GnuTrade Review

Someone asked me about GnuTrade the other day and since their offering is within my sphere of interest I decided to take another look...

GnuTrade - (What They Say..)

GnuTrade (pronounced 'noo-trade') was founded by a group of seasoned financial traders who figured out that financial trading could be easier and more enjoyable if their confusing data screens and complex trading methods were simplified. The use of colour, movement and sound, together with our straightforward 'Back a Player', 'Basic' and 'Per Point' bets means new and expert traders alike have an easier way to trade the markets.

How it Works

The site is quite basic really, but allows you to use the 'gnu' currency to practice trading on generalised markets...

The time bets are very simple...

£5 per time to play (you can obviously scale the stake up).

If you lose then you lose your £5.

If you win you make £3.80.

In order to win you must predict whether a particular market will be higher or lower than when you place the bet.

They only move it in whole points.

If it is a dead heat (i.e. the markets ends at the same level as when you placed the bet) then they consider that the market is not higher or lower and hence in a dead heat you also (surprise, surprise...) lose.

It therefore makes sense to choose bets over longer time-frames as this reduces the possibility of the market ending on a dead heat (i.e. the market equivalent of 'green zero') are reduced since market range (and therefore the number of slots that the ball can land in) are increased as market range is a function of time.

Gnu Trade Unplayable Spreads - (What We Say..)

They trade the main indices and commodities and although the spreads are rubbish one can still play with demo or real money. The minimum deposit is just £20 and minimum bet size of 10p per point. At first glance the GnuTrade trading interface looks pretty slick , but closer inspection reveals that they are basically just offering a combination of:

'per point' bets which is really bog standard spread betting.
'basic' bets which are BetOnMarkets-style bets, except that a smaller range of options are available.
'back players' bets which look interesting as they offer the opportunity for demo users to make real money if they attract a real money player to back them, but has two major limitations:

1) People who are backed while trading well with play money get a share of the profits - I assume this is from the profits of the back bets (as opposed to the play money profit), in which case if the traders are so successful, why are they still on play money?

2) For traders who are successful with real money, what incentive is there for making their portfolio public so that other people can back them? Do they get a share of the profits of the back bets placed on themselves? If not, then surely there is no incentive at all for going 'public'?

GnuTrade claim the site is great for beginners to learn trading, however the charting capabilities they provide are very limited - you only get a poor 'market analyser' which shows practically nothing except daily and weekly moves, but NOT illustrated with candlesticks or anything so almost impossible to tell what's really going on.

Gnu Trade Review

A spread of 30 on the Dow means that if taking a bet for 20pts you are already some 600 quid down from the start.

GnuTrade Spreadtastic

On the demo GBP/USD quote appears to be 1.5129-1.5114!!! Spreadtastic! Cable at 15 point spread when you can get it at 2 points at Capital Spreads! If that is their spread for real then that's all you really need to know. They also offer a number of other Binary style bets but these also look absolutely stacked against the punter.

A quick cross section of spreads....

FTSE 10 Points (yes, before you ask these are whole points not decimals!)
CAC 16 Points
DAX 10 Points
Dow 30 Points

EURUSD 15 Ticks
JPYUSD 16 Ticks
USDGBP 15 Ticks

Gold $2.0 (20 points based on tenths)
Oil 20 Cents
30 Year T Bond 20 Points
German Bund 20 Points.

So it looks like GnuTrade is very much like other fixed odds betting firms and probably do not even hedge so can only take small bets. I'd stay away from them as it seems nothing much more than a fun site - the spreads are just uncompetitive and they aren't even regulated by the FSA like other spread betting sites but operate through a master license issued by the Government of the Netherlands Antilles! Although as they say all their payment processing, banking, and accounting are all handled by institutions regulated by the Financial Services Authority in the United Kingdom (ouch as if this is supposed to give us peace of mind )

The content of this site is copyright 2016 Financial Spread Betting Ltd. Please contact us if you wish to reproduce any of it.