Sorry, I think that may have been a stupid post on my part. I am now looking to try again at this strategy using what I have learnt from the past - stepping away has definitely allowed me to reflect on my mistakes. I will now try again this time using a higher ADX value in my filter and also only entering when a price does something favourably interesting around a Fibonacci level of past significance. I hope this will improve my success rate and with tight controls on the reward ratios I'll hopefully see some profitability. If not, back to the drawing board.
I will also this time use a risk per trade of 1% instead of 2%, a string of losing trades can hurt but I hope that by reducing the risk per trade, they will hurt less.
I will also this time use a risk per trade of 1% instead of 2%, a string of losing trades can hurt but I hope that by reducing the risk per trade, they will hurt less.
mpat89 - this sounds good to me, though I am a sceptic when it comes to ADX (and almost all other indicators). But multiple correlating price signals at a single given level are something drummed home by Alan Farley - very difficult to read and to follow in real-life trades, but, again, an approach I hope to graduate to.
Flatlander
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Hi,
Interesting reading this as I'm half way through the book. I'm new to this so thought I would try and implement some of Malcolms suggestions in order to get started (though I'm still lost by some of the terminology on the thread so still a way to go obviously). So it would be interesting for you to continue to report how you progress.
I just wondered mpat89, in the book malcolm talks about identifying (which I think he does via sharescope) stocks that are trending - maybe its anything up to 100 initially and then they are wittled down. I obviously don't want to buy sharescope as I'm just testing the water at the moment.
How did you do this first bit? You mentioned proscreener on IG Index. I'm with IG Index but I'm not sure what this is - is it the advanced charts you are referring to that you can click on to open on each stock? I can see from this you can get the ADX etc but not sure if you can use this package to pick out stocks.
In malcolms examples he uses ADX, 12month highs, and under/out performance of 15% compared to FTSE to initially identify shares to look at. How did you do this?
Thanks
Interesting reading this as I'm half way through the book. I'm new to this so thought I would try and implement some of Malcolms suggestions in order to get started (though I'm still lost by some of the terminology on the thread so still a way to go obviously). So it would be interesting for you to continue to report how you progress.
I just wondered mpat89, in the book malcolm talks about identifying (which I think he does via sharescope) stocks that are trending - maybe its anything up to 100 initially and then they are wittled down. I obviously don't want to buy sharescope as I'm just testing the water at the moment.
How did you do this first bit? You mentioned proscreener on IG Index. I'm with IG Index but I'm not sure what this is - is it the advanced charts you are referring to that you can click on to open on each stock? I can see from this you can get the ADX etc but not sure if you can use this package to pick out stocks.
In malcolms examples he uses ADX, 12month highs, and under/out performance of 15% compared to FTSE to initially identify shares to look at. How did you do this?
Thanks
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Hi,
You need to use ProScreener in the advanced charts to create a filter to only bring up the stocks you want. Unfortunately I've forgotten all the details for the IGIndex account I set this up on and won't be able to access it until their help desk is open. I can give you more help on this once I've got the details. I would definitely recommend ShareScope though once you feel it's worth it.
The ProScreener can be used to filter for ADX and 12 month highs, performance compared to FTSE is actually something I never used. Maybe I should re-read the book!
You need to use ProScreener in the advanced charts to create a filter to only bring up the stocks you want. Unfortunately I've forgotten all the details for the IGIndex account I set this up on and won't be able to access it until their help desk is open. I can give you more help on this once I've got the details. I would definitely recommend ShareScope though once you feel it's worth it.
The ProScreener can be used to filter for ADX and 12 month highs, performance compared to FTSE is actually something I never used. Maybe I should re-read the book!
Good in some ways, and has drawbacks in others.
I don't use it but I can see that the break of this level will come to many people's attention and that alone may cause price to surge. On the other hand, entering at a new high means you are the last to jump on the band-wagon just before it crashes (though an established trend is always more likely to continue, how do you know this isn't madly over-bought and may therefore reverse the more violently?), and the stop-loss is probably a long way down.
Anyway, break of a given level should be relevant to your projected or preferred holding period. If you only intend to hold 10 days, waiting 52 weeks for a signal doesn't feel like the right tool is being used.
I don't use it but I can see that the break of this level will come to many people's attention and that alone may cause price to surge. On the other hand, entering at a new high means you are the last to jump on the band-wagon just before it crashes (though an established trend is always more likely to continue, how do you know this isn't madly over-bought and may therefore reverse the more violently?), and the stop-loss is probably a long way down.
Anyway, break of a given level should be relevant to your projected or preferred holding period. If you only intend to hold 10 days, waiting 52 weeks for a signal doesn't feel like the right tool is being used.
Flatlander
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Ok, thanks
Am a newbie who has almost finished reading Morton's book. Have spent a fair time reading various SB threads on this site that seemed to raise more questions than answers so decided to go with the book to give myself a bit of grounding before even thinking about trading live.
Morton's strategy seems fairly logical to me so fully intend on going with that for starters.
One thing I'm undecided on is what instrument(s) to trade on initially. Have read elsewhere that novices are better sticking to indices but my gut instinct is to trade on equities. Any advice/thoughts?
Morton's strategy seems fairly logical to me so fully intend on going with that for starters.
One thing I'm undecided on is what instrument(s) to trade on initially. Have read elsewhere that novices are better sticking to indices but my gut instinct is to trade on equities. Any advice/thoughts?
Both have pros and cons. Indices avoid risk from company-specific news (though sometimes this type of news can be good for your position, long or short): the company will move much more than the index. Large cap companies and indices are both very liquid, so have reasonably tight spreads and looser magin requirments. Indices are tradable outside underlying market hours. Some indices, such as the FTSE100, are more volatile, more reactive to US markets etc. and often reverse intra-day: much London price action takes place before the open, leading to a gap, which then steadily fills all morning until the US markets start quoting pre- their open, throwing the whole game up in the air again. Many London large caps are also very sensitive intra-day to oil, the Dow and the $.
Suggest you find on market that is appropriate for your approach, paper trade it, then micro-trade it. Once consistently winning and you have an adaptable system, expand position size, and only then try to identify a second and third market / sector.
Suggest you find on market that is appropriate for your approach, paper trade it, then micro-trade it. Once consistently winning and you have an adaptable system, expand position size, and only then try to identify a second and third market / sector.
Thanks Tom, that pretty much confirms my thoughts. Learning to walk before I run....
Sticking to large cap companies also makes sense for the reasons you mention.
I think sticking with a simple system, which I understand, is important in the early days. Once I get to grips with that, I can start to take into account other indicators, etc.
Sticking to large cap companies also makes sense for the reasons you mention.
I think sticking with a simple system, which I understand, is important in the early days. Once I get to grips with that, I can start to take into account other indicators, etc.
montmorencyt2w
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Far be it from me...etc, but as a first stab, with equities, you have a massive choice - massive range of possibilities, but that could also be considered as a massive range of problems. With indices, the choices (problems ) are limited, similarly currencies (if you consider only the majors and the most important crosses).
Here's a thought: look at the most important commodities: oil & gold; the major currencies, and the indices of the world's major stock markets solidly for about 3 months and see how they inter-relate. In your spare time have a look at bonds.
Have forgotten what the actual strat was outlined in the book. Buying at the highs seems to be a strange thing to do but anyway...
Any ideas how we could adapt this screener to work?
http://www.marketwatch.com/tools/stockresearch/screener/
or
http://www.dailyfinance.com/markets/stockscreener
Any ideas how we could adapt this screener to work?
http://www.marketwatch.com/tools/stockresearch/screener/
or
http://www.dailyfinance.com/markets/stockscreener
Pound foolish
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The Handbook is really good. Mpats89 system should work most times but finding and identifying the trending companies is the hard part.
for my money best to do this over a longer time frame.
for my money best to do this over a longer time frame.
The handbook is really worth reading..... this book really clear many thoughts.......
http://www.spreadblogging.co.uk/
http://www.spreadblogging.co.uk/
