I will try to give a brief explanation of my current spread betting positions. I have a confession to make that for most of these positions I have copied someone else. Inchcape, Yell, Redrow, Sports direct, premier foods, LLoyds and RBS are all copied from someone else. These are all stocks that have dropped significantly from their highs back in 2007. The idea here is that they have bottomed out and should start to rise again and we can capture as much of that rise as possible.
Independent news is one of my own picks. This basically follows the same principles as above. This bottom picking strategy is a new strategy for me that I am currently trying out.
William hill. This pick was loosely based around Nicolas Darvas box theory (or my interpretation of it). William hill was trading in a box which I had Identified. The bounds of this box were 200 and 190. I therefore set a buy order at 205 to indicate a clear break out from the box with an initial stop at 185 incase the breakout did not continue. Needless to say my order was triggered (only just) and then the price dropped back to inside the box. There are several things that I have done wrong with this trade. They are: I risked to much on the trade. £20 this does not fit with my 1% risk strategy. The box theory that I have developed is probably wrong and I may pay the price for finding this out. There was one other reason why I thought the price of william hill may rise and that is the world cup is this year. This will mean an increase in bets being placed and an increase in revenue for william hill. Thus far the position is showing a loss. However it has only been open a few weeks so i will give it more time to develop and move up my stop to minimise the loss or lock in profits
Taylor Whimpy. These are house builders. The housing market is was down from its high back in 2007 and could possibly start to come back soon. I have taken a £10 risk on this bet which is within my comfort zone.
Arm holdings. This stock is currently in an up trend. (ADX(14) >= 30, 20day MA > 50day MA, 50day MA > 200day MA) The stock had pulled back off the trend so I deemed it s good time to enter and capture some of the trend. I set my stop at 2*ATR(Average True Range 14day) and will trail it upwards untill break even. From Break even I will allow the positon to breath and then trail it at 3*ATR.
DSG, F&C Asset Management and SIG are all bottom picked stocks. All of them are way down from their highs of a few years ago and could be ready for a rebound.
This has been a very brief overview. When I place new trades I shall aim to give more detail.
I am avoiding trading indicies for the moment because I have tried it in the past and proved that I am not ver good at it. I will begin to trade them agian when I have re-gained some capital and I have read more about technichal analysis.
I will be posting my recommended reading list of books, Some detail on the free charting package that I use and bring you more upto speed with my trading and strategies as time goes on.
Disclaimer: Don’t take my posting of these trades as a recommendation that you should make the same trades!
Until next time,
“May the markets be with you!”
The Spread Betting Beginner