• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Trading Simply: The Ramblings of a Newbie Spreadbet Trader

Spread betting | The Simple Way to Trade the UK Stock Market

  • Home
  • About Me
  • How I Trade
  • My Trades
  • Podcasts
  • Resources
  • Contact

Spread Betters Investment Strategy

June 4, 2016 by tradingsimply2 Leave a Comment

It is absolutely mandatory that you treat every trade you place like a business transaction and not just a simple bet. If the latter is your choice and mentality, you might as well stop now. A change of attitude and mindset is what makes an efficient spread better and also what separates a good trader from a mere “Punter”. Just remember that every penny counts!!

So, what do you look for?

Daily Bar Charts

Daily charts are one of the first steps of analysing market trends. They offer you the opportunity to look for patterns within the market and give you a vague understanding of where the market is moving. The two most common charts are the bar chart and the candlestick chart.

Candlestick Charts

A typical candle represents one day’s action. The top indicates the highest price for the day whilst the lower part of the stick shows the lowest price achieved on the day. The width of the charts however indicates the range of the price on the given day. A white candle stick indicates that the security closed higher than the open and vice versa.

Daily Chart

The above chart shows a monthly chart of daily bars for the stock “Anglo American”. The chart is a typically very easy to follow and learn, as to the plain eyes it shows a security going through a rise in price and steady up trend.

Moving Averages

This is another tool that offers indications as to where the market is pulling towards. An uptrend can be spotted when

  • Prices being above the Moving Average (MA)
  • The Moving average is upward sloping
  • When a shorter MA is above the longer term Moving Average e.g. 50 days above a 100 day Moving average

The reversal of the above criteria can also be used when looking at a downtrend.

Once a possible trend has been detected, you then start considering ways of getting into the market.

Moving Average

The above chart shows Anglo American’s monthy market numbers, with a fifty day Moving average added, notice that the moving average points updwards and that prices stay well above it. The resistance to the moving average would have been the best time to enter the market.

Relative Strength Index (RSI)

This simply shows how an instrument has been performing relative to another. Let’s say a stock has been underperforming an index by 20% to 30% over a 3 months period, while it is not guaranteed that the instrument is in a downtrend, it gives you a possible indication of where the trend lies.

Attention to Market

Keeping a close eye to daily market news is a key part of being a successful spread better. The current climate hovering around the market means that any good or bad news in the market moves very fast and triggers a whole wave of sell off or sudden up turn in the market.  So you want to be in a position where you can capitalize on any climate you find yourself.

Filed Under: Trading

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

New to spread betting and stock markets? – Check these links out.

  • Tools You Need to Trade the UK Stock Market
  • Are You Cut Out For Spread Betting?
  • Spread Betting Secrets
  • Successful Spread Trading - It's All In The Mind!
  • Podcast: What is Spread Betting?
  • Understanding the Risks of Spread Betting UK Shares
  • How to Make Money from Stock Markets Going DOWN

Categories

  • Blog Updates (2)
  • Financial News (2)
  • Fundamental analysis (2)
  • My rants (1)
  • My Story (4)
  • My Trades (2)
  • Portfolio (1)
  • Psychology (1)
  • Spread betting (7)
  • Stock market (1)
  • Stock Market Reports (10)
  • Technical Analysis (3)
  • Trading (21)

Recent Posts

  • My Trading Journey
  • Better start paying more attention to Indicators
  • Sharescope and Power Plays
  • Spread Betters Investment Strategy
  • SPREADBETTER: The Complete Guide To Financial Spread Betting
  • The Workings of Leverage
  • Choosing a Spread Betting firm – What to look for?
  • Advantages and Disadvantages

Footer

Pages

  • About Me
  • Contact
  • Disclaimer
  • How I Trade
  • My Trades
  • Podcast
  • Privacy Policy
  • Recommended Reading
  • Resources
  • Trading Simply ebook

Featured Posts

I have been spending a fair bit of time working on my trading plan and thinking about my approach to trading so I thought I would write a bit about it.  My background in the markets is purely non-professional and dates back to the mid 80’s when I used to chart share prices on graph […]

More

Thanks for dropping by! Feel free to join the discussion by leaving comments.

© Copyright 2011 Trading Simply. All Rights Reserved.