Financial-Spread-Betting.com reviews trading seminars and systems like the trading system developed by Mark Shipman, a 45-year old millionaire Irish trader who uses spread betting as a tax-efficient way to leverage his investments.
I do use a trading strategy similar to the one developed by millionaire Irish trader Mark Shipman. It is called 'Trend following' and not 'Trend following for Equities only'. The same basic principles of Trend Following apply with equities as they do with commodities or indeed buying houses. I like Shipman...I think he has a very valid point about the commodity market. If you apply his 'different phases of a bubble' to the Irish housing market then it makes perfect sense.
Mark Shipman's Trading Strategy
I've been inspired to develop this trading system based on Mark Shipman's trend following system. The trading strategy involves trawling the market looking for stocks/indices that match a particular criteria. The Criteria is made up of a combination of indicators (ADX > 30 and rising, MDI, PDI, stock in pullback from 60 day high, Risk Ratio over 2, etc...etc..) I have researched each indicator and then I have created a formula. When I run the formula against the list of market (filtered - because the spread betting company have to list the stock before they will take the bet) stock I get a handful of potential candidates back.
Note: ADX is Average Directional Indicator, MDI stands for Directional Movement Indicator while PDI is Price Direction Indicator.
These are the watches. I review the charts and then decide on the Buy/Sell levels, stop loss..etc and place an order. This is called the setup. If the stock triggers I end up with an open position, if not then after a number of days it gets discarded.
I never risk more than 1% of my capital. I never move a stop loss back after it is setup. I do no background checks on the companies as I am not betting on their latest products or End-Of-Year results, I am betting on what the market decides is likely outcome is for this stock. Just following the gang - jumping on when a trend has started and jumping off after it has ended.
If profit is made I use a trailing stop loss to lock in some of the gains before the market turns again.
Stock markets moving sideways kill me. They need to be clear Bull or Bear, then you are just jumping onto market sentiment.
Keep the losses to a strict limit but let the winners run. In a good trending market the few winners should easily cover all the small losses.
In other words I am sampling stocks that have good potential for price movement.
As I said before the strategy is not the most important thing, the Risk Management is. It is a serious learning curve that I have no doubt will take years to master but I have the interest so...
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