For those that are interested you can read my weekly FTSE analysis here.
I would like to thank Tony Loton again for posting a comment about my blog on his earlier this week. He wrote “They say that imitation is the sincerest form of flattery, and it seems that Spread Betting Beginner has decided to maintain a similar blog to my own.” Well Tony I think you should feel flattered by me maintaing this blog. It was because of his blog that I decided to start this one. I think that the two blogs serve a different purpose though. Tony is demonstrating his “Position Trading” Strategy, where as I am someone who is still trying to find a strategy that suits me and stop wasting my time and money trading foolishly. One day, hopefully, I will be able to keep a blog similar to his where I am a successful spread bettor and I can demonstrate my own strategy.
I have to say that I have read Tonys “Position Trading” book and really liked it. I like the idea of his position trading strategy, however, I think for the beginner, such as myself, its a difficult strategy to implement and stick to. I think any beginner will find a drawdown in there portfolio value from £1600 to £600 in 4 weeks too much to handle. It’s a good approach but I think any beginner will find it too emotional for them and end up giving up before it gets a chance to really come good. I think if you have turned £300 into £9000 in 6 months as Tony did then you will be more comfortable riding the storm and excepting the drawdown as a fact of the strategy in anticipation of the huge return that is possible. I think if the strategy had some definition of when to wait on the sidelines and avoid the massive draw downs it would appeal to the beginner more. To be honest this is kind of why I have recently adopted the momentum divergence strategy. The key Idea of the strategy is to try and find the bottom of a downwards movement much as Tony is doing with his position trading. I think using the momentum divergence strategy gives more of an edge to the trades. That said he looks for stocks that are bouncing off support levels and when he trails his stops he pays respect to recent support levels to keep his positions open as long as the price is rising.
If you want to learn more about Tonys strategy I would recommend reading his book. It has some useful stuff in there and I think it is one of the most straight forward books I’ve read. He has also written some other good books on stop orders, Don’t lose money and financial trading patterns. He has written some others but I have yet to read them.
I’d like to thank Alan for the comments he left here the other day. You said you are short on 4 positions. I have a question for you if that’s ok. What strategy are you using to find these short positions? Is it one of Malcolm Pryors from one of his books? I would be interested to know as I need to work on a shorting strategy myself.
Anyway I think that is everything for now. I would like to thank “E” for his e-mails this week I will respond to your latest one soon I promise. Anyone else that would like to e-mail me about anything please feel free to do so.
Here’s a quick account summary.
Date
|
Valuation
|
Cash
|
Available
|
Risk
|
%
|
11/06/2010
|
318.16
|
264.16
|
121.09
|
81.7
|
2.95
|
The risk value may change as I have yet to check and move my stops this week. I will try and post my new orders for this week, if there are any, later. If I can’t do it later it maybe tomorrow or Monday morning.
That’s all for now.
Until Next time
“May the markets be with you”
Hi
I'd like to say that I'm operating a very clever and sophisticated strategy to find short positions – but, sadly, I'm not.
In a nutshell I look for stocks that are giving out bad news, whatever it might be. I then look at the charts and if I'm seeing a down trend (the longer the better) then I consider a short position. I look at a few other things briefly and then I make an OTO (order to open) which is a few points below the current price…
..so far this simple strategy has worked reasonably well; at the moment I have 2 out of 3 short positions in profit – sadly the fourth had a good day and promptly shorted out(!).
The main problem with short positions in the same index as long positions is probably obvious: if the FTSE has a really good day then all shares will rise (even the rubbish ones).
Perhaps I've just been lucky so far?
Having said all this maybe a few short positions makes for a reasonable balance in an index? I don't really know and only time will tell I suppose. Let's hope for a good week as we're long overdue.
Just something to consider….
Is now a good time to buy into BP???? Things seem to be slightly more optimistic and the share rose about 7% on Friday. I think I'd like to see a bit more good news and perhaps another few days of upwards movement to at least 450 or so?
Anyway good trading for the week ahead,
Regards, Alan
Tony, you make me laugh. At least now you admit you're a beginner and not a trader!
It most take a lot of time to pose as another spread better, and then post so many links to your site. Do you think it will really help sell more cr*p books?
Just so you know Anonymous it is not Tony Loton that is keeping this blog. I am not going to post my name on here as I work full time and I would not want the people who I work for to discover what I am doing sometime during working hours.
The reason there are links to Tonys pages and books it because on the off chance someone reading this blog clicks the link and buys the book I get a small commision from the sale.
I did contemplate not allowing this comment on here as it's not inkeeping with the overall content of the blog.
You have a right to believe what you want to believe but I guarantee you I am not Tony Loton. Maybe one day when I am successful enought at spread betting I will be able reveal my true identity and then you will have egg on your face. Until then I have no other way to prove it to you.