Spreadbetting Journal – Trend Strategy

Hecla Mining has surged higher for 3 days now and has gained an A+ grade. So although my target was 900, I’m happy to take profits here, as a 13.67% percent move in 3 days has the chance of reversing just as quickly if gold stalls at it’s long term resistance line.

Closing trade
Entry Price: 724.2
Exit Price: 823.2
Qty: 0.32 per point
Points: 99
P/L: £31.69
Trade Percentage: 13.67%

Daily Channel Captured: 66%
Trade Grade: A+

Account P/L: 0.78%

Think I bought this one too high away from the 100 bar EMA, so am exiting at breakeven and going to wait for the next decent pullback to get back in.

Closing trade
Entry Price: 1220.3
Exit Price: 1220.3
Qty: 0.5 per point
Points: 0
P/L: £0

Daily Channel Captured: 0%
Trade Grade: C-

EUR/USD has broken lower in the last hour or so, so my stop would have been hit at 1.3879. So closing paper trade is -61 pips. I’m glad I’m so strict with my risk management for my account and couldn’t trade it for real.

USD looks to be picking up strength. EUR/USD signal got within 1 pip of the chandelier stop a little while ago. So looks like the buy signal is going off tonight for EUR/USD. GBP/USD is in the value zone and AUD/USD is moving down towards it. Those two might not turn off as are further from their stops and the negative news is focused on the euro zone again, probably as it’s a quiet news week and traders like to make up a reason to move the markets when there’s no real data to focus on.

I’ve gone long in Halma Dec 10 Spread. It was on my watchlist from the weekend scans and it had an inside day yesterday, so I’m looking for the up move to reassert itself.

Trade
Entry Price: 338.60
Qty: 0.7
Spread: 2.42

Stop: 331.49
Limit: 354.14

Account Risk: 0.12%
Potential Account Profit: 0.28%
Risk Ratio: 2.32

Small risk on this one as it’s a different strategy than I usually use.

Closing trade
Entry Price: 338.60
Exit Price: 331.49
Qty: 0.7 per point
Points: -7.11
P/L: -£4.98
Percentage P/L: -2.10%

Daily Channel Captured: -15%
Trade Grade: E

My Halma trade was stopped out a little while after the US opened, but has recovered and closed slightly higher on the day. I made a few mistakes on this one which I hope I will learn from.

1. I used the 4 hour lows to calculate the stoploss position instead of the daily lows.

2. I rushed my entry because I was working and didn’t have the chance to day trade into the position. I imagine this would be ok when using a wide stoploss, but I can’t do it when using such a tight stop. I either shouldn’t have traded or waited till near the close.

3. Finally, I have a negative view on the market currently and think it’s going to pullback a little further. So I’m going to make a new rule for myself that I can only go long stocks when I’m willing to be long the S&P 500.

I’m back to thinking about risk again as I really think getting it right is the key to me being successful in my spreadbetting account. I’m currently limiting myself to a maximum risk of 1.5% drawdown a month, with a maximum position size of 0.5% per trade. I’m attempting to trade even smaller position sizes than that where possible as 0.5% per trade would mean that I’d be stopped from trading if I had 3 losers in a row for the rest of the month. So position sizes of 0.15% is my target size now.

The question I’ve been pondering today is whether I should attach a trailing stop loss to my profits. i.e. as my max drawdown is 1.5% per month, should I be protecting my profits from eroding and turning into a loss once I reach 1.5% profit in a month? I’m currently 2.54% up in November. So what I’m considering is whether I should now have a trailing stoploss on my account 1.5% below the daily or weekly high for my account at which point I would stop trading for the rest of the month?

I’d be interested to know anyone's thoughts on this who reads this post? PM me or reply in my journal thread if it’s sensible.

I’m currently waiting for the pullback on the S&P 500 to reach the 100 Bar EMA on the 4hr chart, which I like to use for as an entry point. My target entry price on the SP 500 Dec Spread is around the 1198 price level, which is the previous high before the breakout and should be supported by the 100 Bar EMA which is moving closer to that level. But if it stabilizes and moves higher from here instead, then I will use a breakout of the trend line on the 4hr RSI instead.

I will aim to keep my position size small in case it’s a reversal of the recent bull trend and add to it if it continues higher.