A cup with a handle? What on earth! Well it’s a charting pattern that supposedly indicates a continuation in the price of a stock (or any other instrument). So what the devil is it and how can we spot it? Well I wish there was a way of automatically spotting charting patterns such as the ‘Cup With Handle’ unfortunately I don’t think there is, currently. I know charting packages are improving and becoming more sophisticated on a daily basis so I’m sure before too long someone will write something that lets us scan them automatically but, until then we must find them manually. I don’t recommend looking through hundreds of charts to find these patterns so if I were you I wouldn’t even bother. It is worth knowing about them however, just in case one comes along out of the blue.
Take a look at the chart below. Recognise it?
Click image to see larger version. Image © SpreadCo
That’s right this is the current chart of premier foods. Over the last 18 months it has formed this very nice ‘Cup With Handle’ charting pattern which in theory means that the price should continue to rise. Notice I said ‘in theory’ and ‘should’. There is no such thing as a ‘sure thing’ in spread betting or any form of trading and there is no reason the price of premier foods could not continue to fall and never recover. Personally I like the look of the chart and so I have placed an buy order at 31 with a stop set below the recent dip in price at 28. I set it to Buy at £3 per point risking a total of £9 on the trade.
Not much else has been happening on my own spread betting front. I keep taking a look for new trades but so far nothing is coming and slapping me in the face so I’m playing the waiting game. Still spread bets can be like busses, you wait all day for one then two come along at once.
One last thing. A message to all the news letter subscribers. Hopefully you all received the news letter the other week. If you did not please check your spam folders. Not that what I sent you is spam but some filters may have thought it was such. If you did receive it great. Don’t forget the FTSE100 competition. So far only one person has entered. I understand most people will probably want to wait until nearer the closing date as you have a better chance of predicting the price. Entries close on 17th June at midnight so please be sure to enter by then otherwise you miss out on your chance to win. If you’re new to this blog and would like to enter the FTSE100 competition you need to subscribe first.
Until next time,
“May the markets be with you!”
Harry,
The Spread Betting Beginner
Today my Barclays position closed out at 264 for a very nice £50 profit. I had three short positions open each making varying degrees of profit. “But I thought you like to let your profits run?” I hear you cry. This is very true and ordinarily I wouldn’t exit a trade using a limit order but with this being a short trade, and there being strong support at 260 I decided to get out while the going is good. I think running your profits on long positions is fine. Let the stops take care of the exits as a long position can rise and rise and rise. Shorts are different. The lowest level a short position can reach is 0 if the company goes bust. Now I don’t think for one minute that Barclays are going bust. I merely identified a downward trend, got a piece of the action and got out. Strictly speaking I wasn’t true to my strategy with this trade. I exited before I received an exit signal from the chart. Now this could prove to be costly as the price could continue to fall, however I don’t really care. I made a judgement call based on other evidence I deemed it appropriate to exit the trade prior to the exit criteria of the strategy. It’s not something I plan to make a habit of but if there is evidence to suggest I should be exiting the trade then that’s what I need to do.
My position in premier foods also stopped out today making just under a £10 profit. With hindsight the stop level on this trade was probably too close. This was a super trend cross buy I made back in December so the trade was open for around 6 months. Wow I can’t believe it’s been that long. Anyway I attempted a pyramid which didn’t work and now I’m out of the trade. I have to say as it stands I still like the look of the chart. It’s formed a very nice round bottom (Ooh Err) or saucer, call it what you will. This price pattern is usually formed at the a market bottom potentially signalling a rise. The only question I have here is the rise over, or is this just the beginning?
Click image to see larger version. Image © SpreadCo
For regular readers or new readers you may see some changes going on over the next few weeks. The website is going to be going through a bit of a re-design so if you notice changes do not be alarmed. I’m hoping to roll out the changes all in one go and everything will work fine, but I’m realistic and I know that something may end up not quite right. Therefore if you spot something that doesn’t work or doesn’t look right please do let me know as otherwise it may go un-noticed for some time.
All that said have a great weekend everyone and I’ll see you back here soon.
Until next time,
“May the markets be with you!”
Harry,
The Spread Betting Beginner
I sent out my first spread betting news letter yesterday so if you have subscribed you should’ve received it. If you haven’t please check your junk mail as it may have been caught by your spam filter. If you do all that and still haven’t received it please do let me know and I will get it sorted out A.S.A.P. So what does the spread betting news letter contain? Well that would be telling now wouldn’t it. If you want to find out the answer you will need to subscribe. The one thing it does contain is your chance to win a prize each and every month. So if you fancy having a go just subscribe, It’s completely free.
So what has been happening in my spread betting world recently? Well the simple answer is not that much really. Sure I’ve been maintaining my open positions by moving stops but I haven’t had the time for a while to look for any new trades. I’m not concerned though. I have about 8 positions open anyway and I think if I go opening any more I’ll lose track of them which means they will more than likely end up being losses. It’s important that you do not overstretch yourself by having too many positions open at once for a few reasons. Firstly you won’t be able to monitor them all and will more than likely end up making a mistake and secondly there is the fact you will possibly be overexposed. If you have one open position at £1 per point on a stock worth 500p this means you have a total exposure of £500. If however you have ten positions all at £1 per point on stocks worth 500p this gives you a total exposure of £5,000. This is all fine if you can really afford to lose £5,000 but if you can’t then don’t open so many positions.
This is why I limit my number of open positions at any one time. Although all my positions have stop orders associated with them most of them are not guaranteed which means I can potentially lose more than I bargained for. If you do find yourself opening too many positions you will probably find it’s because you are afraid of missing the boat. Believe me when I say this there is no such thing as a missed opportunity in the trading world. You may think you’ve missed it and you will never get such a good chance to trade but honestly you will. Todays missed trade can lead to tomorrows big opportunity so sit back relax and wait for the right trade to come along. That’s what I’m doing, or at least that’s the theory.
Until next time,
“May the markets be with you!”
Harry,
The Spread Betting Beginner
My National express spread bet closed out today for a £13 loss. With hindsight this was a poor trade that I should never have taken. From now on I need to stick to my guns and only trade the strategies that I’m comfortable with and I have confidence in. No more messing about. It’s time to get serious and try and make some money from this Spread Betting malarkey. After over two years of trying I would’ve thought I would be a lot further along than I am. Still onwards and upwards, or at least that’s the plan.
I decided to re-instate my Barclays order at 264 and leave it alone this time. My problem with this position is I have become too emotional about it. My Fear and Greed have been taking over and as soon as that starts to happen with a trade you know it’s going to go wrong in some shape or form. So what is fear and greed and how has it affected me here?
Well my greed emotion kicked in the other day when my order to buy out of my position was not filled. I thought the price could fall further when the markets opened and I didn’t want to miss out on more money (greedy). I was fortunate that when the price started to rise I managed to contain my fear and not sell out of the trade. As I write this the price is starting to fall (see chart below). With the down trend still in place on the intra day chart I am happy to let this position continue a little longer.
Click image to see larger version. Image © SpreadCo
My only hope is the recent bounce around 264 is not the bounce off support that I think may happen around the 260 mark. Only time will answer that question. For the time being I’m trying not to let me fear get the better of me and also trying not to be to greedy with a limit order set at 264.
Finally (I know I keep harping on about this but hey if I don’t no one else will) don’t forget to subscribe to my monthly news letter for your chance to win a super cool prize. Ok well it may not be super cool to begin with but it is a price never the less. The prizes should get better over time as I get more subscribers and more visitors to the website. So if you haven’t done so already tell your friends, tell your family. One easy way to spread the news is click the Facebook “Like” button below or at the top left of the page, or for all other webmasters out there please consider linking to spread betting beginner.
To be in with a chance of winning you have to subscribe so make sure you do. I aim to send out the news letter sometime over the weekend so keep an eye on your inbox.
Until next time,
“May the markets be with you!”
Harry,
The Spread Betting Beginner
Well it’s been a while since my last Spread Betting Update so apologies for that. Life took an unexpected turn and became a bit hectic for a while. I won’t bore you with all the details but things should start to return to normal again from now on, that is of course if anyone still reads this.
I have also noticed that Big Al has not updated since last Wednesday. Big Al if you’re reading this I hope all is well with you and your Spread Betting.
So what’s been happening since I spoke with you last? Well there have been a couple of new spread bets. Both of them are pyramids into existing positions. I haven’t looked for new trading opportunities for a while and neither do I intend to while I have so many trades open. The new pyramids are in Barclays and Premier foods. Both of these positions are showing varying levels of profit and had pull backs of their trends so I deemed it a good time to pyramid in.
With my Barclays position being a short I have been toying with the idea of closing the trade. Looking at the chart there seems to be a good chance of support occurring around the 260 level. Yesterday I set a limit order for 264 to take profit. This never got filled during the day and I cancelled the order at the end of the day thinking the price might spike down at the open and I would be filled at 264 missing out on further action. With the price rising up to 272 today I probably should’ve left the limit of 264 open. The price dipped at the open and 264 may have been filled. Still we live and learn.
Click image to see larger version. Image © SpreadCo
Ordinarily I wouldn’t really think about exiting a trade in this way. I prefer to keep moving stops and exit the trade when they get hit. This method of trailing stops is fine for a long position as a price and rise and rise and rise. My Barclays trade however is a short and while it’s not impossible for Barclays to go bust and fall to zero I don’t thin k it’s very likely at this point in time. Therefore I’m looking for a good place to exit the trade. I suspect todays bounce is a bounce of the 260ish support line. The question is will prices fall again or continue to rise? I think I’ll set my limit order back to 264 and be happy if it gets hit.
Ok so I think you are about up to speed now. I’ll be sending out my first monthly news letter very shortly so if you want to receive it please subscribe now. This month gives you the chance to win a prize via my new competition. If you want to know more or be in with a chance of winning the prize you need to subscribe to find out more.
Until next time,
“May the markets be with you!”
Harry,
The Spread Betting Beginner
