Trading UK shares

[strewthmate]

Hello

Don't know if this is the right place to post this but here goes: I'm planning on trading UK shares, holding for a few days to a few months. I've created a database that consolidates daily newspaper tips, BB comments and Shares/ IC mag tips to narrow down shares with the right (or wrong!) fundamentals.

I plan to monitor the shares most tipped and trade using TA. All good in theory but I'm having trouble finding a good generic system to apply. Just wondering if anyone could be so kind to share some wisdom.

Any help very much appreciated

Dave

 

[FTSE Beater]

Hi StrewthMate

What do you mean by a good generic system?
Are you talking in terms of FA or TA or entry etc.?

Also I would look at http://uk.finance.digitallook.com as a good research point. They used to do a section on newspaper tips that came out on a weekend. Not sure if they still do though

 

[strewthmate]

Hi FTSE beater

Digital look is one of the websites I'm using for my database. Prob didn't explain myself too well. I'm quite happy with my data base I've developed for stock selection in terms of FA. So if x amount of people are saying buy/ sell on a particular stock I put it on my watch list. The final trading decision is made based on TA for the actual timing of the buy/ sell.

By generic system I mean a system that could be applied to any share. From what I've read, some shares can behave differently, and certain rules apply to different shares. with all the time I've put into the first stage I haven't time to tailor my approach for each share

So really I was wandering if anyone had any good tips for using TA on shares on a daily basis. I've been using Bollingers and a 9 day ema in conjuction with MACD, but it doesn't appear to be working as well as I'd hoped.

Dave

 

[wysinawyg]

For an example of a forward tested system combining TA and FA that has pretty simple TA entry and exit rules you could look here:

http://boards.fool.co.uk/Message.asp?mid=8184933

although you'll need to search around a bit for the rules.

Doesn't seem to be doing too badly.

wysi

 

[strewthmate]

Thanks for that

Like you said it looks like I'll have to do some rooting round for the the rules, but the results look good. I'll post what I find on here for whoevers interested.

Dave

 

[FTSE Beater]

Hi Strewthmate

Late to the party I know, but I would use FA to get the direction, then your looking for a safe TA entry. For that I would use basic support, resistance and trendlines. Looking for either break-outs or reversals

HTH

 

[ZigZag]

strewthmate.... Let me save you a lot of time,frustration & heartache. When I first started on the "long march" I did something similar. The basis of your potential method is that the pundits know more than you do. Believe me they do not. Remember 90% of the so called professional stockbrokers and fund mangers have made a loss over the last 4 years and even more than the FTSE index. You will find now that most of them are closet trackers who charge over the top commission for their services. The sad thing is you have small time investors signing up every day for their so called expertise. There should a law against their deception. When you mentioned the I.C !!!!!!!. Save your money and buy trading books. The prime rule is dont listen to tipsters or in fact anyone else. The solution is to develop your own method. Yes, it will take time. Yes , you will have to burn the midnight oil but you will eventually succeed if you have the stamina and commitment to reach your goal. Good luck.

 

[strewthmate]

Zig Zag

I take your point - especially as equitable life is now in trouble after in transfered most of its money to bonds - pretty much at the bottom of the market, missing out on the recent rally. Fund managers and big brokers do appear to be cumbersome at best. I remember reading somewhere how brokers upgrades/ downgrades are usually way behind price movements and not to be relied upon.

More research for me then!

For anyone who's interested the system wysinawyg was referring to is called CONDOR its currently up 30%

FA consists of selecting stocks that have a markey cap of >250M and a P/TBV (price to net tangiable book value) <1.33

TA is simply a 300 day Stochastic and 5 day MA. Buy when stochs rise above 25% from below and all indicators are up.

 

[techst]

Hi Strewthmate

I may be a little late to pick up on theses postings. But it's nice to see so many different ideas and strategies on these BB's. Which is good for the 'TA a Self- Fulfilling Prophecy?' argument.

If you are using tips and BB's to filter shares. It may be saying that you don't trust your own judgement. A good and easy to read book i liked on trading was 'A beginners guide to short-term trading' by Toni Turner. 'Technical Analysis of the Financial Markets' by John Murphy is a must for any traders bookshelf. From then on any of Jack D. Schwagers are full of useful guidance. Any thing on Jesse Livermore is a great read also.

I think getting the basics down is essential. I spend alot of time looking at charts and their patterns. Drawing trendlines checking out candletsticks/bars and line charts. As for indicators i like RSI, Momentum, MACD, OBV and volume additionaly.

As i learn more, keep studying and making notes on books and in my trading journal the chart patterns are becoming clearer and the profits more consistent. I think it's a constant learning process that never stops. And the more you learn, the opportunities i see.

Techst@

 

[strewthmate]

Thanks

I've been reading a book on pattern trading. I've found it really useful in identifying the patterns and their usual behaviour. Being a psych graduate I'm curious as to whats going on in the patterns. Can anyone recommend a book that explains markets psychology in these patterns. Thanks for the help people.

Dave

 

[CityTrader]

For markets physcology I suggest you read " extraordinary delusions and popular madnesses " ( or whateve rit was called- something similar?)

I use to work for a company called Mocatta & Goldsmid who were one of the leading bullion trading companies in the world. their NY arm was owned/run by a guy Henry Jarwecki (?) who was a qualified psychologist. He believed he could understand human nature and it's greed and prosper by anticipating this...

personally I don't believe you can become a trader by reading how to understand charts using TA books. I believe you have to decide how you intend to trade, ask yourself why you are going to trade, and then get out there. Hopefully with enough money that you can ride the bad days, and hopefully be smart enough to learn from your mistakes...

Wayno