So here we are at the end of another Spread Betting week and the start of a new Spread Betting month. Is it just me or do these weeks and months seem to fly past quicker and quicker. I think it must be my age, the older you get the faster time seems to pass by. Anyway with the new month of September brought new hope as the markets rose but then today hit and with the wide belief of the US jobs falling short of estimates the markets have dropped. It seemed until today that things might be starting to look up but I suspect the opposite is more likely. I suspect there may be a surprises to come but the question is what affect will they have on the markets?
I actually managed to make two new spread bets yesterday. There were loads of super trend crosses which were all in the upward direction, a few also met the criteria from Vince Stanziones system so I made two trades. This placed me in the ideal position of having two long and two short positions open so I was poised for a move either way. I checked my positions again at the end of the day yesterday and noticed that one of my shorts had stopped out for a £12 loss. Therefore I’m actually more long than short, not ideal if todays down move continues into next week. Still as we all know in spread betting we have to take the rough with the smooth so I’m not overly concerned. As ever time will tell how things pan out.
You may remember me telling you that I would be writing an article for Your Trading Edge magazine, well it was published a few days ago. I managed to find a copy of it online so for those that did not subscribe to the years free digital subscription you can read it here. It’s all about spread betting strategy development so take a look and if you want to give me any feed back on it your more than welcome to contact me or leave me a comment below.
I have to say with all the recent movement in the markets I kind of feel that maybe I’ve missed out a little. However I know that this is just my mind playing tricks. It’s tough sometimes to see through this and realise that just because the markets have fallen considerably it doesn’t mean I’ve missed the boat. The markets could continue to fall, in which case the FTSE will enter down trend mode and I’ll look to hope on board with some shorts, or the FTSE will enter a new uptrend in which case I will be looking to hop on board with some longs. I think it’s important to remember that I am not in the habit of calling the market top or bottom (even if I do like to speculate, but het who doesn’t). I want the market to start to trend nicely so I can hop on board and get my slice of the action before things turn sour grapes. I guess one thing I should work on it some strategy for sideways markets. It’s certainly something for me to consider, not that I don’t have enough to deal with already.
Oh, my two new trades yesterday were both long trades. One in Old Mutual and the other in BWIN Party Digital entertainment. You will probably not be surprised to hear that both are currently showing losses. You never know your luck things could turn around.(To view my latest Spread Betting Trades click here) I have been trading mostly with SpreadCo recently because of their tight spreads, but they don’t offer BWIN so I placed that trade with Capital Spreads. I keep meaning to take a look at Capital Spreads new back testing functionality. Has anyone had a play with it yet? If you have I’d love to hear from you to see how you got on with it.
Right, that’s all from me for this week. Let’s hope the weather keeps up and we have a nice weekend to finish off the so called ‘summer’.
Until next time,
“May the markets be with you!”
Harry,
The Spread Betting Beginner
Things seem to be looking up. The FTSE 100 has had another good closing 125 points higher. It would seem that the bulls have been victorious for now at least. With prices having past the previous high is this the return to an uptrend? I’m still sceptical, the price has only just passed the most recent high and it could still turn out to be a new resistance level. That said if a new up trend does emerge then I shall be looking for long positions only.
At the moment my two open short positions have taken a bit of a hammering. So much so what was once looking like a reasonable profit has become a small loss. It’s the nature of the beast unfortunately, if I want to keep positions open for more potential profit I need to move my stops in line with my strategy. I’m not concerned anyway I know that if my stops do get hit the loss will be small enough to manage and as we all know losses are a fact of life when trading. Sure I’d love to always make a profit, who wouldn’t, but I learnt pretty early on that make a profit 100% of the time is just not possible.
I had a look for some new spread bets today but nothing that fits with my risk tolerance. I think the best opportunity had a risk of 60 points associated with it which is way to much for me. If I had the ability to use fractional bets like City Index or MF Global offer then I may have been able to trade. Maybe I should look to opening an account with one of these spread betting companies, that would take my total spread betting accounts to 7. I think it might be time to start consolidating the dribs and drabs I have in some of these accounts to my favourite account. The question is which is my favourite. Tough question, at the moment I am trading mostly with SpreadCo mainly because of their tight spreads and their charts are pretty good as well. The only thing that lets them down is the range of instruments they have one offer, that said I’ve never struggled to find an instrument that I want to trade. Something for me to think about I guess.
Right that’s you guys up to speed for now. I’m hoping for some decent trading opportunities to come along soon, which will give me more to write about.
Until next time,
“May the markets be with you!”
Harry,
The Spread Betting Beginner
I was sent a request from a blog reader asking “i hope you can help me can you explain to me how to read moving average ma 20 ma 50 ma 100”. All I can do here is explain how I use Moving averages for my own trading.
Moving averages can be used in several ways. There are two main ways that I use them for my own trading. Firstly they can be used to help identify trends. The way the 20, 50 & 100 moving averages would be used to identify a trend is by looking at their value and the direction they are currently pointing.
For instance we could suggest an uptrend can be defined if the 20 is above the 50, the 50 is above the 100 and all three moving averages are increasing in value. The converse is true for a down trend.
Moving averages can also be used to make trades or exit trades. For instance a simple moving average system could be to buy when the 20 crosses above the 50 and sell when the 20 crosses below the 50. In fact I one of the strategies I have on my spread betting strategies page is a moving average cross over strategy. It uses the 50 & 200 Simple moving averages but still illustrates its use.
This is all I really use moving averages for. I’m sure there are far more uses for them but I’m a big fan of keeping things simple so I only use them as I’ve described. If you have more questions about moving averages I’m sure there will be people over on the spread betting forum that can help.
Thanks again to Chris for his comments on my last blog post, “Where now for the FTSE“. I kind of owe Chris a slight apology as I think I may have come across slightly rude in my latest news letter. Thanks again for responding with the comments it’s always interesting to get someone elses perspective on these things. I’m not sure about sending you Malcoms new book though. I’ve already sent one to you for guest posting, I think I will hold onto this one for a new guest poster.
My own spread betting is still pretty quiet. There haven’t been any opportunities coming my way but I’m happy to wait and see. I have that much to be doing with other stuff I’m actually glad it’s gone a bit quiet on the trading front, on the down side it does mean I don’t always have much to blog about. Still there is always the FTSE for me to speculate on, even if I don’t trade it.
Enjoy the rest of the bank holiday weekend everyone.
Until next time,
“May the markets be with you!”
Harry,
The Spread Betting Beginner
It’s been a while since I last posted and I ‘m trying to remember what has happened. I think last time I posted the FTSE had just tanked 240 odd points. Well since then it seems to have stabilised somewhat. With 5000 proving to much to penetrate in a meaningful way, could 5000 be the support level required for a bounce? Personally I don’t think there is enough good news in the pipe line to give a meaningful rally to cause a new bull market but hey what do I know. I’m sure something will probably happen to spark a rally from the bulls. With the recent down move failing to make a new low I’m not really sure what will happen now. As ever though I am not in the habit of trying to second guess what the FTSE is going to do, although I do like to speculate. Nope I prefer to look at what is happening and trade accordingly. So what is happening with the FTSE? Well it would seem that the market is taking a breather to digest the massive moves we’ve seen recently. This consolidation behaviour seems to happen all the time. The question is where will it go from here. It’s too soon to say a new sideways market is opening up, I would be leaning more towards potentially being in down trend mode. If the price falls below the most recent low then I would think a new down trends has been confirmed. Until that point I’m on still on the side of shorts as I just don’t see any news good enough on the horizon to drive the markets high enough. I know there are rumours flying around about QE3 from our friends across the pond but will this really prove enough?
Thanks to David and Chris for their comments left on my last post Gambling on the FTSE 100 & Pyramiding Spread Bets. On thing I would suggest to Chris is learn to go short. In my view one of the key benefits of spread betting is the ability to go short as well as long. There really should be no difference between the two in your mind. It’s good that you like to sit out the down moves but why not profit from them as well? Markets fall much faster than they rise and bug profits can be made from down moves as well as up. That said this is not advice. You can make your own trading decisions as I’m sure you do and will continue to do so.
Chris I’m assuming from your comment that you received the Naked Traders Guide to Spread Betting that I sent to you? Glad you enjoyed the read. I agree it’s aimed more at complete beginners but it’s certainly interesting reading about others trading stories.
My own spread betting is treading water at the moment much the same as the FTSE. I still only have two positions open with SpreadCo which are pretty much doing nothing at the moment. I keep checking for new trades but nothing is coming along, I think it’s because of the recent volatility. The super trend indicator is based on ATR which is a volatility indicator, therefore when volatility is high the price is going to be further away from the indicator and take longer to cross. There have been a few crosses but none that meet all my entry criteria. Still it’s fine with me, when the markets want me to trade they will let me know. I’ll be here waiting when they are ready, I’m in no rush.
Until next time,
“May the markets be with you!”
Harry,
The Spread Betting Beginner
Well, well, well. What a day. The FTSE 100 shed around 250 points today. That’s right, it’s not a typo you read it correctly a whopping 250 point which is almost 5% in one day. Now is it just me or is that a massive fall. In fact it could be the biggest daily fall since I started spread betting back in February 2009. Don’t quote me on that as I’m not sure if it’s true but It could be. If someone wants to look it up feel free to do so. All this downward movement comes the day after I suggest we may be about to confirm the existence of a new down trend. Don’t believe me? Well read yesterdays post entitled “New Down Trend for the FTSE 100”
It’s still not confirmed until price falls below the previous low however I suspect this will only be a matter of time before it happens. That’s my opinion anyway. It might not happen but we’ll wait and see.
I do have one confession to make today about my own trading. I played the FTSE 100 a little. I say played because I had no real strategy behind the trades and I really was gambling. I took a few minutes to realise what I was doing before I gave myself a kick up the back side and stopped it. Anyway I made a few pounds, not mega bucks but it was better than a loss. I certainly don’t recommend trading the FTSE in such volatile conditions. It can move 10, 15, 20 points in a matter of seconds and you can easily rack up losses pretty quickly if your not careful. Best thing is to trade a strategy and stick to it. I traded using my Capital Spreads account which I haven’t done for ages. As I mentioned it was my birthday last week and they sent me an e-mail with a £50 top gift for my birthday. I don’t know if they do this for everyone as they certainly didn’t do it for me in 2009 & 2010. I suspect it’s because my account was lying there dormant they thought it might entice me to trade again. They were right it did. However I shall be using the £50 gift to use for my trading strategy, hopefully I can trade my Capital Spreads account back up to where it was two years ago.
I thought it was nice of Capital Spreads to give me the birthday gift. I don’t even think I got a birthday e-mail from the other spread betting companies such as IG Index or SpreadCo. I think it’s a nice touch when you receive things like that, it certainly got me spread betting with them again which I’m sure was the desired affect.
Todays Spread Betting action.
I pyramided into an existing position today. With my two short positions having retraced for the last few days I deemed it would be a good time to pyramid one of them. Why one and not both? Well one has some locked in profit and the other still has risk therefore the one with locked in profit was the one I decided to pyramid. Placing the pyramid put the position back into risk but only by £10 so I’m ok with that. If the markets continue to fall and take my positions with it I should be a happy bunny. There have been no new trades as there are none that meet my criteria. Still I keep checking everyday and should the right opportunity arise I’ll be trading it.
Until next time,
“May the markets be with you!”
Harry,
The Spread Betting Beginner
