Today I moved a few stops and placed one new spread betting order for a new trade. The new trade will actually be a pyramid of an existing position. The new spread betting order is a pyramid of my premier foods position. The stock has started a nice new uptrend since I purchased it back in December and is currently showing a guaranteed profit of around £11. Not too bad considering my initial risk was only £4. So I decided to try and pyramid the position. Rather than just buying straight away I decided I would do some more analysis and pick a reasonable entry position and place the appropriate order. I’ve placed the new order at 31.5 with a stop set at 29.5. It’s not a guaranteed stop as I would’ve had to place that at 28.2 or lower. I may look to changing it to guaranteed as the position moves into profit. The new order is with Capital Spreads and the one good thing about them is they seem to have a much less minimum stop distance on guaranteed stops than IG Index.
Getting back to my new order. The logic behind placing my buy order at 31.5 is because the most recent upward movement has a low of 29 and a high of 33.5. Now according to pring in his observations of intermediate trends a retrace should continue to 1/3 to 2/3 or the previous move. Therefore setting my buy at 31.5 is roughly a 50% retrace of the previous move. Weather or not it will pan out like this is another story. As we all know anything can and will happen in the financial markets but I think for the extra £2 risk this trade presents I think it’s worth a try.
Back on the subject of stops, I also had a call from someone at SpreadCo today. She was asking me if everything was ok with the platform etc. There were a couple of things that I pointed out. The main one being that if I make a trade via a market order there is no way to add a non-guaranteed stop. The only way currently is to manually set up a closing trade to act as a stop or place an order t and assign a stop that way. She said they are looking to add non-guaranteed stops to their market orders around July this year so watch this space for that. I have to say so far I’m reasonably impressed with SpreadCos Saturn Trading Platform. I know they develop the whole thing in house which includes their charting package. Therefore they don’t use external charting software like other spread betting firms such as IG Index & Capital Spreads, which is good news for us as we can request new features and changes etc. I’m sure if enough people request new features they will sit up and listen.
Thanks to Big Al for his comment on yesterdays post. I feel your pain on your recent draw downs. Hopefully you luck turns around over the coming weeks and months.
Until next time,
“May the markets be with you!”
Harry,
The Spread Betting Beginner
