New to swing trading

[si1503]

Greetings all,

I am interested in the financial markets and am invested in a few managed funds, a little while ago I investigated day trading however after using a few spread betting account demos decided it was not for me right now and I would stick to looking for more prominent share price movements.

I am now interested in having a closer look at swing trading, and initially was looking to invest fully into the shares going direct, but after reading some threads on here it seems some of you spread bet trade in this fashion with relative success?

I have a few questions for those of you with a bit more experience on this style of trading;

Firstly - direct investment vs. spread betting, pros/cons? which brokers have the lowest commission if I wanted to go direct (I would only be using several 000 at a time to invest, hence anything over £10 would really not be worthwhile), which spread betting companies are used and trusted around here?

Secondly - research, I wish to keep posting here a bit and getting more involved in discussions, but are there any books or other internet sources/articles that are good reads for wannabe swing traders?

Thirdly - market data (fundamentals and charting), okay, lets say I have my broker/spread bettor and I am all clued up on how to swing trade, now all I need to know is where to place my money! is there any free data feed or charting software to use/download? I am looking to keep costs as low as possible to begin with, if and when I up my stakes and start getting better then I will obviously look to invest in a better set-up and data feed/charting package.

Finally - any 'trade' secrets,PM me, or just for a general chat on the phone or whatever, I'd be happy to meet and talk to other traders either experienced or just starting out!

Thanks.

Simon

 

[tomorton]

Hi simon - welcome. On your queries -

1. No SB's are really to be trusted since you are head to head with them. They all seem to give good service until they suddenly don't. Commission (spread for SBs) isn't too big an issue if you're swing trading, getting out at the right place will save you much more than the costs.

2. Read Marc Rivalland, also Street Smarts by Raschke & Connors; and watch the 'swingin the ftse' thread on here.

3. Try ADVFN free service for a while, then compare with others.

 

[wildkactus]

simon, hi and welcome
1. I perfer the direct investment, and also use CFD's and Futures, I use MF Global and Interactive brokers.

2. Books and websites there are lots, here are a few that I have used / read
Books,
- Reminiscences of a Stock Operator- Edwin Lefevre
- How to trade stocks by Jesse livermore, their is also one by Richard smitten
- Come into my trading room By Alexander elder, or any of his books (Elder.com: Traders' Camps, Classes, Seminars, Books, Videos, Software)
- Way of the turtle, by Curtis Faith
- How to trade in commodities by W.D Gann
Webistes,
- Swing Trading Guide | Learn How to Trade Stocks Like a Pro!
- MrSwing.com - Your nr.1 site for Swing Trading and Day Trading
- or just google swing trading

3. Charting / data,
- have a look at Amibroker (AmiBroker - Technical Analysis Software. Charting, Backtesting, Scanning of stocks, futures, mutual funds, forex (currencies). Alerts. Free quotes.)
- incrediable charts (Incredible Charts).
- you can get data from yahoo or use a program like the data bull (DataBull : download stock quotes, historical quotes, futures and commodities) to gather it for you.
- also most brokers like IB etc offer data.

the sercrets mine is keep it simple.
all the best with your trading.

 

[si1503]

Thank you tomorton and wildkactus for your warm welcome and responses to my questions.

1. It seems direct investing is preferred here, and from others investors I know in person. I am currently with H-L for my UT/OEIC investments (Hargreaves Lansdown | SIPPs, ISAs, Funds and Share Dealing), as a UK investor they offer 9.95 gbp on deals upto 500 gbp, I am likely to be dealing no more than 500-1000 gbp a time, this is mostly due to a lack of captial and also being new to trading, I am more doing this to get a feel for trading rather then to make profits (althougth that is the ultimate aim, to begin with I think it is more imporant to learn and preserve).

2. Thanks for the books, this is excellent. I have already read one or two mentioned above. I also like one called high probability trading? I will try and have a look at some of the others.

3. I currently use digitallook.com's free service - website, portfolio, alterts etc. advfn too but not as keen on their website or alterts (personal preference I guess).


I would really like some more advanced charting - amibroker looks good, you pay the one-off fee then free to use thereafter? would I have data on there provided automatically or do I have to set that up from a feed, if so is yahoo free to feed this? would professional be worthwhile for me to begin or is standard sufficient?

Also I have heard a lot about sharescape in the past, how does amibroker compare? (obviously in the long-run amibroker would be a lot more cost effective).

Finally if investing direct, how do I go short? (sorry if that is a dumb question)

Thanks again,

Simon

 

[wildkactus]

Simon,
brokers in the UK i don't know a lot about so someone else here will have to direct you on that,

Amibroker and how it compares to other packages, I found it to be right there with some of the more expensive ones, so cost does not always mean better, For my style of trading which is EOD swing / position I find it to be perferct, the back testing feature is really helpfull, so is been able to program your own features into the software. I went with pro from the start as it gave me the full suite of options, but if you just want to trade EOD the the standard would be ok, I think pro is better for everything else.
There is a yahoo group that is good for more info on amibroker.

Data from yahoo is free and is IMO realy only for EOD trading, if you wanted to Daytrade I would get a good data feed from a broker.

Another website I find very handy is Quote.com - Your Source for Financial Markets Quotes, Charts, News and Education, they have quotes from markets all over the world and a charting feature.

With going short, you just sell the stock first instead of buying it, then you place a buy order to close out the trade. This is if the stock is available to short by your broker, they normally have a list of stocks available to short, not all stocks are.

all the best for your trading journey.

 

[tomorton]

Hi Simon -

I don't know about amibroker or direct trading but I have had Sharescope Gold for some years. It gives EOD prices on 11,171 insruments including shares, indices, commodities, exchange rates, investment trusts, unit trusts, gilts, ETFs etc. It provides EOD RSS news, lots of charting options and many fundamental criteria that you can either set up tables with or use as filters to select targets. Does not feature shares not on LSE (so British and Irish only), not all commodities, not all global indices. I suspect it shows all LSE-traded ETFs but I haven't got round to checking.

It is fantastic value at £14 per month. This subscription doesn't seem to have gone up since September 2004!

 

[Splitlink]

:whistling

Hi Simon -


It is fantastic value at £14 per month. This subscription doesn't seem to have gone up since September 2004!

Sshhh! :whistling

 

[si1503]

Hi Simon -

I don't know about amibroker or direct trading but I have had Sharescope Gold for some years. It gives EOD prices on 11,171 insruments including shares, indices, commodities, exchange rates, investment trusts, unit trusts, gilts, ETFs etc. It provides EOD RSS news, lots of charting options and many fundamental criteria that you can either set up tables with or use as filters to select targets. Does not feature shares not on LSE (so British and Irish only), not all commodities, not all global indices. I suspect it shows all LSE-traded ETFs but I haven't got round to checking.

It is fantastic value at £14 per month. This subscription doesn't seem to have gone up since September 2004!

I was actually looking at this in more detail yesterday evening. I think I am actually swaying toward sharescope Gold, as you say it is good value and if I am trading for periods of days/weeks at a time, as opposed to minutes (in intra-day) then EOD information should suffice. I don't think I would have time to check data much more often anyway, and if I do need to check during the day then I have digitallook/advfn that provide slightly delayed quotes.

With this in mind I am strongly considering sharescope. I was also looking at some videos of the alpesh patel addition. So okay it is all basically just indicators based on different financial measures/ratios, some technical indicators and other things as far as I am aware, nothing of any value to an experienced investor with their own systems and indicators, but for a beginner it could perhaps be interesting to see what indicators can be used when looking to come up with an investment strategy, or am I just being too lazy here?

The sharescope tools would certainly help me in making investment decisions, be it UT's or individual shares, and as far as I am aware you subscribe and that is it - you are good to go (I downloaded the amibroker trial but having difficulty getting UK data on it, and the interface seemed a little unfriendly, but that is only my very initial impression).

Simon

 

[si1503]

Simon,

With going short, you just sell the stock first instead of buying it, then you place a buy order to close out the trade. This is if the stock is available to short by your broker, they normally have a list of stocks available to short, not all stocks are.

all the best for your trading journey.

wildkactus - thanks for clearing that up I will check with my broker on Monday.

 

[Splitlink]

I was actually looking at this in more detail yesterday evening. I think I am actually swaying toward sharescope Gold, as you say it is good value and if I am trading for periods of days/weeks at a time, as opposed to minutes (in intra-day) then EOD information should suffice. I don't think I would have time to check data much more often anyway, and if I do need to check during the day then I have digitallook/advfn that provide slightly delayed quotes.

With this in mind I am strongly considering sharescope. I was also looking at some videos of the alpesh patel addition. So okay it is all basically just indicators based on different financial measures/ratios, some technical indicators and other things as far as I am aware, nothing of any value to an experienced investor with their own systems and indicators, but for a beginner it could perhaps be interesting to see what indicators can be used when looking to come up with an investment strategy, or am I just being too lazy here?

The sharescope tools would certainly help me in making investment decisions, be it UT's or individual shares, and as far as I am aware you subscribe and that is it - you are good to go (I downloaded the amibroker trial but having difficulty getting UK data on it, and the interface seemed a little unfriendly, but that is only my very initial impression).

Simon

Once you have selected the shares that interest you from Sharescope you should be able to get a realtime service from your broker, provided he trades that share. You need Sharescope, though, so as to be able to scan the lot.

When you open an account ask them if they provide a real time chart service (free).

I use a spreadbetter, but the choice is up to you. I posted three timeframe chartsa short time ago on one of the boards. Here's the link for you to look at.

http://www.trade2win.com/boards/first-steps/33373-need-help-trading-daily-tf.html#post444567

There are several bars that you can use, plus all the timeframes and half a dozen indicators. I'm waiting for the day that they provide an audio alarm but I guess, for free, it will be a long wait.

Regards Split

 

[si1503]

Well I went with sharescope Gold in the end, been playing with it over the weekend and quite happy with it so far; looking forward to getting to grips with it more over the next few weeks.

I will check with H-L what they offer.

Which spreadbettor are you with? I am considering using a SB with a small bank just initially to learn on (get used to entry/exit, develop my own selection criteria, prefered strategy, etc) as I do not have the capital right now to make direct market trading worthwhile when factoring in commission.

I assume any SB company will be okay for taking postions over several days to a few weeks? I am considering CMC as I know they are quite popular, but as far as I am aware they all offer a similar sort of thing (IG, tradindex, capitalspreads, GNI... etc).

Simon

 

[Splitlink]

Since you ask for advice, I'm with Finspreads. Like the rest, there are those for and against. CMC have been getting some stick, lately, but do not know them to make judgements. There is a spreadbetting board.

I find Fins quick and the chart service is good. Spreads on Footsie and Dax are 2 points and SP 0.6 points. Be careful with spreads on everything else. Make sure you've checked them out before you press the button!

Good trading.

 

[si1503]

Thanks. I think I will check out CMC and if I get on okay with them and run into problems then I can always move elsewhere. It seems to me those most fustrated are those that make good profits then are given poor quotes to get out of trades; so I doubt this will apply to me for a while! (But you never know!!), and I have also read of spikes in prices to hit stops - which is really not on, however this was back when they were based in oz.

On the plus side they have a deposit £200+ and place 2 trades and they will credit your ac £100 offer for new customers until the month end, not a bad little incentive to give them a try.

Simon

 

[Splitlink]

Thanks. I think I will check out CMC and if I get on okay with them and run into problems then I can always move elsewhere. It seems to me those most fustrated are those that make good profits then are given poor quotes to get out of trades; so I doubt this will apply to me for a while! (But you never know!!), and I have also read of spikes in prices to hit stops - which is really not on, however this was back when they were based in oz.

On the plus side they have a deposit £200+ and place 2 trades and they will credit your ac £100 offer for new customers until the month end, not a bad little incentive to give them a try.

Simon

Spikes are always an unknown menace. Before you blame the spreadbet companies, though, make sure that the spike is not general in the market, as a whole. I've never been able to protest over a spike. When I've looked at Big Charts, for instance, I have found the spike there, as well.

AND be careful with overnight trading!

To be frank with you, I find that my exits on Fins are as good as the entries. Limit orders and stops are better, in my experience, than manual closing in a fast moving market.

Remember to ask yourself that, where you put your stops, is that where everyone is putting his and will the professionals be waiting to enter the market at those levels?

Good trading, Split

 

[si1503]

Spikes are always an unknown menace. Before you blame the spreadbet companies, though, make sure that the spike is not general in the market, as a whole. I've never been able to protest over a spike. When I've looked at Big Charts, for instance, I have found the spike there, as well.

AND be careful with overnight trading!

To be frank with you, I find that my exits on Fins are as good as the entries. Limit orders and stops are better, in my experience, than manual closing in a fast moving market.

Remember to ask yourself that, where you put your stops, is that where everyone is putting his and will the professionals be waiting to enter the market at those levels?

Good trading, Split

Hmm the more I read about CMC the more I get put off. I am currently looking at the Capital Spreads and GFT demos, had Bloomberg on today Cap spreads prices very tight and accurate, heard positive things about IG index too. I guess it will just be a case of trying some of them out till I find one I feel I can work with.

And when you say be careful overnight, are you purely referring to the importance of setting stop losses? - This is something I will certainly be doing, I think I will set stop losses and also limits slightly beyond what I normally would, then monitor at open, midday and before close, and manually close trades where possible, as I feel exits from stops/limits are far from ideal, but I wouldn't dream of placing a spreadbet without a stop, ever.

 

[Splitlink]

I can't comment on what I don't know so all I will say, for informative reasons, is that Fins costs 100 pounds to open an account and they have a minimum trade of 50p.

When the markets close, If you have a future, that instrument is traded on Globex, in Chicago. Sometimes, quite wild swings take place, triggering even the farthest stops and you can wake up with no trade. The same can happen with a rolling trade because, although your instrument is closed for the night, the gap the next morning, when the market opens, will make it impossible to close that trade at opening.

There are two groups of traders. Those who assume the overnight risk and those who close the trade before the close. With swing trading, you have to take the former choice as one of the risks involved.

 

[si1503]

Sure. FYI I will be trading mostly equities and sometimes commodities. Hopefully that sort of thing will not be too much of an issue, but of course, I am aware the risk is always there, at any moment anything can happen.

 

[sachuc]

I wanted to know how can swing trading or any techniical tool work if dsow goes 300 points up one day 500 points the other day again 200 point up next day no pattern can work in such volatilty I also want to know how to start a new thread
Sach

 

[Splitlink]

The SP500 seems to work quite well for me overnight, without the swings that you describe. Take a look.

You can start a new thread by going to the forum page, selecting your forum and at the top left you will find the button.

Split

 

[tomorton]

Hi scahuc -

There's TA and there's TA. But the sort of TA you choose should be the type that supports and informs your trading, so there's not much point worrying about head and shoulder patterns that develop across a 4-month time frame if you are trading with a 4-hour or 3-day horizon.

The exeptional volatility we have recently experienced can be ignored. If you have system that works with normal market conditions that apply 90% of the time, you don't even have to trade when the market is behaving unusually. Don't throw out a system just because you don't make a profit on a +/-500 point day, as long as you don't make a huge loss you can ignore these as they are so rare.