My positions in Home retail, logica & aegis all stopped out today. They were all short positions and lost me a total of £12 across the three trades. I decided to take a look at the charts again to try and shed some more light on where I went wrong. Interestingly enough the stocks would’ve been potential momentum divergence buys according to the momentum divergence strategy. I think when I am looking for future sells & buys I will take a look at the 6 week momentum indicator also. This will limit my potential trades but I’d rather place few high probability trades than loads of low probability trades.  The only question is does this actually increase my probability of a winning trade or will it only serve to confuse things further?
I decided to take a look at my one remaining sell position ,Paragon. This also has shown momentum divergence. I guess it’s hardly surprising since I spotted the FTSE all share had momentum divergence two weeks ago and a trade would’ve triggered last week as the price passed it’s high of the previous week. Should I have taken this as a sign that the price was about to reverse from the down trend indicated by the MAs & ADX? I don’t know. Just when I think I’m starting to make some progress with my analysis and not trading recklessly I stumble on something like this and I feel like I am back at square one. I guess I’m just going to have to chalk this one up to experience again.
I’m thinking to incorporate this in my trend spotting and not trade any that are showing momentum divergence according to my strategy. I wonder if this will help? I don’t know what to think. All I know is this is hard work. If you are looking for an easy way to make money then find something else. I think robbing a bank might be easier than this.
I have to say my long term goal of making £100+ a day consistently seems like such a long way off. I seem to be getting worse at trading rather than better. I think I would settle for a consistent £1 a day at the moment.
I’m going to spend some time now looking for new potential trades. I may just look though, I’m not sure if I will place any orders yet. Maybe I need to take a trading holiday and come back and try again. I’m not  sure what to do for the best. Anyway time will tell.

I’ve just been looking at some charts using pro real time. I was wondering if anyone that reads this uses them and if they ever use their attempt at identifying support & resistance levels? How reliable are they? Has anyone ever traded based on them? Please let me know. Either leave a comment or e-mail me, which ever you prefer. Thanks.

Until next time
“May the markets be with you”
Spread Betting Beginner

July 13, 2010 by Harry
Category: blog