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

July 4, 2010 by Harry
Category: blog