I use end of day charts and news announcements to trade the UK stock market. You could say I use technical (95%) and fundamental (5%) analysis. My trading strategy includes both long and short positions. I always trade with a stop loss and determine where the stop loss is before I open a new trade.
Building a successful strategy
Spread betting the UK stock market carries a degree of risk higher than traditional share trading. The following links will direct you to posts covering different aspects of spread betting and how it relates to the trading of shares listed on the London Stock Exchange:
When I trade
I am an end of day discretionary trader of UK shares. This means that I go through my scans and research during the evenings after the stock market has closed. I have a full time job and even if I didn’t, I would still trade shares after the market has closed because it usually takes me between 20 to 60 minutes a day to research and trade, depending on the market action.
What I do
My method of analysis is called top down analysis. This describes the fact that I look at and determine the direction of the FTSE 100, the main market. I then focus attention on the UK market sectors and choose the strongest shares based on the strongest sectors. Both the sector and the individual share should follow the trend of the main market (FTSE 100). I use three time frames: daily, weekly and monthly. It is rare for me to take a position against the trend of the main market.
When I perform top down analysis, I look for chart patterns and use trend lines, support and resistance, volume as well as
the 25, 50 and 200 simple day moving averages. I use both candlestick and line charts. My evening scans include new 52 week highs and lows, and percentage gainers and losers. I search for bowls, triangles, flags and any price action that looks interesting.