2012 — My Experimental Year
“ThiS May SuRPRiSE MaNy ShoRTER TERM TRaDERS, BuT ThiS PaST MoNTh i havE PRoBaBLy oNLy ChECKED My ChaRTS aBouT 3 MayBE 4 TiMES.” I feel as if I have reached quite an important turning point on my spread betting journey this month. As each month passes, I begin to feel more and more comfortable with my strategy and I feel like I’m starting to bed down into it. I think (hope?!) I “get it” now. This may surprise many shorter term traders, but this past month I have probably only checked my charts about 3 maybe 4 times. Just today, for example, I’ve had to download 14 days worth of data on my charting software. It’s been two weeks since I last took a look at them. The reason is that I’m taking a longer term look at my trading. For example, in the last month or two, I have recently taken long positions based on prices moving above the 200 day moving average. Historically I noticed that when a price crosses this average it tends to go on for some time before crossing back down. During this time I’ll look at the price against the 100 day moving average as my exit. All very simple stuff, yet what this offers me is a good & steady trading strategy. I don’t need to keep an eye on daily price moves, in fact, over the last 2 weeks, many of my stocks have gone up, gone down and ended up pretty much back where they were! More importantly, I’ve saved myself a lot of stress. I’m also continuing to cut out the news reports. Sometimes I can’t help but see them, although I largely just ignore them now. I’ve seen enough to know that much of the time these reports or news feeds talk about what they “think” is going to happen, yet the only truth of the matter is that no one knows what the market is going to do. I must say though it feels very refreshing not to be glued to the financial news everyday. At one point I thought learning about the financial world was going to be crucial to my success. I’ve quickly learnt that I don’t need to know anything. If the price goes up I’ll buy, and I’ll sell when it goes down. Moves of 50 points in a day mean little to me. I’m more interested in the 400 points a week movements.
So far my strategy has been relatively successful. I’ve not opened nor closed any trades in the last 3 weeks or so, and none of my stocks are close to hitting my stops yet. I’m trailing these stops, so every week I’m slowly locking in profits. I’m still using my money management system to help me place my stops. The simple calculation of stop required / £ risk per trade = £ per point bet is still one of my fundamental rules that I’ve adopted from many other traders. This means that on many trades I’m using the minimum stake of 25p per point, but then this is balanced by the fact I’m 300/400 points from being stopped out and I’m looking for 1000+ pt moves.
“i MuST Say Though iT FEELS vERy REFREShiNg NoT To BE gLuED To ThE FiNaNCiaL NEWS EvERyDay.” I realise this is slow going, but it fits my style nicely. It’s been an incredible year. I’ve had a baby girl (not personally, that would be incredible!), my local football side Hastings United FC have made it into the 3rd Round of the FA Cup to play Middlesbrough— the furthest they have gone throughout their history, and they are now the lowest ranked team left in the competition. It was, of course, Olympic year which I enjoyed immensely, and I’m seeing the close of my first year of consistent spread betting. At the moment I’m probably on course for a Return on Investment (ROI) of approximately 20%. It’s not what I hoped for. I was looking at that 40% mark a while back. However, it’s also been a bit of an experimental year. I’ve made a lot of mistakes throughout 2012 and learnt from all of them. I’ll be a much more disciplined and, therefore, better trader in 2013, and having a 20% return target to beat should be a nice challenge. And so I’ll end this month by wishing all my fellow traders a prosperous New Year in 2013!
January 2013
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