Tuesday 14th Breakout Trade!

I questioned recently whether I was Trading with fear? The last two days have answered my question. The decision of reducing my trades now looks to be a good one.

Most of the Forex pairs are proving a challenge to say the least. The markets are very uncertain and The skype trading group are having more losses than normal. Its the major uncertainty as to recovery or non recovery?

I did not wake up on time today, (Normally 5am) when I finally got the charts up and running cable looked to have moved a bit already. As already stated its currently channeling so I like the morning volatility of when it opens. It then dropped back to near the 50 level.

When its playing at 50 level I'm very weary as you know if you have read the blog previously. It quickly moved Back up after pull back on one red candle...That was my sign and I made some quick decisions to go in at 16270.00 due to the macd and histogram signs!

The other key indicator was the up trend and knowing there was a good chance it would go another 3 green candles. Taking into account I.Gs spread the entry was 16273.60 I then exited the trade at 16291.10 for a nice 17.5 pips. I trade the breakout on 5min candle so again the speed of the trade is obvious!

More detail this week on the other strategies....and as normal your comments or requests are very much appreciated.

To Your Success!

Forex and Trading Strategies!

Being a forex trader can seem very exciting. The majority of people who teach you to trade will always say if you want to make money you need to trade FX.

I trade three strategies on a regular basis, these are ftse at 8am, the forex hourly strategy and breakout trading. I also use a strategy on crude oil if the signs are correct. The oil strategy depends on the range and circumstances and is too subjective at the moment.

If you take last week as an example oil dropped nearly 30%, experts on bloomberg are contradicting themselves and are very unsure of where it's going. For this reason that strategy is currently on hold!

I will also say I probably have too many strategies! Analysis paralysis can be a huge issue when you become a trader. In your early days you will look for the holy grail of strategies and realise it does not exist. The only way to become a good trader is to find a strategy that suits you and do it over and over again until you get it!

Whatever you do Forex should be one of the strategies you use. It is the most liquid market and the brokers can not tamper with it as Much in terms of pricing issues!

Did not trade this morning on my favoured cable, the move happened while I was asleep at 3am. So there was no early morning breakout and the hourly strategy was ruined for the rest of the day!

To your trading success!

Spread Betting Versus Shares

Spread Betting: Reduce Taxes On Your UK Trading Profits!

The late Benjamin Franklin is remembered for once famously saying, "There are two things you can be sure of in life - death and taxes!" When an opportunity to make money and not pay any tax on the profit comes along, it's fair to say that most people would take a second glance. Financial Spread Betting falls nicely into this category.

Leverage

Spreadbets are leveraged, so with £1k margin, if you use, say, 10:1 gearing, you can gain the equivalent to £10k's worth of shares. Of course, then it only takes the shares to fall 10% to wipe out your margin. It's the same principle as property investment (with a mortgage). With traditional share dealing more money is required to cover the same amount you could with a spread bet. Of course with leverage comes risk - ultimately it is up to you to use good judgement and use leverage wisely.

Share trading		Spread bet
Current share price	464p	464.7		The slightly higher purchase price is to take into account no commission with spread bets
You buy	10,000 shares	£100 per point		100 shares = £1 per point spread bet. Therefore 10,000 shares is the equivalent of a £100 per point spread bet
Initial cash outlay	£46,400	£4,647		Spread bets on shares only require 10% of the toal trade size as a deposit
Stamp Duty	£232	£0		Stamp duty is not applicable to spreadbets saving 0.5% on all buy transactions*
Commission	£15	£0		Your current stockbroker may charge you a flat rate of £15 for example for a transaction of this size. Spread bets never incur any commission
Total outlay	£46,647	£4,647
You were correct and the share price of ABC Plc rose to 494p over the next month. You decide to close your position.
Current share price	494p	493.3p		The slightly lower selling price is to take into account no commission with spread bets
You sell	10,000 shares	£100 per point		To close an open 'long' postion you sell
Commission	£15	£0
Profit	£2,735	£2,860
Less Capital Gains tax (40%)	£1,101.20	£0		Spread bet profits incur no Capital Gains Tax liability. The rate used is based on a higher earner tax rate. Tax laws can change.
Total Profit after tax	£1,651.80	£2,860
Return on Capital	3.5%	61.5%		The significantly higher return on capital was the result of a much lower initial capital outlay for spreadbets as opposed to share trading
Note, if you were not correct in predicting the direction of price movement of ABC Plc you would lose money. Profits and losses can quickly exceed your initial deposit.

Trading Diary 2nd July

The markets are ranging so taking them very cautiously. Strategies on ftse and hourly strategies on cable are difficult to asses at the moment with no major moves. Generally as most know, the markets are usually trending up or down. But as we move into the so called recovery, the markets seem to be changing month to month.

With this in mind I have restricted myself to the gbp breakout in the morning. The number one point of trading is to preserve capital. Number two point in trading is to preserve capital. Number three point in trading is to remember points one and two!

Having said that ftse won 4 out of five trades last week so maybe I'm being over cautious, which is not a bad thing. As long as I am not trading with fear.....Not sure yet on that one. My Thursday breakout is above...Any comments let me know!

Effective Mind Control When Trading!

Trading can become a stressful game, you need to learn to control your mind to be a great trader.

learning to control your mind is not a sheer question of will. If it were, millions of others would’ve long be liberated. Instead, you need to be connected to a system which is able to teach you the secrets of controlling your mind, rising above reality and seizing your inner potential.

1. Trade in a calm assured state!
2. Destroy limiting beliefs!
3. Vision your trading goal so no matter what happens you are 100% solid in your belief of success!

The goal of the Silva Method is to teach you how to use more of your brain and activate the untapped areas of your mind.

If you envision the life of your dreams in your head, you WILL live the life of your dreams in this present reality. Imagine being stress-free? Where you’re no longer in the rat race because you already made it.

Imagine moving on to bigger and better things? That even when past memories are still there, the power that these past memories have will be banished forever.

As always, to your Trading Success!

Slippage

What Does Slippage Mean? The difference between the expected price of a trade, and the price the trade actually executes at. Slippage often occurs during periods of higher volatility, when market orders are used, and also when large orders are executed when there may not be enough interest at the desired price level to maintain the expected price of trade.

Slippage is a term often used in both forex and stock trading, and although the definition is the same for both, slippage occurs in different situations for each of these types of trading.
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Investopedia explains SlippageIn forex, slippage occurs when a limit order or stop loss occurs at a worse rate than originally set in the order. Slippage often occurs when volatility, perhaps due to news events, makes an order at a specific price impossible to execute.

In this situation, most forex dealers will execute the trade at the next best price.Slippage in the trading of stocks, often occurs when there is a change in spread. In this situation, a market order placed by the trader may get executed at a worse than expected price.

In the case of a long trade, the ask may have increased. In the case of a short trade, the bid may have lowered. Traders can help to protect themselves from slippage by avoiding market orders when not necessary.

Trading Diary June 30th

Tuesday trading began with me opening up the charts to see that oil (Brent Crude Oil on I.G) had a range of 190. Something had spooked it?

By 11 it was at a high of the year, I found out it was partially due to the attack on Nigeria bringing fears of lack of oil? Anything to push the price up!

Today's trading was similar to Monday, Cable had a huge break out on the back of the housing news. Nationwide gave better numbers on the UK housing industry which made cable fly when the European markets opened!

I entered the trade at 16665.8 as it broke the high of day at 16662. It was moving quickly and before I had a chance to get out with 20 pips, I was taken out by my limit order with 30pips.

Its a 5min candle that you see on the charts and I was in the trade for all of 2 minutes. If only they where all so easy....

I have now taken 45 pips this week on the breakout strategy. Not done many on the hour which can yield the bigger points. This weeks focus is to get some big movers. No more trading today for me!

Trade well!