General

Ever since I’ve started trading I am looking for good charting package. I tried Sharescope and eSignal and didn’t like the interface. At the moment I am using IG Markets advance charting. It is quite good but there is a big problem. Have a look on this chart of Rio Tinto

See the third candle from the right (where the red line is)? on this chart the high of Rio Tinto on the 4/8 was 3503 and it is outside bar of the candle before.

I am using a lot the inside & outside bar patterns so I would create an order to buy the next day at 3505 or so.

The problem is that this price is fake. Rio didn’t even came close to this price. You can see it on the chart from MoneyAM website:

The high of that day was 3440. Huge difference! So what is going on? From time to time IG and other spread betting providers have some problems with the data they get and the prices jump for a second much higher. This doesn’t affect your positions and orders but it does affect the chart you see.  So you can’t really trust them. It is like driving 80 MPH while your meter says you are only 70. Then try to explain it to the police officer.

It is a shame because their charting package is quite good and cheap (£30 a month free if you trade 4 times) but they don’t clean the data and it is a problem.

I am still looking for good package! Anyone?

For me this was the most difficult question. Many time I opened a trade with a stop loss too tight only for the stop order to trigger and then bounce again leaving myself upset!

The idea is to setup a stop loss not too close but not too far either. So how do you set your stop?

I take this idea from ‘Come into my trading room‘ by Alexander Elder. It calls ‘The chandelier exit’ and it helps you to setup a stop loss out from the market noise.

The formula is very easy:

(Highest value of the last 22 bars-3)*ATR(22)

for shorting is the same but with the lowest value of the last 22 bars.

The idea is to move your stop loss forward as long the trade goes in your direction. But Never move it down!

The code that I use to add it to IG index chart packaging is this:

RETURN highest[22](High)-3*AverageTrueRange[22](close)

and for short:

RETURN lowest[22](Low)+3*AverageTrueRange[22](close)

this really works well for me and saved me many time from being stopped out!

After a big drop yesterday the market is calm down a bit but I fill it is the quiet before the storm. It is 30 minutes before the opening in US and you can feel that everyone is waiting to see how the market in the states react to the Dubai news.

That’s why I had a quick trade today on Rio Tinto and run a way after a quick profit. I know bought it at 3040 and sold it on 3060. I know it could easliy end the day around 3200 but on the other side it can finish around 2900. Yes I can use a stop loss but if I need to carry the trade to next week the stop loss could worth nothing if the market opens sharply lower.

It is the same with oil and EUO/USD… I am waiting to see. No mater what I won’t trade in the first half hour. If by then I will see a sharp move I may jump on the train (hopefully it would not be too late!)

I am using Sharescope more than a month now, and I get used to it. I still think the interface is not the best and in fact I would love to give them a list with small list for things they need to improve.

But all in all it gives me valuable information and it helps me decide when and what to trade.

All in all it is recommended. I’ve tried some other products and for the price and coverage I think it is the best package out there.

Lets say you lose 3 times in a row – what do you do? keep going? and if it is 5 times? 10 times?
My system is to have many small losses but one or two big profits that cover all the losses and adds value. This can be very hard on you mind. Sometime you can wait 6-7 trades before you have one good trade. Then you start to think maybe your system is wrong maybe you need to change something or to leave the system all alone.

It is good to tweak the system and learn from mistakes but don’t be tempted to leave your system just because you have a bad strike! Use stop-loss to limit you losses and keep them small. Very small. This can help! And don’t forget to move your stop loss to a profit zone once your trade goes in your direction.

Hi all,

For a while I was trying to fight the trend. This is a mistake. Although sometimes swimming against the flow can be profitable most of the time it is just difficult.

That’s why when the market direction is up, there is no point to go short. But… it is not a secret that since March bottom the market was going in one direction with very few corrections. Many people will say that a big correction is due to come and September is a bad month anyway!

They may be right and we may see a change of direction but until that happen, I would not recommend to open a short position. But you can do what I’ve done: Bought some shares that I believe their trend is up but back-up it with a put option for October. You can still find them cheap so for 40-50 points you can have a back-up if something will change.

I myself bought FTSE 4500 put for October a bit expensive at 86 points, but still I am happy with this insurance.

We live in times where information is available in seconds. For example the moment the Fed announce the rate decision you can get the info straight a way no mater where you are in the world. But does it matter?

I was reading the financial websites and got confused. One write says that the recession is over and the other one says that we haven’t seen nothing yet. And again I want to ask – Does it matter?

Lately I find it more like a noise that interrupt my trading. Lets face it: No one know a thing. If they would know something they wouldn’t write about they would trade according their knowledge. I can give you many examples for different opinion about where the market is going, and why but the most important part is that it is just opinion.

And I find that opinion is very dangerous in trading. I like to trade on automatic mode. Something like ‘the Dow crossed the 26 EMA and MACD is up – buy signal when it crossed down the 26 EMA close the position’. This is not an opinion… but if I read or listen to other people than I can start to think like ‘oh the Dow is too high now, and this Guru said that in September we will see big drop, so maybe I shouldn’t buy…’ and then the trade is over.

So I try less and less to read the paper and listen to the news. It just makes me depressed and ruin my trading style. Since than life is good! and more profitable too. I don’t need people to tell me what to think. I can do it myself.

Hi all,

I’ve just been in one of ODL Markets seminar and it was really good. First of all what I liked about it the person who run the seminar didn’t try to push ODL platform at all. He didn’t say things like ‘in our platform’ or ‘our spread is the best’ none of this marketing bull shit. In fact I will try now to use more their platform only because of that. And I feel they gave me something that other didn’t so why not using them?

Anyway Sandy Jadeja is an experienced trader and no-nonsense person. I really like that. He offers some useful tools to use but more importantly he tried to work on the attendance’s attitude. Think for yourself is the motto and I like it very much. He emphasis that all the stuff that we read / hear on the media is crap and if you follow it you are doomed. Again I find it true.

Here is an example of his style:

Bottom line it is highly recommended. Too bad I didn’t have the time to stay after to socialise with the other because I had to run to pick up my son, but the people looked really nice and apart from one who kept asking stupid questions (you always have that one) they all looked serious about trading.

I don’t know with other companies how it works but with IG Index you do get dividends. And if it is quarterly spread usually the dividend is priced in. That’s why the quote is lower than the actual price.

For example I opened a trade on Royal dutch shell for September when the share price was 1500 but I bought the future at 1479. When the ex-dividend was arrived the price has been balanced.

Hi all,

Our spread betting forum is opened! At the moment we have one room where you can share your tips (please read the disclaimer first!)
Soon we will open more rooms.

See you there!