Month: July 2010
A quiet day but some orders for tomorrow - July 5, 2010 by Harry

It’s been a farily quiet day all round today. Mainly, I think, because the USA has a bank holiday and US markets are closed.

I spent some time over the weekend looking back through all my old trades. You may or may not know this but when the year started I was almost profitable. I seemed to be having some success, winning some trades losing others. I’m not really sure what happend since the start of the year. I started to buy more books on technical analysis etc, thinking that reading and learning more would help to make me more profitable. With hindsight I think it may have done the opposite. I think it has only served to confuse me and make me look for patterns which may or may not predict what is going to happen. The thing is there is no way to predict what is going to happen and I am only just realising this now. Instead I should look at what is happening and trade based on what is happening rather than what I think is going to happen.

So I have been thinking about what I was doing differently before the start of the year.
Well, I didn’t discover proRealTime before the start of the year and I was finding potential trades using some basic VB software that I had written. I’d click a button and it would download the EOD data from yahoo. Once this had finished I would click another button to run the ADX calculations on the data. After this had finished I clicked another button which gave me all the stocks with an ADX value > 25. I would then look through all these and see which were trending and look for my potential trades. I was using a modified version of Malcolm Pryors buying dips and selling rallies strategy from his Spread betting handbook.

When I found a potential trade I would see if it met my risk. Back then I was risking upto £30 per trade. If it did I would place the order accordingly. This seemed to be almost starting to work well for me so I am going to try and revert back to a winning way.

I am going to use Malcolms stratgies from the spread betting hand book, and allow myself a maximum of £10 risk per trade. I will also be limiting myself to a maximum of £1 per point trades for the time being until I can start to get my trading funds up a bit again. I will only be using these stratgies in trending markets. According to my weekly analysis the FTSE all share is currently trending downwards. Therefore I am currently looking for downtrending stocks that are rallying.

I have found three and I have placed the following orders. These orders are set to cancel if they don’t execute tomorrow.

Name
Order
Open
Stop
Debenhams
Sell
55.5
58.5
Galiform
Sell
57.5
60
Punch Taverns
Sell
62
67

Don’t take my posting here as a trade recommendation. The information contained within this blog is for educational purposes only and should not be taken as advice of any kind. The author of this blog will not accept any responsibily for any loss made by anyone acting or refraining to act as a result of reading material contained within this blog.

I was also keeping better records of my trades back then which is something that I will be re-starting from now on.

My quest for the ‘Holy Grail’ Stops here. There is no magic indicator, or system that is going to give me a winning trade every time. I’m going back to a trend following strategy and see how it goes for a while.

Unfortunately I can publish Malcoms strategies from his book here as I would get sued for copyright infringement. If you want to read about the strategies I guess you’ll just have to buy his book.

Thanks to “G” and Steven for the links to the stock sectors and their constituents. I think I may look to making these part of my weekly analysis as well.

Anyway enough for today. It can only get better from here. Hopefully!

Until next time
“May the markets be with you”
Spread Betting Beginner

Category blog | 2 Comments »
Weekly Analysis, comments and some changes - July 4, 2010 by Harry

Are you profitable? Have you voted yet? If not please do.
Sorry for the Intro above. I will be posting this on most of my future posts from now on so that people that are new to the blog will vote and we will get a good reflection on how many people are profitable via spread betting.
I would like to thank Steve who posted a comment about on becoming profitable here. I see you have attended Traders University. I went to a free seminar given by them and although it seemed like a good idea it was way to rich for my blood. At over £2000 for a two day course I simply couldn’t justify the expense, therefore I decided to try and teach myself the same things that they were promising. I think you probably can learn most of the technical analysis side of things via books, but the one thing that they offer which really did appeal to me was the coaching side of things. I can imagine it would be quite useful to have a seasoned professional looking over your shoulder telling you where you are going wrong.
I have made some slight changes to my weekly analysis. I have removed the RSI indicator as I don’t really ever use this indicator anyway and I don’t know why I started using it in the first place. I think by having it in there it was giving me mixed signals and only serving to confuse things.
I am also not attempting to try and predict what I think is going to happen over the next week as this is just impossible. What I am doing is looking at what is happening in the market and trading based on what is happening rather than what might happen.
If the market is up trending according to my rules I will only look for long positions. If the market is down trending I will only look for short positions. If the market is moving sideways I will look for both short and long positions.
I am also considering doing weekly sector analysis as well. The main reason I haven’t done this so far is time and not always knowing which sector a company falls into. I know some of them are obvious but some of them are not so obvious. So I am appealing to any one that has a list of all the stocks and their associated sectors to please drop me an e-mail or leave a comment. Any help here would be much appreciated.
As you may have noticed most of these changes have come about based on Steves comment so thanks again to Steve. Steve you also state “I have a written trading plan which I stick to, and I have worked hard to developed a very “rule-based” approach to my trading which I believe gives me an edge”. I know it’s a bit cheeky but would you care to share any of your trading plan and rules? It’s fine if you’d rather not, I just thought I’d ask. If you don’t ask you don’t get.
Also I’d like to thank “L” who left a response to my comment on Tony Lotons blog. I asked about a strategy he is using and he replied:

SBB – A simple index strategy using only the 50ma I use is, if we’re closed below a 50ma, and the 50ma is pointing down I will play the short side and look for entries on rallies near the falling 50ma. This would give you a good risk / reward. If the 50ma is flat by the time price has rallied back to it I will pass on the trade, and will look to go long again if price closes above the 50ma and it’s pointing up. Close out longs when price closes below the 50ma, and the 50ma is pointing down (this takes discipline). Shorts do the opposite. To re-enter the market wait for price to cross the 50ma, and wait for it to point up if price is above, and down if below, but make sure the entry is with a few % of the ma.

For the last few trades, that got me long at 4360 on 17/7. Closed at 5220 on 27/1. The 50ma was flat by the time price rallied to it, so I waited for next signal. On 1/3 50ma pointing up, price above so long at 5404. Sold at 5300 when I was happy the 50ma was pointing down. Then waited for price to rally to 50ma, this time it was pointing down so went short at 5263 on 22/6. Trade still open.

This is an example of how simple you can make things. The tricky bit is discipline, and money management. IMO The entry rules do not need much thinking about.

It certainly got me thinking about things. Maybe creating a simple MA cross over strategy is the way forward for me. It’s certainly worth looking into.
I have made some changes to my strategies page. Infact I have created a new site dedictaed to them. I will be updating this as and when I get chance. You can check it out here if you are interested.
Anyway that’s all from me for today. My weekly analysis is here.

Until next time
“May the markets be with you”
Spread Betting Beginner

Category blog | 3 Comments »
Are you a profitable Spread bettor? - July 2, 2010 by Harry

Not much is happening today. No new trades and the few that I still have open aren’t up to much either. There’s a while to go before the end of the day and as we all know anything can happen, we’ll only know for sure how the day pans out when it’s over.

 

I have decided to add a new poll to the blog. I have been reading how many people actually make money spread betting and with figures from 75% to 90% lose money I am interested to know how accurate these figures are. Therefore the poll asks one simple question with the aim to get a better view on how accurate this figure is. The question is “Are you profitable via Spread Betting?”. I don’t mean have you ever made a profit from spread betting because if you’ve made a £10 profit with a £100 loss then you (like me) are not profitable. You can only answer yes to the question if you are profitable Long term. E.g. if your account balance is greater than the amount you started with.

 

I’m running the poll for a 3 months from now so you have plenty of time to answer the question and if you become profitable in that time feel free to change your answer. I think it will give an interesting insight to how many people actually make money spread betting.

 

Please tell your Spread Betting friends about the poll, I want to get as many people as I can to vote so it can be an accurate assessment as possible. And if you are profitable and you want to share your secrets with other people feel free to e-mail me or leave a comment.

 

Anyway that’s all from me today. I’ll post tomorrow with my weekly analysis and any new orders for the week. Although I am thinking of changing to working from daily charts for potential trades using Malcolm Pryors buying dips and selling rallies strategies from his Spread betting handbook.

 

Until next time
“May the markets be with you”
Spread Betting Beginner

Category blog | 1 Comment »
A film Review? - July 1, 2010 by Harry

I watched a film the other day called the Oxford Murders. I’m not recommend you watch it because I thought it was average at best. It did strike a chord with me though. It’s about a professor and his student who try to stop a series of murders seemingly linked by mathematical symbols. The thing is though as they go along trying to figure things out they mention about Human beings finding an order to everything.
What is the next number in the sequence 2,4,6,8…..? Most of us including me would say 10, but why not 11 or 12 or 438 or any other number? The fact is we create the sequence in our minds that each number  is equivalent to it’s predecessor + 2, 2+2=4 4+2=6 6+2=8 and so on.  If the sequence went 2,4,6,8,438, I’m sure there will be some way to calculate the sequence.
What I am trying to get at here is that although the obvious choice is 10 it can in fact be any number and someone somewhere will find the calculation that fits the sequence. This is how I feel about my trading sometimes. I feel like I am trying to make things fit and I think that I see patterns in the charts but most of the time they turn out to be a load of rubbish. So where does this leave me? Well more confused than ever. I think I need to just try and keep things simple. Rather than thinking I see patterns emerging in charts I should look at what the chart tells me has been happening a trade based on what has been happening rather than what I think is going to happen.
Alan put it best a few weeks ago with his K.I.S.S (Keep it simple stupid).
Does anyone else feel  like they only see what  they want to see in a chart sometimes? I’m not sure how to stop myself doing this but I know I need to work on it.
Moving On:
My position in standard life stopped out today for £13 loss. I currently have 3 open positions and I am in no hurry to add to them.
On a brighter note my Dad, who is even more of a spread betting beginner than me, made a quick £30 of a trade in BP today. He’s always had an interest in stocks and shares but is more of a hit and hope trader than trying to use any kind of technical analysis etc. The thing is he’s doing way better than me. He hasn’t traded for ages and the first time he does he makes himself a tidy little profit. Not bad considering his account size is less than £200. So well done to him. It’s more sheer luck than anything else but maybe that’s where I’m going wrong!
With the FTSE 100 only looking like it can go lower at the minute I’m looking for some possible shorts. I’m going to try Malcolm Pryors strategy from his Spread betting Handbook. Look for trending stocks, wait for a pull back then get in on the action if the price returns to the trend. If you haven’t read his spread betting handbook it’s well worth a read. It was the first book I ever read about spread betting and I think if I had followed most of the rules he outlines in there I wouldn’t be in such a mess now.
Anyway I’ve rambled on enough today.

Until next time
“May the markets be with you”
Spread Betting Beginner

Category blog | 0 Comments »
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