Uk shares for a living

[jonboy123]

thanks..williadb:

strongest price action, means what exactly?
Im not sure what you mean by price action.
The amount of fluctuation in price? the volatility in price?
the price channel/envelope/range of movement?

how do you tell if one stock has a stronger price action compared to another? - Simple work out %change in price between 2 dates for each stock then compare them. The stock that increased most/decreased least is the strongest stock.
You have to work this out manually yourself? but a stock could go up and down 100points in a day, but close only 2 points higher than its open.
so whats the price action there?

"Example: Stock X has a relative strength of 45%. Therefore, it has outperformed 45% of the stocks in the market for a specific time period."..........correct?

the chart you posted, that just shows the share price, right? it doesnt show the relative strength does it?
on june 11th short forest oil (but this is in hindsight) ohhh....the black one (forest oil) decresed more than the other one (the x you have marked in that time frame)

on 10-15 july i dont know which you should buy. I would need to find support and resistance levels.
I would buy oge energy, maybe...as price action is stronger.....but i cant see the relative strength figures...

 

[williadb]

thanks..williadb:

strongest price action, means what exactly?
Im not sure what you mean by price action.
The amount of fluctuation in price? the volatility in price?
the price channel/envelope/range of movement?

how do you tell if one stock has a stronger price action compared to another? - Simple work out %change in price between 2 dates for each stock then compare them. The stock that increased most/decreased least is the strongest stock.
You have to work this out manually yourself? but a stock could go up and down 100points in a day, but close only 2 points higher than its open.
so whats the price action there?

"Example: Stock X has a relative strength of 45%. Therefore, it has outperformed 45% of the stocks in the market for a specific time period."..........correct?

the chart you posted, that just shows the share price, right? it doesnt show the relative strength does it?
on june 11th short forest oil (but this is in hindsight) ohhh....the black one (forest oil) decresed more than the other one (the x you have marked in that time frame)

on 10-15 july i dont know which you should buy. I would need to find support and resistance levels.
I would buy oge energy, maybe...as price action is stronger.....but i cant see the relative strength figures...

Hey Jonboy

By stronget price action i am referring to gain/loss in % terms.

I am talking in terms of daily bars and not intraday trading. Sothe difference in price between yesterday close and today close for example. I find that intraday movements are irrelevant for my style of trading which usuall consists of taking positions from 1 - 4 weeks.

Nope, relative strength. Say you have 50 stocks and you work out the % change from yesterdays close to todays close. YOu put those in a chart comparing them to see which stock increased/decreased the most. So one stocks strength relative to otherstocks. Pick a sector then do this for all the stocks in that sector, to find out whcih ones are th strongest and weakest. This is someting you can calculte in excel or your trading software might allow you to do it if you are choosing the closing price between two date points.
AS for the chart correct Oge energy as other stocks decreased during correction whereas OGe was still increasing. THerefore when overall market turns to the upside you would choose Oge to buy as it is the strongest stock which is under professional accumulation.

 

[jonboy123]

"difference in price between yesterday close and today close for example".
as a %, right? so say if yesterdays close is 40p, and todays close is 75p...How do I work out the
price action? (sorry my maths is a little rusty)....how about 45p yesteday.....and 25p today...

Cant we just work out the price action in real penny terms? rather than %?

So it seems you are putting more weight on the closing prices, and not looking at the session highs and lows, right?

The relative strength indicator im using with IG Index, compares one equity with another equity.
I dont think it compares it with the "sector" or the relevant "market" as whole.

That "example:stock x..." quote i said is direct from internet article...are you saying that is incorrect?
But i think i have seen relative strength figures on other websites, where they just compare the equity to the rest of the sector as whole...

Youre just comparing relative strength of price of companies to each other, right?

This is slightly confusing me...but its good, its interesting.

Ill try UK banking sector. I need to play with this.

So you gotta pick a time frame, say 3 weeks, to judge that price action in that period?
4 weeks for simplicty sake ok/sensible?

So youre calculating price action....which is the relative strength......so what about the relative strength indicator that we can just put on the chart? Are we using that?

Man, Excel is hard package to figure out. I need to learn that.

"AS for the chart correct Oge energy as other stocks decreased during correction whereas OGe was still increasing.".....other stocks? we can only see TWO stocks on the chart though right?

Are you using IG index/market advanced charts? How did you get two price charts onto one single chart?

man sorry i ask alot of q's.
And thankyou for sharing this info.

 

[williadb]

"difference in price between yesterday close and today close for example".
as a %, right? so say if yesterdays close is 40p, and todays close is 75p...How do I work out the
price action? (sorry my maths is a little rusty)....how about 45p yesteday.....and 25p today...

Cant we just work out the price action in real penny terms? rather than %?

So it seems you are putting more weight on the closing prices, and not looking at the session highs and lows, right?

The relative strength indicator im using with IG Index, compares one equity with another equity.
I dont think it compares it with the "sector" or the relevant "market" as whole.

That "example:stock x..." quote i said is direct from internet article...are you saying that is incorrect?
But i think i have seen relative strength figures on other websites, where they just compare the equity to the rest of the sector as whole...

Youre just comparing relative strength of price of companies to each other, right?

This is slightly confusing me...but its good, its interesting.

Ill try UK banking sector. I need to play with this.

So you gotta pick a time frame, say 3 weeks, to judge that price action in that period?
4 weeks for simplicty sake ok/sensible?

So youre calculating price action....which is the relative strength......so what about the relative strength indicator that we can just put on the chart? Are we using that?

Man, Excel is hard package to figure out. I need to learn that.

"AS for the chart correct Oge energy as other stocks decreased during correction whereas OGe was still increasing.".....other stocks? we can only see TWO stocks on the chart though right?

Are you using IG index/market advanced charts? How did you get two price charts onto one single chart?

man sorry i ask alot of q's.
And thankyou for sharing this info.

Jon boy the RSI indicator is the measures the closing stock price relative to itself, Welles Wilder, i forget the actual calc, but if you search around on the internetyou will find out how its calculated, nearly all charting software calculates RSI. SO nope this is not what i am talking about.

If you work out the price action in penny terms that doesnt actually acheive anything, some stocks move in pennies other in pounds, thats why you need to work out what the % change is. so for example ((close today - close yesterday)/close today)*100

So for example closing price today is $33. Yesterday it was $30. So absolute change is $3. Divide $3 by todays closing price = 0.9. 0.9 * 100 = 9% increase from yesterdays price.

So for example if you are looking at banking stocks, i would work out the price moves from 27 Mar - 8 Apr for all banking stocks. For example Barclays between these two dates, prices went sideways from 173.80 to about 157.80. So i would calculate 157.80-173.80 = -16. (-16/157.80)=-0.10. 0.10*100 = 10% loss between these dates. Id then calculate the same for all the uk banking stocks to see which were the strongest weakest. Now you are probbaly thinking, well how does he know when he expects the market to move in a particular direction. Well that is info i will not readily share and has required a lot of work. But you can see my point, ill try and post another example.

Read Larry Williams, although most of what he says and does in my opinion is just to fuel the mans narccissism as all he does now is sell indicators that dont actually work, anyway i digress. Read his book Short Term Trading Secrets it should discuss the same accumulation/distribution thing in there. Learn to use excel, like i said a lt of hard work is initally needed but its a learning curve......trading is a journey. Try percentr on a 4 day time frame with an RSI of 21 days. Buy signal when percentr < 20 and rsi <50 sell when percentr > 75 and rsi > 50.

 

[ZHD]

day trade strategy

I day trade on the FTSE. Usually keep it to the miniers like RIO, BLT and LMI as they have huge daily movements. I'm averaging quite a nice daily wage on them.

Some days I have to sit at the PC all day long and other days I'm done and dusted by 9:30am, feeling as if I have stolen candy from a baby.

Hi there,
Hope you are well. I was just wonder how you day trading is coming along. Could you please share you day trade strategy.
thank
Z

 

[GCC]

Any one only trades Uk shares for a living ? is it doable ?

I live in Hong Kong, and I know people trading Hong Kong stocks for a living. Since Hong Kong is so much smaller than UK, I suppose you can trade UK stocks for a living too. The question always remains the same: do you understand the market(s) you are trading?

 

[Naz]

I trade UK stocks for a living but I swing trade them, over days and sometimes weeks. Of course this year it's been very good. Infact the best for years.

I day trade US stocks with direct access because as a day trader I have very big advantage. (these accounts can be opened if you know where to look for $10,000 now.)

I notice the same kind of tricks being played on the UK market intra day that I'm used to playing in the US but I feel I have an edge in the US where as in the UK I don't.

So I use intra day set ups on UK stocks for early entries into swing trades. I use Sharescope pro for all my intra day and end of day charts.

What I would like to know is if anyone has a really good UK news service in real time. Like briefing or tradethenews in the US.

 

[foredog]

I trade UK stocks for a living but I swing trade them, over days and sometimes weeks. Of course this year it's been very good. Infact the best for years.

I day trade US stocks with direct access because as a day trader I have very big advantage. (these accounts can be opened if you know where to look for $10,000 now.)

I notice the same kind of tricks being played on the UK market intra day that I'm used to playing in the US but I feel I have an edge in the US where as in the UK I don't.

So I use intra day set ups on UK stocks for early entries into swing trades. I use Sharescope pro for all my intra day and end of day charts.

What I would like to know is if anyone has a really good UK news service in real time. Like briefing or tradethenews in the US.

Hi Naz

I found about 6 months ago that day trading/scalping UK stocks was getting very difficult, HSBC used to be in 50000, then it got to the stage where there would only be 3000 on the bid then nothing for maybe 3/4p, made it difficult to get in and very difficult to get out if wrong!

Regarding news, i used to have a proquote suscription (they are owned by LSE) and that gave me level2 and that had all the news feeds, RNS, dow jones etc. was about £125 per month. I think if you contact them you can get a months trial or something.

Would you be so kind as to point me in the direction of the trading accounts for $10k.

Thanks

 

[Naz]

Thanks for that Foredog.

Info on the US day trading accounts fror $10k can be found at
learn-day-trading.com/about-us.asp

 

[Strangelydifferent]

Dear all
An interesting thread, even with its left turns here and there. I'd like to get back to the original topic.

As I see it, specifically as a UK resident, there are the following factors governing which market to follow with a view to trading:

1. - UK LSE involves 0.5% stamp duty on every purchase, suggesting swing trading is a better approach than day trading, even with the gapping problems
2. - using a UK based broker allows the use of ISAs for some stocks which are free of capital gains tax
3. - US markets "seem" to require a $25K deposit, apparently even for swing trading. This is a problem because whilst the US market may be more liquid (smaller spreads, right?) than the UK market it means that one is subjected to exchange rate fluctuations on that capital regardless of trade size and frequency, and remember, my stand point is as a UK resident. I'm looking at eventually making use of the proceeds in sterling.
4. - Spread betting, to me, is out of the question simply because of the risk that one finds one is really only betting against the house, which happens to be the bookie.

All this leaves me curious to a) hear criticism of the above points b) what other considerations govern the attractiveness of European stocks (i.e. other than no stamp duty, still within ISA rules, no compulsory fx exposure to trading capital) ?

Many thanks in advance

 

[Jock Strap]

Dear all
An interesting thread, even with its left turns here and there. I'd like to get back to the original topic.

As I see it, specifically as a UK resident, there are the following factors governing which market to follow with a view to trading:

1. - UK LSE involves 0.5% stamp duty on every purchase, suggesting swing trading is a better approach than day trading, even with the gapping problems
2. - using a UK based broker allows the use of ISAs for some stocks which are free of capital gains tax
3. - US markets "seem" to require a $25K deposit, apparently even for swing trading. This is a problem because whilst the US market may be more liquid (smaller spreads, right?) than the UK market it means that one is subjected to exchange rate fluctuations on that capital regardless of trade size and frequency, and remember, my stand point is as a UK resident. I'm looking at eventually making use of the proceeds in sterling.
4. - Spread betting, to me, is out of the question simply because of the risk that one finds one is really only betting against the house, which happens to be the bookie.

All this leaves me curious to a) hear criticism of the above points b) what other considerations govern the attractiveness of European stocks (i.e. other than no stamp duty, still within ISA rules, no compulsory fx exposure to trading capital) ?

Many thanks in advance

Hi Strangelydifferent,

I mainly swing trade UK stocks via my ISA. Looking at the above points, I would say:

1) Yes, the peril of Stamp Duty does mean it is easier to swing trade although it is possible to day trade the more volatile stocks or other stocks on more volatile days. I have often bought and taken profits intraday where a move has gone in my favour more quickly than anticipated. I've never worried about gaps, since they just as easily can go in your favour and I close out a position before if there is an excessive risk of a big drop for any reason.

2) As I say above, I trade using an ISA and this avoids any CGT (I've made and withdrawn over £20,000 in profit since April, so thank goodness for that!)

3) IMHO, the US minimum is a bit of a red herring. In the UK, unless you have a trading fund of about £15-20,000, then it won't be easy to eradicate the spread, stamp duty and commission while still making reasonable profits without the greater risk of having too many eggs in one basket. I started with and have maintained a fund of about £30K, allowing me to trade 5 or 6 times at any one time in batches of £5,000 or £6,000, meaning my fixed rate commission is not an additional issue, leaving me with just the spread and Stamp Duty to worry about. With a small fund, I recommend spreadbetting, see the comments below.

4) I disagree with your concerns here. I spread bet a small account for shorting and other bits and pieces. Having taken my original stake back out in withdrawals, my account is now pure profit, so clearly I have never really had a problem feeling I am betting against the house. A decent broker will hedge out their risk and make money from the spread and will make more money long term from a winning client than a loser.

For me, I like trading UK stocks as this is my day job so the market hours suit me, and the fact that I don't pay CGT means that even with Stamp Duty on regular buy trades, I estimate that I pay no more than about 10% pa tax. Also, I understand the UK market and am familiar with the stocks I trade in. Plus, there is no exchange risk as you say.

cheers & GL
Jim

 

[Strangelydifferent]

Jim
Hi, many thanks for your time in answering.
Ok, I think your first message is that stamp duty shouldn't make UK stocks a hopeless case and this is a good piece of encouragement though the flip side probably means I need better set-ups!

I had been looking at stamp duty as invariant with scale - its always 0.5% regardless of trade size (right?) and hence my interest in other markets. that said, just seeing this loose picture of what works for you is interesting. I had been planning on migrating in this direction (i.e. several trades of that size in semi-parallel) when I feel rather more confident.

May I ask you a couple of questions though:
1. which broker do you use? I've been using selftrade recently.
2. how much time do you commit to this per week?
I appreciate this is a little invasive but it would be a real sanity check to hear from you on the second point.

I appreciate what you are saying about the $25K being important for a fund size in general. The point I was worried about was seeing that fund head south due to exchange rates changing faster than I could hope to beat on the trading side. The same point concerns me with European stocks though there is no rule about keeping the money there regardless of trading activity.

I haven't found much chat about European stocks on this forum - its all UK/US. Is there any obvious reason for this?

Lastly, thanks for your point about spread betting. I have pause to think and concluded that a major part of my concern comes from just not understanding the process. I'll think again.

Thanks once again.

 

[Jock Strap]

Jim
Hi, many thanks for your time in answering.
Ok, I think your first message is that stamp duty shouldn't make UK stocks a hopeless case and this is a good piece of encouragement though the flip side probably means I need better set-ups!

I had been looking at stamp duty as invariant with scale - its always 0.5% regardless of trade size (right?) and hence my interest in other markets. that said, just seeing this loose picture of what works for you is interesting. I had been planning on migrating in this direction (i.e. several trades of that size in semi-parallel) when I feel rather more confident.

May I ask you a couple of questions though:
1. which broker do you use? I've been using selftrade recently.
2. how much time do you commit to this per week?
I appreciate this is a little invasive but it would be a real sanity check to hear from you on the second point.

I appreciate what you are saying about the $25K being important for a fund size in general. The point I was worried about was seeing that fund head south due to exchange rates changing faster than I could hope to beat on the trading side. The same point concerns me with European stocks though there is no rule about keeping the money there regardless of trading activity.

I haven't found much chat about European stocks on this forum - its all UK/US. Is there any obvious reason for this?

Lastly, thanks for your point about spread betting. I have pause to think and concluded that a major part of my concern comes from just not understanding the process. I'll think again.

Thanks once again.

No problem, happy to help!

You are right that Stamp duty is proportionate, so this simply widens the spread when you buy by a further 0.5% irrespective of trade size. As this is the only tax I pay, I can live with it. Yes you don't have this cost in other markets, but my focus is on the UK so I feel the additional cost is offset by better knowledge and focus.

To answer your questions,

My broker is E*Trade. They have a good platform, order filling and the commission ranges from £11.95 down to £7 depending on trade frequency. If you trade more than 5 times a month it is £9 and so this is the most I ever pay and really helps reduce the impact of the variable costs.

I would say that on average, I commit 2-3 hours a day to this. While this is effectively my job, it doesn't mean I am glued to the monitors all day - at the moment I am on the laptop watching the 1st Test from South Africa! Just don't tell the wife. This is another benefit of not day trading - I did that for a bit, spreadbetting on the stock indices and it was like an addictive computer game where I was on the computer from 7am until 9pm!! I made money but nearly got divorced.

Yes, exchange rate risk is another factor. As I have not traded overseas stocks, I am not familiar with the ins and outs, but with a UK based broker I assume you only have currency risk with European stocks when you are in the trade. That said, I sometimes hold positions for weeks, so the risk is still evident.

I guess the main reason for the UK/US bias over Europe is simply that the bulk of the posters can speak English (note "the bulk" lol), meaning most are going to come from the English speaking world rather than Germany, France etc. I assume that like me, many people focus on what they are familiar with. There are Europeans on here, but I guess they don't have the critical mass to keep threads going. It is often hard enough with any thread!

 

[Strangelydifferent]

Hi
...an appealing lifestyle! Well done for persevering that far.
I'm guessing you were trading around a day job before that. May I also ask, how long did it take you to become professional?
I'm wondering how to spend my current time: I do have the freedom to get onto the market inthe mornings as well as well as planning and reviewing at the ends of days.

 

[Nomad0404]

Hi Naz

I found about 6 months ago that day trading/scalping UK stocks was getting very difficult, HSBC used to be in 50000, then it got to the stage where there would only be 3000 on the bid then nothing for maybe 3/4p, made it difficult to get in and very difficult to get out if wrong!

Regarding news, i used to have a proquote suscription (they are owned by LSE) and that gave me level2 and that had all the news feeds, RNS, dow jones etc. was about £125 per month. I think if you contact them you can get a months trial or something.

Would you be so kind as to point me in the direction of the trading accounts for $10k.

Thanks

ShareScope Pro is about £30 a month cheaper than that for a Private Investor and the two packages are fairly comparable.

That's what I use for my stock scanning.

At the moment I use a stock ISA with a brokerage charge of £9.95 per trade, however, I don't have to worry about CGT atm.

Phil