Basic Strategy

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Mar 31, 2006

I realise this is an old thread, but the points raised are similar to a trading strategy I have been trying and incidentally failing with :( Incidentally I have been using many of the stocks listed here including AAL, RIO, and XTA. The problem I am having is that I am setting up stops a few point above/below previous resistance and support levels. In terms of profit of course as soon as the level is hit then that is the profit I am given. However, during times when the price has broken through previous S/R levels I am sometimes not getting closed out by IG index until several points beyond my stop (30 pts in one case) meaning it is near impossible to work out a risk reward ratio in advance, and subsequently meaning losses when they occur have exceeded gains.

In addition, does your method (inc. risk/reward calculation) account for the spread? For example these stocks have a spread of 9 pts.

Any help greatly appreciated from an increasingly despondant trader!

Oct 19, 2007
Thanks for the explanation, but I would also like to raise the issue of:

1. the buy & sell spread.
2. spread betting firms not executing trade & stop orders very efficiently.

are there ways of egtting around these?
Sep 28, 2009
Hi FTSE beater, was wondering if you were still around???