Disclaimer: Don’t take my posting of these trades as a recommendation that you should make the same trades!

My order that I placed yesterday was not executed today. I suspec it will not execute tomorrow either although I am leaving it open for a few more days in case the price does continue to drop further. If you have looked at the chart you will clearly see that the low of yesterday 110.7 is below the 1/3 retracement of 111.1 so this is probably the start of a new upward movement. I suppose I could just click buy at some time tomorrow if I am expecting the price to continue to rise but I wont.

I have lost money by making rash descisions when it comes to trading. When I first started I looked at a chart and thought its going up so it will continue to go up so I’ll buy. Big mistake. More often than not I was buying at the top and the price started to drop as soon as I clicked the buy button. It’s for this reason that I now never click the buy or sell buttons. I prefer to plan my trades and set them up as orders in my spread betting account. I’m even trying not to click the buy or sell button to take any profit. I want to move up my stop loss orders to keep loocking in profit untill the move is over so I caputre as much of it as possible. This way I cut my losses short and let my profits run and run and run.

So my rule number two for the spread betting beginner is never click the buy or sell button.

When my profits start to accumulate I am going to try pyramiding my position to make even more profits. An explination on pyramiding will have to wait untill I am actually at a place to practice it which at the moment seems like quite a way off. But we’ll wait and see.

So anyway my Beazley order has yet to be triggered but I suspect Beazley will now be starting a new upward movement and my order will not be filled. But I don’t mind. There is always another day, another stock, another trade. Mastering your emotions is a big part of becoming a successful trader something that I am just starting to realise. There are many good books about this and a couple I would reccomend are: Trade Your Way to Financial Freedom and Super Trader: Make Consistent Profits in Good and Bad Markets

For anyone that is interested I may post earlier from now on. I aim to do my analysis of charts and set up any orders in the evenings so I will probably report them the following morning if I get time.

Other news my redrow position stopped ot yesterday for a loss of £17.10. This is way above my risk level of 1% but I made this trade before I started to use my 1% money mangement strategy.
Inchcape stopped out today for a loss of £4.90.

Today has seen the FTSE rise to around 5480 any both of my two commonly used spread betting accounts are now showing a profit of around £20 each compaired to both showing losses yesterday. The aim is to keep my existing postions open an capture as much profit from them as possible while all the time looking for new potential trades.

I have also had e-mails back from my spread betting companies and I can get you some free money if you are interested when you open an account with them.

I can get you £100 with capital spreads
£100 with tradefair
£70 with E*trade

Since this is a refer a friend scheme the numbers are limited to 5 friends for each account so e-mail me quick if you are interested

I’m sorry I didn’t update over the weekend like I said I was going to but the misses came home after being away for a week and a half so I spent some time with her instead. It’s going to be a while before I get this blog up to speed with everything I want to add about strategies and technical analysis but I promise it will get done. I struggle alot with getting time to do it, with work and currently in the process of moving house so it may be a few months before it’s all up to speed. I’ll keep posting my trades with explinations so you’ll have something to keep you going untill I get the rest up an running.

I have just placed one order for today. The order is for Beazley Group. I placed a £1 per point buy order at 109 with a stop set at 100. If you take a look at the chart below Beazley is currently in an uptrend. ADX(14) > 30, DI+ > DI-, MA(20) > MA(50), MA(50) > MA(200). The stock has been pulling back from a recent high of 115.8 on 24th Feb. The stock made a recent low on 8th Feb of 101.8.(see red crosses on chart below)

As I may have mentioned I am currently reading Technical Analysis Explained: The Successful Investor’s Guide to Spotting Investment Trends and Turning Points. In here it details many things. On of which is that a trend will typically retrace 1/3 to 2/3 of the previous price movement. Therefore the previous price movement of Beazley was from 101.8 to 115.8. This is a move of 14pts. Therefore the price should fall back to anywhere between 106.5 and 111.1. These values are worked out as follows:

115.8-101.8 = 14
14 * 1/3 = 4.66
14 * 2/3 = 9.33

115.8 – 4.66 = 111.1
115.8 – 9.33 = 106.5

A typical place for the retracement to get to can be 50%. This would be 108.8. This is why I have placed my buy at 109. If the price retraces to 50% of the previous price move then there is a good chance that the retracement is nearly over and the price should start to rise again. I have set my stop at 100. There are two reasons for this. 1 it is way below the 2/3 retracement of 106.5, 2 it is below the recent low of 101.8. If the price continues to fall this far then it is no longer a retracement of the previous price and I no longer want to be in the trade.

This fits with my 1% risk strategy. I like to try for a 3:1 reward to risk ratio so I would be aiming to make 27 points from this trade. This would mean a I am aiming for a price of 136. The ATR(14) is 2.44 So once the stock starts to move into profit I will trail my stop by 3*ATR so 7.5. I have placed the order all I have to do is wait and see if it gets executed. I highly doubt the trade will execute today but I expect it to execute tomorrow or wednesday. I’ll keep you updated.

Disclaimer: Don’t take my posting of these trades as a recommendation that you should make the same trades!

If you want to join any of the spread betting firms I am currently with please e-mail me. I am going to e-mail them to enquire about their refer a friend policies which will mean cash incentives for me and you.