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Blueindex Review

Blue Index specialises in providing derivatives trading services to the independent experienced trader. Our objective is to enable our clients to achieve superior gains by trading the most innovative financial products available with support and advice if and when they need it.

In recent years Blue Index has attracted the attention of financial media giants CNBC, Bloomberg and the BBC. Our top traders regularly participate in live television and radio interviews, providing market views, commentary and analysis of the financial markets that is broadcast in over 40 countries.

As one of the first brokers to offer Contracts for Difference (CFDs), our clients have been able to benefit from falling stock prices in the UK, Europe, USA and Asia. CFDs are one of the most exciting products to enter the financial markets in many years, allowing our clients to take advantage of 'bullish' or 'bearish' markets.

Blue index is privately owned and fully independent. We provide you with an unbiased flexible service giving you as much or as little advice and support as you require. Blue Index decided from an early stage to delegate activities that are best handled by specialists to appropriate third parties. This has avoided the need for in-house back office systems and allows us to adopt a more focused, proactive approach. .

We offer execution only facilities as well as full service advisory accounts. Once your account is set up you will have a personal broker who will be available to you inside and outside market hours. Each broker has a limited number of clients and will be intimate with your account.

Blue index is authorised and regulated by the Financial Services Authority and is therefore required to adhere to the highest standards of conduct and business practices in the financial markets.

Company Profile

www.blueindex.co.uk

Telephone Number: 020 7398 2555

Address: Blue Index, 23-26 St Dunstan's Hill, London EC3R 8HN, United Kingdom

Margin: From 5% to 20%

Commission: No more than 0.5% (advisory service); negotiable

Minimum Initial Account Size: £10,000

Interest Charged on Long Positions: LIBOR + 1.5% (negotiable)

Interest Paid on Short Positions: LIBOR - 1.5%

CFDs Available: Any UK stock of over £30m market cap, US, European, Asian stocks & indices, gold

Other Derivatives Offered: Futures, options, forex, commodities, and precious metals

Automatic Trading Facilities: Stop losses, limit orders, OCOs, If-Dones

Online/Telephone Dealing: Yes

Advisory Service: Yes - full advisory & stock monitoring

Prices: Level I/Level II

Research Available: Technical & daily fundamental research

Trading Platform Features: Instantaneous execution, recommendations given via CNBC and Bloomberg TV

Interview with Robin Brookes Head of Marketing at Blue Index

Andy, Contracts-for-difference: Hello, thank you for agreeing to be interviewed. I think to start the interview; I would like you to introduce yourself, describing your current and past positions/experiences?

Robin, Blueindex: Hello, I am Robin Brookes Head of Marketing at Blue Index. I joined Blue Index 3 years ago having been involved in the financial markets for 11 years both on the trading and sales side; previously working for Credit Suisse, SG Securities and Cantor Fitzgerald. Although I support the traders and the research department my role is primarily introducing new clients to the company.

Andy, Contracts-for-difference: Could you give us a brief overview of Blueindex.co.uk (Blue Index)?

Robin, Blueindex: Blue Index is a derivative trading firm specialising in CFDs, Futures and FX. You can trade all the major Global Exchanges as well as gain exposure to all the major financial instruments. CFDs are available on individual Equities (e.g. Vodafone, Microsoft); on Indices (e.g. FTSE 100, S&P); Forex (e.g. Euro/Dollar, Dollar/Yen), Commodities (e.g. Gold, Oil) as well as Treasuries (e.g. T-bond, Euribor). Blue Index is privately owned and we offer execution only and advisory trading services online and over the phone. Our research and advice is independent and in-house, we don't run a book or take proprietary positions so have no axe to grind meaning that we are motivated by helping our clients to trade profitably.

Andy, Contracts-for-difference: Tell us why you decided to plunge into the CFD business. When did Blueindex.co.uk first open for business?

Robin, Blueindex: Blue Index was founded in early 2001, but I believe that there was a lot of preparation as the CFD product begain to develop from early 2000. We became regulated in November 2001 and our first trade was executed shortly afterwards.

Andy, Contracts-for-difference: Could you walk us through Blueindex products?

Robin, Blueindex: As above, you can trade all the major Global Exchanges as well as gain exposure to all the major financial instruments. CFDs are available on individual Equities (e.g. Vodafone, Microsoft); on Indices (e.g. FTSE 100, S&P); Forex (e.g. Euro/Dollar, Dollar/Yen), Commodities (e.g. Gold, Oil) as well as Treasuries (e.g. T-bond, Euribor).

Andy, Contracts-for-difference: How many employees does your business employ?

Robin, Blueindex: We are totally focused on researching advising and trading for our clients, our main back-office functions are handled by our clearing brokers, allowing us to focus on what we believe we do best. The idea is to offer clients the best of both worlds. We have a trading team of 12, with 4 staff looking after admin and new accounts. You can see most of our traders (including myself) on CNBC and Bloomberg regularly, see the press room.

Andy, Contracts-for-difference: Was your company financed by venture capital, private investment, loans, or personal funds?

Robin, Blueindex: The firm was established using the personal funds of the two founding directors, and remains totally independent.

Andy, Contracts-for-difference: Describe some of the obstacles you have encountered along the course of building your company? How were these overcome?

Robin, Blueindex: If you are giving advice and taking some responsibility for your trading decisions, you need to be able to take your own emotions out of the equation. The appointment of Zak Mir as Chief Market Strategist has allowed us a real edge on the Technical Analysis front that has aided out trading immensly.

Andy, Contracts-for-difference: What is the minimum deposit required to open an account? Is there a maximum deposit?

Robin, Blueindex: There is no minimum or maximum but in general deposit balances range from £10,000 to £500,000.

Andy, Contracts-for-difference: Do you accept deposits by BACS? Which other payment methods do you accept?

Robin, Blueindex: We accept all the standard methods of transfer, including BACS, CHAPS, cheque, debit card and credit card, although there is a charge for credit card transfers.

Andy, Contracts-for-difference: What are the minimum/maximum cfd trades?

Robin, Blueindex: There is no maximum or minimum trade size. Normal CFD trades range from £10,000 notional trade value up to £1,000,000 plus. This varies substantially for other products depending on leverage, for example FX trades on 1% margin because of FX market liquidity, therefore trade size will be generally higher. Increased leverage brings with it increased risk and care must be taken to limit your downside.

Andy, Contracts-for-difference: Please tell us about your commissions for the different products on offer.

Robin, Blueindex: CFDs costs vary depending on size and frequency of trading and whether the client wants advice, monitoring, order working etc. Rates vary from 20bps to 50bps.

Andy, Contracts-for-difference: You classify all clients as 'intermediate'; which indicates a certain degree of knowledge and experience on the clients' part. Why do you insist on this if this means that clients have to waive the protections provided for private customers? Does this mean that cfds are only suitable to professional traders?

Robin, Blueindex: CFDs, Futures and Foreign Exchange trading is high risk, trading on leverage means that any profits are magnified relative to your margin, this also works the other way and losses can quickly spiral out of control if not correctly mitigated. It is important that clients have a good understanding of leverage and how the margin account works, and have experience of trading the markets. We do have a simplified account opening process for clients that wish to trade execution only and online. However if we are giving advice, providing technical research and generally talking about the markets over the phone we need to satisfy ourselves that the client has sufficient knowledge and understanding to judge the information and make decisions themselves. The biggest piece of advice that we give to clients all the time is to limit your downside and run your upside. Even the most experienced investor can be guilty of falling in love with a stock and being unwilling to cut their losses if it goes against them.

Andy, Contracts-for-difference: What margin is required for trading contracts for difference at www.blueindex.co.uk?

Robin, Blueindex: Margin rates depend on the underlying instrument being traded and is based largely on the liquidity of the instrument you are trading. Stock CFDs are usually traded with 10% margin although this can be decreased to 5% on request. Indices are usually 1% margin and FX is usually 1%.

Andy, Contracts-for-difference: Do you accept international clients?

Robin, Blueindex: Yes we have a number of international clients and have French and Italian speakers in the office, although from my experience English still seems to be the international 'trading language'.

Andy, Contracts-for-difference: Can clients trade contracts for difference online? Is phone dealing available?

Robin, Blueindex: Clients can trade either online or over the phone or both. Our online trading platform allows genuine one-click dealing on thousands of real-time prices. This dealing interface combines live real-time prices, fills and confirmations. Available orders online include; market, stop, OCO, GTC and limit orders. The platform is browser based and doesn't require any download so can be accessed from anywhere with just a username and password. Real-time charting, news flow and technical charting is also available online as well as position updates, live P&L, open, pending and closed orders and available margin and cash balance visibility. Clients often combine the convenience of online account viewing with the comfort of speaking to a human over the phone.

Andy, Contracts-for-difference: Are you able to deal on clients' behalf and/or give advice on which stocks to buy or short?

Robin, Blueindex: Clients have access to experience traders over the phone who are intimate with their account and can give them advice, order flows and monitor positions and work orders. As a Blue Index client you also have access to Technical Analysis from leading UK chartist Zak Mir. Zak produces a premarket rundown each morning with stocks to buy and sell as well as daily support and resistance levels, chart breakers and portfolio updates, he is also available to speak with clients direct.

Andy, Contracts-for-difference: Is interest paid on the balance of the accounts?

Robin, Blueindex: Not usually. Although interest in available on request it is after all a trading account and monies are usually being used as margin for positions. Monies can very easily be tranfered in and out of the account.

Andy, Contracts-for-difference: Are there any general safeguards for clients - protected accounts for clients' money or segregated accounts.etc?

Robin, Blueindex: We recommend stop losses on every trade, this can be sensibly placed at support (long) or reistance levels (short). We do offer guaranteed stops but personally I think they are too expensive to justify the protection of a potential gap move. Margin accounts are usual non-segregated but can be segregated on request.

Andy, Contracts-for-difference: Do you trade on a personal basis? Have you made any mistakes along the way that you have learned from? If so, would you describe them?

Robin, Blueindex: Personal trading is restricted to avoid any conflict of interest with clients and assure impartiality of advice. I think the biggest mistake that you can make as a trader is to allow human nature to take over your decision making process. It is human nature to not want to admit you are wrong, so instead of cutting your losses and running your profits, if you are not careful you will end up cutting your profits early and running your losses praying for them to come back.

Andy, Contracts-for-difference: What books and resources would you recommend to fellow cfd traders?

Robin, Blueindex: For a resource I would look no further that John J. Murphy, 'Technical Analysis of the Financial Markets' is it pretty much the bible of Technical Analysis. Good for beginners and experts alike, it is the first book any aspiring trader should read and provides and excellent reference guide. I would also highly recommend a chat with Zak Mir.

Andy, Contracts-for-difference: Who is predominantly making up your customer base at this time?

Robin, Blueindex: We deal with a wide range of clients, from the occasional trader to the high volume hedge fund, they all have one thing in common and that is that they like to have someone at the end of the phone who is intimate with their account, knows the market and will do the best they can for them when executing their orders. Each broker has a limited number of clients and we are not speadbetters so we don't run a book or take the other side of a client order and we don't widen the spread; the deal is done at market price with market liquidity or better if we can. As a result we don't have an axe to grind so if the client makes money they will be happy and hopefully continue to trade with us, so our motivation is aligned to the clients.

Andy, Contracts-for-difference: Are there traders who make a living through contracts for difference at www.blueindex.co.uk? What is the trading style and methods that these traders use for winning consistently?

Robin, Blueindex: The key to successful trading is to keep it simple, consistent and be disciplined. If you are a technical trader stick to the indicators that you know best. Clients are welcomed to visit the Blue Index offices in the City to discuss trading strategies with the traders or our Chief Market strategist Zak Mir. We have a number of clients that trade for a living. Unsurprisingly, these are the most disciplined!

Andy, Contracts-for-difference: What else are you offering as products and services that puts you a bit ahead of your competition? How do you see the future of contracts for difference with the increasing competition?

Robin, Blueindex: There is a lot of competition out there in the CFD market at the moment. At Blue Index we differentiate ourselves by adding a service. It is not necessarily for everyone and many traders prefer the 'no frills' trading approach. At Blue Index you have access to experience traders who can give you advice, monitoring and order flow. As a client you also have access to our in house research from leading technical analyst Zak Mir. Zak produces a morning rundown, daily charts, support and resistence levels with chart breakers, portfolio updates and special situations, UK and US. He is also available to speak to direct with clients.

The abolition of stamp duty does not look like happening in the near future, Gordon Brown is not prepared to relinquish this income, this will continue to make CFDs more attractive for the active trader. There has also been a lot of talk about restricting short selling in the UK market or perhaps adopting a similar 'uptick-only' approach to the US. I don't think this will happen either, CFDs and short selling actually provide essential liquidity which is the lifeblood or any market, after all why should you not be able to benefit from a fall in the price of a share.

Andy, Contracts-for-difference: Do you operate any other sites besides www.blueindex.co.uk?

Robin, Blueindex: No

Andy, Contracts-for-difference: What do you think are the most important characteristics of the professional contracts for difference trader?

Robin, Blueindex: Discipline, discipline and discipline. This is the one thing that separates the traders that make money consistently and those that don't.

Andy, Contracts-for-difference: As of now, what trends do you see in the markets people choose to trade? Are there certain markets that clients seem to prefer? Do you think this will change over time?

Robin, Blueindex: Traders seem to stick to what they know, and we have seen big volumes in Oil, Dollar and Gold over the last few month. The Equity markets have been very quiet over the summer and some have found the going tough. The sideways movement in the FTSE has meant that clients have been knocked out of stops but not given enough upside to take a decent profit. However the market rally over the last few months has seen many people coming back to the equity markets. With improving liquidity and with more than $140 billion expected to be pumped into equities over the next few months as the world's fund managers dip into their hefty cash piles to reduce them to market neutral levels the new year should bring the excitement back into the equity markets.

Andy, Contracts-for-difference: We have seen that most of your adverts (example; your current sign-up promotion relates trading to sensuality). Please comment.

Robin, Blueindex: Ha Ha, a cheeky contribution from the marketing department. I believe a picture of my legs was taken out of the running at the last minute!

Andy, Contracts-for-difference: Do you have an opinion on the global market outlook?

Robin, Blueindex: Going forward with the FTSE towards the end of the year it may be sensible to assume that before a year end rally is seen there will be a week or two of pullback to make life hard for the bulls - something that is very often seen at the end of November / beginning of December. Sticking to the technicals, as long as support in the next couple of weeks is found at or above October resistance at 4,730 we are looking at the big round number of 5,000 being hit by the turn of the year.

As far as oil is concerned, it can be seen from the Nymex January crude contract that we have seen a platform established at the June support line at $46. A weekly close above the 50 day moving average at $49.40 could take the commodity up to the top of the 2004 price channel as high as $57.

Going onto the DOW, now that the US Presidential Election is out the way we are looking at the US average having retreated from overbought levels, with a chance of a minimum retest of the early November support area at 10,400. Only below this would suggest a bear term top had been made. If the 10,400 zone holds we are looking at a potential move to the September resistance line projection at 10,700 - something that could be enough to cause the US benchmark to take out its highs of 2004.

What was interesting about the latest G20 Economic summit is that there was no conclusion as to what action to take with regard to the weakening dollar. It was a case of no news being extremely bad news. Looking at the chart of euro / dollar the top of the September ascending price channel can be regarded as the target at $1.32 versus the euro. The only problem for traders looking for a one way trade against the dollar is that it would appear that the currency cross is heavily overbought, however a decline to the bottom of the rising channel at $1.28 would be another buying opportunity.

Andy, Contracts-for-difference: There are many sayings in the markets, do you have a favourite one?

Robin, Blueindex: Warren Buffet once said that risk comes from not knowing what you're doing. Derivatives were originally invented to limit risk, CFDs are only risky if you misuse them. Stick to your strategy, set some limits on the length of time you are willing to invest and the amount of loss you are willing to incur, limit your downside on each trade and run your profits.

Andy, Contracts-for-difference: What challenges do you see ahead?

Robin, Blueindex: The main challenge is still in educating people about CFDs versus physical trading and spreadbetting and how to use leverage in a profitable way. I firmly believe that serious traders should use CFDs in terms of cost, execution and versatility. There is no stamp duty, no extra spread (so costs are transparent), no expiry period you can go long or short and gain leverage easily. There is then the challenge to ensure people are using these products correctly, at Blue Index we try to ensure clients limit their downside, position themselves sensibly in the market and don't take profits too early.

Andy, Contracts-for-difference: Any other comment you want to make?

Robin, Blueindex: Thanks for the interview. If anyone wants to find out more about Blue Index then visit the website on www.blueindex.co.uk, there is a free subscription sevice to our weekly research report and you can try out a demo of the trading platform with live prices but a dummy account. If you want to speak to a member of the Blue Index Trading Team, you are welcome to call on +44 (0) 20 7 398 2555 or if you have any Technical Analysis questions then call Zak Mir direct on +44 (0) 20 7 398 2565.