Article Basics of Trading: Part 3

[T2W Bot]

In the first and second parts of this series I looked at some of the various elements you will need to master if you are to have a chance of succeeding at trading. In this final article, I will run through a strategy I have used in the past to illustrate some of the concepts previously discussed.
Basic Strategy
The UK stock markets tend to be range-bound, especially on a short-term basis. This strategy looks to buy low and sell high, so it is swing based. It uses the basics of support, resistance and trendlines combined with money management as I?ve discussed earlier.
The Rules:

Look for a test of support or resistance or a trendline that fails to break.
If it tests support and bounces up, then go long and place the stop just under the support level.
If price tests resistance and bounces down, then go short and place...

Continue reading...

 

[ale]

An excellent finish to an informative set of articles, FTSE Beater.
I hope these remain available for many moons.
The examples have clarified so much for me. I was thinking of signing up for one of the various courses around but I'll spend some more time in T2W before taking that idea further. And the Finspreads suggestion is great (thanks Jimmy1jag)

 

[jimmy1jag]

Indeed a good finish to this series of (necessarily) short articles. I have taken this strategy for my starting point and have since developed it further to include some indicator analysis as well... in my view a must! Not everyone uses indicators, but I prefer to and find it helps ME.

Anyway, FTSE Beater, many thanks for your work putting this together.

Jimmy

 

[FTSE Beater]

Hi all

Yes that's it the final part.....for now
Who knows what the future holds

--------------------------------------------------------------------------------------------------------

Hi Ale

I'm glad you enjoyed it and I believe it will be on the knowledge lab for a long time yet.

--------------------------------------------------------------------------------------------------------

Hi Jimmy

Brilliant - By all means, take the strategy, play around with it until it suits YOU!!! and at the end of the day - what ever strategy you use MUST be one that your comfortable with.

 

[tcksee]

Very well explained charts etc

 

[trendie]

Excellent series, Mark.

I relate completely to the need to set stop-losses, and take small losses.

Well-illustrated with good examples.

 

[Splitlink]

Excellent series, Mark.

I relate completely to the need to set stop-losses, and take small losses.

Well-illustrated with good examples.

I came across what happened to RB. yesterday and thought it might serve as an example to
the posts warning on the placing of stops. Its difficult to know where to put them, but put them you must!

RB. had results yesterday. I have not looked at them but it caused a spike.

Split

 

[salicsale]

Hi to all
Very useful and practical, thanks Mark.
I have only one question why your target is on 1570 (part 3, page 3, long from 1547).
I don’t see any resistant there.
Thanks once again.

 

[Herty]

Very nicely explained. Please continue with further refinements.

 

[FTSE Beater]

Hi all

Thanks once again for your kind comments.

---------------------------------------------------------------------------------------------------------

Hi salicsale

Hi to all
Very useful and practical, thanks Mark.
I have only one question why your target is on 1570 (part 3, page 3, long from 1547).
I don’t see any resistant there.
Thanks once again.

Are you referring to this?

If so then the most recent high is at 1572 on the 20th of Nov.
As shown here

Does this answer your question?

 

[mrjonestrader]

Thanks for the food for thought Mark.

 

[salicsale]

Hi FTSE Beater,
Yes it refers to that and thanks for answer.

 

[cherusker]

Thank you for this introduction. This, then, is a strategy for an EOD trader? Does that mean before or after the markets close, or does it not matter?

 

[serveThePublicTrust]

Very good articles. Is it possible to use this strategy on the forex market as well? If so, what modifications would you use?