an obvious graph symbol, but there you go. 6

10 You should see a nice graph of the DAX which will look something like this: I ve circled a couple of things: 1. Make sure that each price bar covers a 5 minute range. There s a drop down menu to alter this. 2. Note the current SELL and BUY levels of the DAX are shown and these will be constantly changing. The difference is usually just one point (but this can vary, especially overnight). That s the spread whereby IG make their money. Simply speaking, they grab a point off us each time we trade. My chart shows candlesticks (red for downwards moving price bars, blue for upward). All of these things are configurable and I ll let you have a play for yourself. You can t do any damage although be careful not to place accidental bets! You can deal straight from this screen if you want but I prefer to deal from the main screen so I ll show you how to get to that next. I ll show you a little more on graphs in a moment. 7

11 Placing a Trade 1. Navigate to the screen shown on the top of page 6 (and below). 2. Click on the green circle with the arrow in it and up will pop the dealing window. This is where you ll be placing your bets. It s all done with a few clicks of a mouse so again, be careful! Let s go through the dealing window (shown on the right) in detail. 1. SELL/BUY boxes: These show the current level of the Index depending on whether you want to BUY (also called placing an UP bet or going long ) or SELL (also called placing a DOWN bet or going short ). Again notice the 1 point difference which is IG Index s profit. 2. SIZE: This is the amount you want to bet per point. The minimum IG allow is 2/pt. With a 52pt stop loss you can see that you are risking 104 per bet. If that is (say) 3% of your trading pot, it means you should fund this account with about 3,500 for good Money Management. 3. CURRENCY: This defaults to GBP so no need to worry about this. 8

12 4. STOP: This is where you will place your stop, 52 points away from your opening level. If you are BUYING the market, place the stop 52 points below the level shown in the BUY box at the time you trade. If you are SELLING the market, place the stop 52 points above the level shown in the BUY box at the time you trade. Remember, this is the level where you will get taken out of the market if the trade moves against you by 52+ points. You don t have to watch the market as this stop will be triggered automatically. 5. LIMIT: This is the level at which you will be taken out of the market with a profit if the gap is closed. So you set this at whatever the market level was at the close of the previous period, assuming there is a gap of course (you won t be trading otherwise... will you??) Having entered you size, stop and limit, wait for the trigger point and then just click on the SELL or BUY box. You will then see a ticket which confirms the details of your trade. Note these down carefully in your trading log. Don t ever make a trade without meticulously logging the full details. It s easy to fool yourself by forgetting your losers and only counting your winners. That s it! Job done! 9

13 Here are 2 screen shots summarising what I have just explained. 10

14 It is important to realise that you can only trade (bet) at the prices shown. If you don t like the price then you should not trade a good trade is only a good trade at the right price. Once you have placed your bet, it will be shown in the lower box on the page. 2 per point is often the minimum bet size but this varies from bet to bet and you can trade for less than this when you start up with the IG TradeSense section. Once you have an open bet you can monitor the open profit or loss in the lower window and you will see that this is the final figure on the right. Taking Your Profit There are two ways to close the bet. Either hit the green button shown on the left of the open trades in the lower window. If you hit this the DEALING BOX will again open. Once this is open you do not need to enter the amount as that will already be shown. But you will need to hit BUY or SELL to close the bet. If you had originally BOUGHT a bet then you need to hit SELL to close. But if you had originally SOLD a bet you will need to hit BUY to close. Alternatively you can hit the green button to the left of the bet you wish to close and simply do the reverse trade. By entering a lower number of s per point you can close only part of the trade in this way. This might sound a bit complex at the moment but that s because it s new to you. I promise you, this will soon seem REALLY easy. The more you bet, the sooner you ll find that out for yourself. Using Stops to Enter KrautGap is a system which waits for the market to probe beyond a certain level before taking a position. We ve seen how stops can be used to take you out of the action automatically if the going gets rough, but a stop is more generally a type of market order that gets actioned once a market reaches a certain level. So you can use a stop to enter a trade as well. The name stop is derived from the fact that this type of order is usually used once already positioned and is designed to stop you out of that position either at a pre 11

15 determined (acceptable) loss or at a subsequent profit. But you can also use stops to enter a position. Here is how it works First we will look at the IG dealing desk We need to locate our market indices which, if you recall, we did at the start of this lesson. To remind you, go to the finder and the first item is Indices, click on this, then European, then Germany. Having found our vehicle of choice we then need to click the more arrow to the right, see below 12

16 The more arrow is quite useful and I have highlighted the functions I use the most in the screenshot above. The Watchlist function allows you to create your own list of trading vehicles which I recommend and IG may have already added FTSE and Wall Street (their name for the Dow) to your watchlist. The charting functions we have had a brief look at and I ll say some more in the next section. But right now we want to deal with ORDERS TO OPEN. This is a more comprehensive version of the simple trading box we just looked at. If you click the link you will see To set your order you just need to fill in the various sections: 13

17 To set DIRECTION click the arrow and this will toggle between SELL and BUY. The ORDER LEVEL is the KrautGap entry level. The SIZE is how many s per point you want to trade. I suggest the minimum until you are confident with the system ( 2 pp with IG but only 1 pp with Gekko). The TYPE is either a stop or a limit, set this to stop (remember this is our stop to enter not the stop to exit if the trade goes against us.) Leave the CURRENCY at GBP unless you prefer to trade using another currency TIME IN FORCE is quite important. With a daily system you are pretty safe with good till cancelled but with the hourly and shorter term systems you may prefer to close each limit when trading ceases at 21h00 otherwise after hours trading (IG quotes prices 24 hours a day) may trigger you into an unofficial trade. Under contingent orders you can enter your stop which is there to protect you against losses and update this daily as need be to do this hit the more button in the open positions box and go to edit position. Once you have completed the box hit submit in the bottom RH corner and you are done! Using IG Charts We ve had a brief look at this already but here is a reminder. To use the free IG charting service you simply click on the chart icon to the right of the market in question (you can also use the more arrow as shown in the previous section) here is the icon arrowed in a screen shot of the IG dealing desk (btw I have used FTSE to illustrate this section but it is exactly the same for the DAX) 14

18 When you click on the icon, the chart of your choice appears and I have this set for a 5 minute bar chart so here is the chart of the FTSE 100 for 7 th Sept I suggest you have a play around with the various features as it is quite intuitive. Here are couple of pointers: To change the bar type (e.g. from a candlestick to High Low Open Close HLOC) click on Options, then Edit Settings, then select the type of bar you want. The slidy bar along the bottom allows you to move backwards and forwards in time so you can look at past data if you want to. The bar that states 5 minutes allows you to adjust the time scale of the bars and you can choose 16 different time frames from tick by tick, up to monthly. A monthly bar will display the price action within an entire month in one price bar, whereas a single tick reflects a single price point. You can deal right from this chart panel if you like, or go to the dealing window we discussed earlier. Using Indicators and Annotations you can add all sorts of lines and indicators to your chart if you are that advanced. I find these charts which IG call quick charts completely adequate for my purposes (although I also use Morning Star and Updata) but IG also offer advanced chart which gives you even more to access this click on the arrow to the right of 15

19 the chart icon. When I recently checked they were making a 30 per month charge fir the advanced chart feature. As I said, I don t think you need it as the Quick Charts are more than adequate. You can also access free charting with and Yahoo Finance (among others) but note the price data is delayed by up to 15 minutes so these free charts are not that useful for day trading. If you want a more advanced charting function using the official DAX prices we have organised a 30 day free trial (please note the service is free but you may need to pay exchange fees) for our clients with Morning Star Litsa.magklogianni@morningstar.com for more details Opening your account with GEKKO MARKETS Once you have mastered one spread betting company s platform you ll find it easy to master another as they are basically similar. For this reason I won t go into huge detail with Gekko. First click on this link to go to the site Use the link above to visit the Gekko web site and click on Open Live Account this is on the bottom right of the screen as in the screenshot below: 16

20 But please note that Gekko may change their front page and so the position will move from time to time but it will be obvious they are keen for you sign up! Tick the box stating you are over 18 etc. etc. and then fill in the form. If you have any problems with this process Gekko provide a help desk on +44 (0) or info@ggmarkets.com If you enter your account details you will then get to the dealing desk which looks like this: Here are some brief comments on this: Use add products at bottom left to add markets to this page. Click on the charting icons on the left of each market and charts will appear on the right you can adjust these with the menus at the top of the chart on the left. To set up a trade click on the bid/offer spread quotes a new box will open where you can enter position size, stop level and limit (profit taking) level. Account totals appear at top right. I do most of my trading via IG and Hargreaves Landowne. I use my Gekko account to trade the 1000 per 1 per point money management system (as set out in KrautGap module five) account was at 1,000 in June, 2,000+ in July (see below) and in early September is homing in on 3,000 (as above) and this sort of 17

21 growth is what we are aiming for actually module #7 will show you how we can achieve even more! The Gekko site is far simpler than IG with many less markets available but does allow a 1 per point minimum. So that s a brief tour of the spread betting world. If you re brand new to this, please don t worry. Within a very short period you ll be placing bets and shifting stops as though you d done it all your life! The important thing is to get stuck in, open an account and have a play/take a few trades. 100 modules like this can t teach you as much as an hour spent actually using the platforms. Good luck. 18