I have had some feedback from IG Index regarding the issues detailed in http://obscenelyrich.wordpress.com/2008/07/17/a-spread-betting-disaster
IG wrote back to me informing me they have investigated the issue and the trades that were concerned. They have obviously gone to a good deal of trouble to see exactly what went on and have confirmed that some slippage (as the effect of the delay is called) was inevitable, but also that some slippage in my case was ‘a bit harsh’. As a result they have refunded a small portion of the loss that they consider was out of the ordinary range of acceptable slippage.
This good will on their behalf goes along way to repairing the trust that I felt I had lost with their system, but it is still a small amount of the total slippage that occurred (13% of total slippage), but I feel a bit less like I am at the mercy of an indefinable period of time, resulting in indefinable risk due to slippage as they have accepted that there was a mistake and have rectified this to some degree. This gives me some confidence that in future if this happens again, they will follow the same tack and limit the slippage due to large delays.
The total situation was as follows:
Total loss up to stops: £95.93 (4.8%)
Total loss after stop (slippage): £76.20 (3.8%)
Total loss: £172.13 (8.6%)
After the correction of £10.16 (0.5%), the loss is:
Total loss up to stops: £95.93 (4.8%)
Total loss after stop (slippage): £66.04 (3.3%)
Total loss: £161.97 (8.1%)
Please note: I know the amounts are small but it is the percentages that are important and the way the system works. This is important because the figures are only relative to the account size and this will change over time, but the system and percentages will not.
The question is now whether that this is acceptable or not in terms of whether this kind of loss due to slippage occurs frequently enough to remove any profits I make. The advice I have got from everyone is just move on, forget it and get on with trading. I can only do this if I feel I have a chance at success.
I am going to order and read the book recommended by my TU Mentor. (‘Trading in the Zone’ by Mark Douglas) which should help.
I am going to write about the psychological effect this has had on me. I mean this in the sense of the trader’s psychology not my mental health state! I have always glossed over the bit in the trading books which talk about the trader’s psychology before as I didn’t think it really applied to me. However, now I am going to re-read these sections as I certainly went through a few moments of annoyance and blaming the brokers. I’ll write about this soon.
July 22, 2008 at 5:55 am
I was quite interested to read what happened regarding the slippage. Are you going to continue after reading the book you mentioned?
I was thinking of doing this course, so am really keen to follow your progress. Please keep us updated.
All the best, Glenn
July 25, 2008 at 8:53 pm
Thanks for your comment.
I have been very busy with the business so have not had a chance to start the book yet. It has arrived from Amazon now and is sitting on my bed side table waiting for me to start it.
I have actaully very tentively started trading again. However, I have only been playing the power play strategy extremely strictly for the last 3 days. Only one trade was ordered and that quickly hit my stop and I lost my 1%!.
The market is very volatile and not trending this week so i am not expecting much from it until we see a clear trend either continuing down like the last 18 months or a strong bounce back up through the MAs.
So in short, I am trading a small amount and I will read the book and review whether i will continue properly after that.
I am still not convinced the whole thing is just down to luck.
Before going on the course i would strongly recommend reading the spread betters handbook as everything on the course is covered in the book. If you feel you need more after the book, then perhaps the course would be good.
See ‘Buy the books’.
July 26, 2008 at 10:47 pm
This unfortunately is part of the game – and I have found can only be avoided by playing smaller so you can have ‘mental stops’ or having them a fair way from teh market.
Good luck though – Mark D’s book is good though a bit heavy going – I believe trading is at least 80% psychology and money management, I know these seem boring compared to charting.technical analysis etc, but really they will keep you in the game, and if you are in the game you have a chance!