Quite a lot has happened since I last posted a spread betting update. Firstly my position in Shanks stopped out at break even. At least it wasn’t a loss but it certainly was a bizarre stop out. The price dipped very quickly, stopped me out, then rebounded to it’s previous price before rising slightly. (See chart below) It does make me wonder sometimes. Is mister market out to get me. If you take a look at the 10day ATR for Shanks it’s currently around 2.5, so the dip represents around 2 and a half times this value. I really don’t see anyway to allow for this kind of behaviour, the only thing I can think is to use manual stop losses but I can say for sure I wouldn’t have exited at the value my stop was set at. I wasn’t watching the price when it happened for one and two if I was I probably would’ve started to think I’ll wait to see if it rebounds, which in this case it did, but so often it doesn’t and that’s when losses start to get out of control. Anyway I guess it’s just another one of those things that a spread bettor has to put up with. Hopefully it won’t happen too often.

 

Click image to see larger version. Image © SpreadCo

Next up my Misys position pyramided. I used the strategy I talked about previously using a value of 1xATR(10) for the dip. My order executed at 388. It’s sods law that all the price has done since then is drop, fortunately it hasn’t dropped too far. Hopefully the pyramid will stand up but who knows. We’ll have to wait and see I guess. The 1xATR(10) is a bot of an experiment at the moment and I have no idea how this is going to pan out. I may tweak this value in the future but for the time being it’s a bot of a ‘suck it and see’, Ooooh Errr!

 

Thanks to Jamie, the spread trader & Ted for taking part in this months FTSE100 competition. I’m not sure why only three people entered? Lots more have signed up to the news letter and the competition is completely free. I did try to give everyone enough warning about entering. I guess I could’ve left the closing date for entries until some time on Sunday as the markets were closed anyway. Maybe I’ll do that for next month. If you have subscribed, please do enter next months competition. How I said it’s completely free and you have to be in it to win it. If you have yet to subscribe then please do. The next news letter will be out in the next few weeks with a brand new competition.

 

Ok, I think that’s everything for now. As I’m sure you’ve gathered by now my updates have dropped off a little, mainly due to time constraints. But don’t worry I’m still here, updating you as regularly as I can. If I haven’t updated you can always read the latest spread betting news from Capital Spreads. It’s updated daily so while your waiting for me to update you can read that to keep you entertained.

 

Until next time,
“May the markets be with you!”
Harry,
The Spread Betting Beginner

Today is a very quick post to remind all those that have subscribed to my news letter. The FTSE 100 competition for June closes at midnight tomorrow. If you have not submitted your entry by then you will miss out all together this month. So far Jamie is winning with his guess of 5879. I realise that most people will probably wait until the last minute to submit an entry as you will have a better knowledge of the price action. You need to click on the link in the e-mail you received to enter. Just going to the page and trying to submit an entry will not work. If you would like to take part but have not subscribed it’s not too late. Subscribe and verify your e-mail address and you too will receive an e-mail containing the link to enter.

 

Anyway I just wanted to let you know so it’s fresh in your minds for tomorrow.

 

Until next time,
“May the markets be with you!”
Harry,
The Spread Betting Beginner

Today & yesterday I have done nothing to my spread bets. Actually that is a lie, let me re-phrase. I have placed no new trades over the last two days. I have adjusted a few stops where necessary but I have done nothing else. I looked for new trades but nothing that matches my entry criteria so I’m playing the waiting game. I did contemplate pyramiding my existing Misys position yesterday and today as it has pulled back slightly from a high of almost 400p. I resisted as I’m not convinced the pull back is completely over. This got me thinking about when to pyramid existing positions and I think I may have a rather unique solution. “What’s that then?” I hear you ask. Well I’m not telling, it’s top secret. Hang on a sec that doesn’t sound like me. The whole point of this website is to share information. Ok then, you twisted my arm. I’ll tell.

 

When I buy into a stock and it trends upwards I trail my stop as the price rises. But what if when the price starts to re-trace I was to trail another stop to buy in again when the price starts to rise again. Sounds a bit complicated so I’ll do my best to explain further. If you still don’t get it please e-mail me and I’ll try to do better.

 

I’ve done a little sketch to help try and explain things further. So here goes. We buy into an instrument at the red X (Initial buy). The price rises and we raise stops inline with our strategy. When the price starts to fall back, retrace, dip or whatever you want to call it we mentally trail the price with a new buy order. This buy order would be trailed at some factor of ATR away from the price. If this new buy order hits a price that is less than or equal to the most recent high then we place this order with the spread betting firm, bearing in mind this will need to be updated daily from now on. If the price continues to fall and hits our stop then we exit the trade and cancel all associated orders. If however, the price starts to rise again our new buy order will be hit and we will have pyramided into the existing position. Then as the price rises we continue to raise our stops in line with our strategy. When the price dips again we do the same process as before. Mentally trail a new buy order at some factor of ATR until it falls below the most recent high. Once it’s below the most recent high we place an order to buy, manually updating this price if the price falls further. When prices start to rise again we pyramid into the position again and keep adjusting stops as necessary. If the price dips but our new buy price never falls below the most recent high then we leave it and do not pyramid the position at all.

 

Click image to see larger version

 

So there it is. What’s that “Clear as mud!”. Hopefully it makes sense. If not please get in touch either via e-mail, over on the spread betting forum or leave me a comment. It would be good to hear other people thoughts about this new idea of mine.

 

Right that’s your lot for today. Hopefully there will be more trading soon, unfortunately it’s out of my hands. I just do what the markets tell me to do these days and I’m hoping I’ll get rewarded for doing it.

 

Oh and just so we’re completely clear this is for educational purposes only. It’s not advice or a recommendation of any kind. Please see my disclaimer and risk warning for more information.

 

Until next time,
“May the markets be with you!”
Harry,
The Spread Betting Beginner

Over the last few days trading I made one new trade. I haven’t blogged about it until now as I’ve been busy with other things. The new trade is in Britvic. It’s a short trade at 415.22 £1 per point. The initial stop was quite far away at 459 but because the price dropped so rapidly I new that the super trend value would fall sharply. The stop now sits at 445 which is still too far away really but I decided to take on the additional risk as it was a super trend cross and a sell signal from Vince Stanziones system. Misys was another super trend cross & Vince stanzione signal and although the initial stop was really to far away it’s now set at just above breakeven. So far using the super trend cross & Vince Stanzione signal I’ve made two trades. We’ll wait and see how they pan out over time but so far I’m encouraged. So much so I’m looking for both the signals before I make a trade.

 

Misys is currently pulling back from making new highs. It almost touched 400 the other day and since then it’s been pulling back. I’m going to wait until the pull back is over and the price starts to rise again then I think I will be looking to pyramid my position. I think pyramiding my winners is the only way I’m going to start making some serious money. Winners don’t come along often enough to not pyramid into them. I need to work on my definition of a pullback/rally and get it clear when I should be pyramiding. Otherwise It’s just a bit of a hit and hope strategy, which in my experience never works.

 

My Premier Foods position stopped out today at 28 for a loss of £9. Yet again this was another rash trade by me trying to guess what I thought was going to happen, rather than looking at what is happening and trading accordingly. Clearly the price is in decline. If it’s a pullback then fine, but what I should’ve done is waited for the pullback to end then brought in as the price started to rise again. What I did however is try to guess that the price was going to start rising again. It’s another lesson learned the hard way, at least it only cost me £9.

 

Ok I think that is you all up to date with what’s been happening trading wise. I would like to remind everyone that received this months news letter that entries for the FTSE competition must be in before midnight Friday (17th June). After this you will not be able to enter and will not be eligible for this months prize which is “101 Ways to pick stock market winners” – By Clem Chambers. If you want to be in with a chance of winning there is still time to enter but you must subscribe first.

 

Until next time,
“May the markets be with you!”
Harry,
The Spread Betting Beginner

My order for Premier foods kicked in this morning. So I’m now long £3 per point at 31 with a stop set below the most recent support at 2. Sods law that it spends the day in decline. Still I think it could just be the pull back before setting back on the up trend and if it does I nicely placed to get a piece of the action. My Barratts position closed out today. I can see now why Guaranteed stops should be used on the IGIndex pure deal platform. The first time I use a no guaranteed stop I suffer slippage. Still the 0.18 points in slippage is less than the extra I would’ve paid in spread so looking at it from that point of view I actually saved money. Barratts was another loss of £6. I was thinking to switch to a short position according to the Vince Stanzione strategy but I decided against it. I think edswifa, in his comments, was right about my strategy with Barratts. I was indeed doomed and I paid the price. Still it’s another one to chalk up to experience.

 

Not much else has been happening here. I keep looking for new trades when I find the time and nothing is jumping off the page at me yet. Still there’s no rush.

 

Finally I’d like to say thanks to Toni for his(I’ve assumed you are male, please forgive me if you are not) nice e-mails. Toni is toying with the idea of purchasing Vince Stanziones course material. Toni, one thing I forgot to mention is speak to BigAl in the spread betting forum. He has also purchased Vinces material and he will also be able to add his opinion on how he found it.

 

Until next time,
“May the markets be with you!”
Harry,
The Spread Betting Beginner