How do you select your trades and other advice please

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Gordon8

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Hiya

I am very new to spreadbetting and although I have read a few books I realise that there are huge gaps in my knowledge.

As there is no substitute for experience, I recently placed a few small bets and more or less immediately got stopped out and lost a small amount of money (what a suprise!). Anyway, apart from moving my stops further apart, I have decided to go back to scratch as my long term aim is to be an informed, medium term trader rather than a fingers crossed gambler - hopefully!

I am concentrating on FTSE 100 companies and indices for now and use Sharescope end of day. This has a marvelous data mining facility but if you don't know what you are looking for in the first place it is not helpful - Please give me a few hinters about what I should be looking for in a company to benefit from bets which would run for a few days/weeks ?

Also - I am confused about Trends - If 20 and 40 day moving averages are pointing up but 120 day moving averages are moving down, is the trend up or down?

Thanks for any help you can give me :eek:
 
Thanks for your prompt help - I reckon that I will learn alot more form this web site than I will learn from books.

Re trends - If I am looking to bet medium term, does this mean that I should be looking at medium term trends, with the long term trend in the background to give a general 'feeling' for the share?
 
trading for the minimum amount u can and working out what went wrong is the best experience u can get - think intra-day - trading longer term is just a way of getting your profits or losses later - dont get caught up in looking too deeply into technical analysis but always " trade with the trend" - once u understand what that means - u will be a trader

the longer the time scale of the moving average - the greater its trend dominance - but again understanding the simple interplay of trends is key to making money

and dont listen to anyone, including me! only the few make real money and each do it their own way,so u need to find your way!

p.s. if it was simple - or just a matter of copying what other people do - there would be no one working in brokers or spreadbetting companies
 
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Thanks for the advice - Sounds very sensible to me. The problem is being a woman, I feel the need to know everything before I more than dip my toe in the water :LOL: !!

Also - I read that intra day trading is only for experienced traders as you don't have so much time for things to go in your favour or so much time to think! - Maybe I am thinking too much. I do see your point though that providing stakes are kept miniscule, it is a faster way of seeing what you are doing wrong - Any other advice will be gratefully received :cheesy:
 
Gordon8

catch22 there - but perhaps only experinced traders are ones who keep trading and thats because they trade intraday - if u trade for a living - u need to make money each day and that means a cash profit each day - and that is intraday trading

its ok for mutual funds and pension funds to trade longer term - because they make a cut of what u invest with them - and that cut is what pays them nice fat salaries - seeing as they have thrown away most peoples hard earned money on "safe long term strategies" - u can see why they might prefer to just take a cut of what u invest with them!!!

however those are the guys who move markets with all the cash they "play" with - so u "just" need to ride their selling and buying waves to make money for yourself - they dont know when to buy or to sell - so as long as u ride their waves - but know when to get on and off - u make off their losses
 
Stevet

I like the sound of that! - It is the most sensible thing I have heard so far - The trend is what the big guys are doing (maybe!)

I will try this theory out tomorrow - Thanks x
 
Can i assume that if you are intra-day trading that a software package such as Sharescope end of day (which I have), will not be adequate?
 
Gordon8,

In order to intraday trade I believe you definitely need real time data, starting of course with those ubiquitous charts. End of day data are of course useful and help show the longer term price points that can be important and may sometimes affect your intraday entries and exits (by price points I mean trendlines, support, resistance, Fibonacci levels etc.)
It also seems to be generally accepted that the spreadbet is not a particularly wise platform from which to indulge in day trading because the spread is too large to accomodate multiple intraday trades and hence will eat into your profits excessively. If you are placing several trades a day on the same instrument a broker such as Interactive Brokers would be more suitable. There are several threads on the site discussing these two approaches and their differences - the Search facility should reveal them.

However if you are learning, spread betting is certainly easier, requires less capital and allows you to play round with tiny stakes until you've built up some confidence. It is, in my opinion, ideally suited to trades open for one day or more. And of course it comes with those lovely tax bonuses.

IMHO whether you eventually choose to trade very short, short , medium or long term depends mainly on your personality, attitude, situation and character. Some seek the security of a daily, predictable income and the similarity of hours and intensity that come with a "regular job", whilst they want to avoid the sleepless nights, feelings of abstraction and lack of definite purpose and unpredictability that can occur when holding positions past the close of one day.

Others are happy trading once every week/ two weeks/ months / years even (perhaps they hold down a part time job at the same time as trading) and although the income is irregular once you have established a consistent pattern the irregular chunks of income can be divided evenly over the months.

Personally I would try to master longer term trading before diving in intraday but many would disagree. Among the joys of longer term positions (I am of course biased, being a swing [1 day to 21 days...ish] trader) are that you can spend more time finding the perfect setups, avoid acting on impulse in the heat of the moment (which I am unfortunately apt to do when I try intraday trading, but then again my discipline is poor and I am an awful daytrader) , leave time to pursue other interests, catch longer, more lucrative, less "fussy" trends and not be prey to overtrading and the resulting wallet-damaging commissions/spreads.

Again, personality tends to be the key and if you try a variety of approaches you will likely find one which suits. The good people on this site range from those who cherish every tick, indeed practically every twitch on a market maker's face that might show his intention to those who probably bought a lot of gold sometime in 2000 [when Gordon (Brown, not you!) was selling it at the bottom] and might get rid of it in January if they can be bothered. Both strategies are right because they work for the individuals concerned.

If you spend a few hours perusing the wealth of wise words on this site and are able put the ideas into practice with sufficent discipline and personal honesty you will be well on your way.

"Trading is essentially easy, but being human and cursed by emotion we do our best to make it hard." Discuss :)

Good luck on your trading journey :D
 
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gordon8

u been given some sound advice already, trading isn't essentially that hard we just make it so.......as Stevet says, trade with the trend in your chosen timescale, use MA as a filter

also, sound obvious, but try to find the lowest risk entries.......one of the hardest things (i find) if u choose to day trade, is to stay patient & stick to your plan.

also Re: your stops, personally I always stick to a 3:1 for stop & exit, for me this is comfortable & I now the odds r in my favour, the size of stop & exit will depend on the instrument u r trading as they all have different ranges & personalities ....u have to work out what u r comfortable with ..........then stick with it........But u have to accept u will get stopped out sometimes & take losses.

U have to get yourself into a 'winning loop' ,by this I mean following the plan( when it is right!) & not faultering on a loosing run.........& this is the hard part, especially when doing it for a living.

lot's of luck

jay
 
Gordon 8,
You are quite right in thinking that you'll get loads of good advice here. There are some very experienced and very successful traders here who will pass on their knowledge F.O.C. It's quite fantastic! That said, there are some good books around; one which might be of interest to you is 'Swing Trading' by Marc Rivalland. Very much up to the minute thinking on medium term trends with loads of excellent charts of UK stocks and FTSE 100. A few months back Finspreads were offering a free copy to new customers. Go to the book store under the learning section on this site for more info' on the book. HTH.
Tim.
 
I trade Dax and E-mins: daytrading. My targets are >40 points Dax and 8-10 points ES each day: sometimes I do better or worse. (all with Interactive Brokers and futures).

Simple rules:
1. Trade with the trend: usually the 20 ema on a 2 minute chart. I use a 38ema on a 1 minute chart (=20 on 2) compared to the same shifted 3 places left so I can see at a glance the trend.

If you get your entry timing wrong, trading with the trend will save you. Trading against the trend requires 100% timing..to break even let alone make money. Can't tell what the trend is? Don't trade.

2. Set up a simple working strategy that occurs say usually once or twice a day: eg 5 ema crosses up over 9 and both already over 20.. Learn to use it only and make money from it.

3. Once you have done that, refine it and add others..

4. Listen to all trading advice. Ignore all traders who suggest they know what a market will do..

5. Don't understand what is happening? Don't trade..

6. Doing nothing is a conscious decision. In some markets it is the correct srategy.

It is ESSENTIAL you have a strategy you can apply and that works and you are confident of. He who hesitates often sees the trade run away..A delayed entry is worse than none.

Make friends with some traders who do know what they are doing and will offer help or advice..
 
You people are brilliant! - Thank you so much for this advice.

As I run a small business from home, and sometimes (if I am lucky!) I hardly have time to breath let alone check what my stocks are doing, I think that swing trading over a period of a couple of days +, with very small bets would be a good place to start.

It is clear that it is time to put theory into practice, make lots of small mistakes and learn from them. This is the very scary bit!!

My biggest difficulty is choosing which stock to choose - Everyone's dilema! However I get the impression that perhaps the stocks I choose are perhaps less important than when I enter a trade, choosing stops and when to get out.

Would you say that this is correct?
 
wont comment on stocks as I trade indices, but yes u r right with the last bit.
I like to think of my trading like a 'coin flipping' game i.e.. I know I have stacked the odds in my favour, but at best all I can expect is 50/50....so if every time I throw a 'head' you give me '£ 30' & every time i throw a 'tail' I give u a tenner........I know I cannot fail

this is seriously over-simplifying things, but I believe it is a 'very' important part.

as for choosing your instrument....choose what is comfortable, but it needs enough volatility to be worth trading, without making u nervous

Jay
 
you have to trade high volume indexes and you have to use realtime data and you have to trade with the trend and you have to trade intraday and always be in cash at night
 
Gordon8,

>Thanks for the advice - Sounds very sensible to me. The problem is being a woman, I feel
the need to know everything before I more than dip my toe in the water !!<

So is Helen, and thats exactly why I enjoy her recommendations.

Regards

Hittfeld
 
Gordon8

I swing trade over 1 to 10 days.

Mostly I draw from ftse 100 shares and particularly the top 14.

If you keep monitoring those 14 you will build up a good feel for
them and it's not too onerous. Test out whatever TA appeals
to you for your entry points and then experiment with small
stakes until you build up confidence. Then, as everyone has said,
it's all about money management.


good trading

jon
 
gordon8
Also - I read that intra day trading is only for experienced traders
Click to expand...

I personally went straight into day trading... but in my case i had been reading the subject with great interest for many years previously, and this was what suited ME. You already have an idea of the way you want to trade ie medium term trends and that is a style to build around.
There are numerous ways to get into trading and if you go down the spread bet route then your style will be fine to trade this way.
However i would like to add that if you decide that you want to day trade then i would suggest skipping the SB companies and getting £3k/5k together and go with a broker as what you will loose in the spread and missed opportunities will not benefit you compared to having a tax free bet.

FTSE Beater has an excellent thread all the information on how to trade is in there and believe me you dont need a lot of fancy math indicators, the basic TA stuff is all most of the experienced traders use so dont be fooled into thinking that we are doing something different because we are not

Wishing you successful trading :cheesy:
 
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