As regular readers of this blog will not doubt be aware I have started trading recently using the Super Trend indicator in proRealTime. With it showing some slight success I am willing to run further trials using it to see if I may have finally found my way to successful spread betting. As we all know losses are a fact of life in the spread betting world, what matters is that such losses are small enough relative to our account size that we can “Live to trade another day.” The fact is that I have kept my losses small which is the only reason I am still trading today. I could’ve easily been wiped out months ago if it hadn’t been for my money management.
The main areas I have struggled with over the last months is the lack of a buying/selling strategy that I have been happy with and that fits with my trading style. I still really like Tony Lotons position trading approach but it does require some experience when it comes to moving stop levels etc. Using the super trend indicator the stop levels are calculated and adjusted acording to the settings you use all you need to do is read the numbers from the chart.
I have made a slight adjustment to the strategy. Rather than just buying when the super trend line crosses price I have looked for stocks that are near the stop price of the super trend. The idea is that I get in at a better price and have less monetary risk and therefore the upside potential is greater. That’s the theory at least. The reality will probably turn out to be a completely different story.
So today I have made one new trade. I went long on dimension data at 119.6 with a stop set at 115. The super trend stop level is around 117. There are two reasons for setting my stop at 115. These are: sometimes the price can spike through the super trend stop price and then continue to rise(or fall) and 115 is well below the most recent low of around 118. I like the look of the chart here, price rocketed up back in July and has been consolidating ever since, the stock has been uptrending ever since October 2008 and the price reached an all time high of around 700 back in 2000. Of course the stock could plummet, as could the whole market but I think my reasoning behind this trade is sound. Hopefully the uptrend continues all the way back to 700. Highly unlikely but hey, a man can dream.
Anyway that’s all from me for now. I know I’ve asked this before but if anyone has any information on the super trend construction or knows someone who knows then please get in touch. I would love to share more information about this indicator with everyone.
Until next time
“May the markets be with you”
Spread Betting Beginner