My take on spread betting,...

[ULTIMATEONE]

So you guys are reccomending long term trades (i.e Open @ 10AM Close at 1PM) and make a decision before hand whether the market will rise or fall?

I would've thought this is harder to do as it could be harder to 'hold on to' if it starts to go the opposite way you would have thought it to go.

What are your thoughts on placing bets after 4:30 for re-opening the following day? (I'm aware it trades until ~9 for USA, but unsure of 9pm till 8am uk time)

 

[pboyles]

If you trade like this you are just guessing, don't trade real money until you know what you're doing.

 

[leonarda]

I would've thought this is harder to do as it could be harder to 'hold on to' if it starts to go the opposite way you would have thought it to go.

that's trading... it's probability (whatever the timeframe), ie.you see a "setup" meaning you have determined the probability of it moving in your favour to your target price over your timeframe to be say for example 60%, but moving to your stop of 40%. Your risk/reward ratio is say 1:2, so 60% chance you win 2R, 40% chance you lose 1R. Hence over time you'll be in profit...

if you think it's likely the price is going to go against you and hit your stop, then your entry is wrong as your mental probability is not right.

 

[ULTIMATEONE]

If you trade like this you are just guessing, don't trade real money until you know what you're doing.

Can you elaborate how to improve? I'm all ears for feedback but I'd like to know how to get better...

that's trading... it's probability (whatever the timeframe), ie.you see a "setup" meaning you have determined the probability of it moving in your favour to your target price over your timeframe to be say for example 60%, but moving to your stop of 40%. Your risk/reward ratio is say 1:2, so 60% chance you win 2R, 40% chance you lose 1R. Hence over time you'll be in profit...

if you think it's likely the price is going to go against you and hit your stop, then your entry is wrong as your mental probability is not right.

Thanks for the reply leonarda

 

[Splitlink]

So you guys are reccomending long term trades (i.e Open @ 10AM Close at 1PM) and make a decision before hand whether the market will rise or fall?

I would've thought this is harder to do as it could be harder to 'hold on to' if it starts to go the opposite way you would have thought it to go.

What are your thoughts on placing bets after 4:30 for re-opening the following day? (I'm aware it trades until ~9 for USA, but unsure of 9pm till 8am uk time)

That's the difference between trading overnight, or for a few days, and day trading. With the latter, you go to bed closed out and free of problems.

It's horses for courses and your own character.

 

[pboyles]

Can you elaborate how to improve? I'm all ears for feedback but I'd like to know how to get better...



Thanks for the reply leonarda

To start with go to mypivots.com and find the weekly pivot points for your index, most are already posted there but you can also calculate them yourself with their calculator. Unless price is at one of the pivot points dont trade, that is lesson number one, sometimes you just have to wait.

When price is at a pivot level then you have a potential trade. Personally I use PIN bars to enter a trade although I suppose you could use another method like MACD etc, though personally PIN bars suit me very well as they provide a built in stop level.

So on the attached chart price comes down to the weekly R1 (WR1) level, a PIN bar forms and you buy at the close of the PIN. Stoploss is 1 tick below the low of the PIN bar. In this case buy on limit order at 1104, stop at 1102.50, take profit 1105.50.

The same trade could have been taken off the 5 minute chart as well, buy at 1103.50, stop 1102.50, take profit 1104.50

 

[pboyles]

I should add that I trade futures and dont spreadbet, your SB spread will obviously increase your losses and decrease your winnings. Two more examples attached, some off pivot levels some off round numbers (5000 on FTSE)

 

[ULTIMATEONE]

thanks pboyles for the info

Been looking at the MACD Divergence again and I can't spot - even going back days/weeks - the MACD seems to be always corresponding with a rise or fall, never a divergence between the two. Yet example videos/pictures show it very clearly?

 

[pboyles]

thanks pboyles for the info

Been looking at the MACD Divergence again and I can't spot - even going back days/weeks - the MACD seems to be always corresponding with a rise or fall, never a divergence between the two. Yet example videos/pictures show it very clearly?

MACD divergence does work, I've used it in the past, the trouble is it needs to be at a support or resistance level, otherwise its just a waste of time. The attached chart shows divergence on an indicator I wrote myself, its basically a home made MACD using 5 and 35 as the periods.

 

[pboyles]

Heres another example using different charts. I should have mentioned that if you can set the MACD to display as a histogram, it seems easier to spot divergences.

 

[Splitlink]

I have not used indicators for years, other than averages to give me trend ideas. Since MACD has been mentioned on this thread I thought I'd have another look at it.

I don't think that I was wrong to chuck it out!

 

[ULTIMATEONE]

Thanks

Is this right with MACD Divergence?

Uptrend connect the bottoms and Downtrend connect the tops?

I'm getting confused with what to do as I'm sure someone else said it the opposite way around. Any help guys on drawing divergences?

I've managed to get one correct, out of about 5 attempts - didn't trade on any of them though, just analysing.

 

[Splitlink]

MACD will tell you that the distance between two averages is widening or narrowing. It all depends on what averages you are using. I cannot, personally, depend on divergences. Sometimes they work and sometimes they do not. Averages drawn on your chart will give you the same information as an indicator will.

I have the impression that an MACD indicator will confuse a trader more than help.

Anything based on averages is a lagging indicator. By the time that the indicator gives the signal, the current price is well underway or it is going to whipsaw.

If I were you, I would take a look at price bar patterns but, be warned, they can give wrong signals, too, because scalpers are waiting to hammer stops.

This is a very difficult occupation and each and every one of us is different in our trading styles.

 

[Black Swan]

Given you know nowt I've given you a perfectly good method to introduce yourself to trading...now crack on, don't bother us for a couple of weeks, come back and let us know how you got on...

 

[pboyles]

Say the Ftse comes up and hits 5000 and then drops off down to 4950. Then later it comes back to 5000 again, on the second touch of 5000 the macd is not as high as it was the first time it touched 5000. That's divergence, I'll post a picture in a bit.

 

[diy_]

If like me you're new to this thing why worry about divergence? why not go for trades that is showing a proper trend like the eur/usd at the moment? support and resistance trading can be difficult sometimes. I've lost money on the eur/gbp, could'nt beleive it. and thats suppose to be support/resistance

 

[pboyles]

If like me you're new to this thing why worry about divergence? why not go for trades that is showing a proper trend like the eur/usd at the moment? support and resistance trading can be difficult sometimes. I've lost money on the eur/gbp, could'nt beleive it. and thats suppose to be support/resistance

So you'd sell EURUSD?

 

[ULTIMATEONE]

Given you know nowt I've given you a perfectly good method to introduce yourself to trading...now crack on, don't bother us for a couple of weeks, come back and let us know how you got on...

Ok, just keeping it open wih questions that I come across whilst researching are good to ask here

Say the Ftse comes up and hits 5000 and then drops off down to 4950. Then later it comes back to 5000 again, on the second touch of 5000 the macd is not as high as it was the first time it touched 5000. That's divergence, I'll post a picture in a bit.

That would be great pboyles.

 

[pboyles]

Ok, just keeping it open wih questions that I come across whilst researching are good to ask here



That would be great pboyles.

OK so look at the angle of the 2 lines, price is making higher high but the macd isnt, its making a lower high

 

[ULTIMATEONE]

thanks pboyles

Is the MACD direction the possibility of the direction that the price will go? I know its not for certain but as a rule of thumb the incline/decline of the MACD is the possible direction it could go?

Been doing loads of examples today and think i'm getting better at analysing (before it was too much of a guess, and to be honest fell stupid about it now, even though at a profit still afterall its money and I was guessing as if I was playing with demo money!)

Just want to say thanks for all the input into this thread already, thanks for being welcoming to newbies !!