Share Strategies for Explosive Profits
I often wonder why traders still buy and sell shares, trying to eke out a profit while tying up a lot of capital, when they have the option of spread betting and leveraging their money on the stock market. For those who prefer stocks and shares, and don’t want to get involved in futures and Forex, it’s the obvious and efficient choice.
With that said, here are some tips to making explosive profits spread betting on the financial markets. If you are used to following the share indices, you will find life much more exciting when spread betting on individual shares. You should watch out for the FTSE market between 1:30 PM and 3 PM as there will be increased volatility at this time, when the US frequently reports economic results.
You can choose whether to spread bet on the FTSE 100 companies, which are well reported and traded, making them a known entity with low spread costs, or to choose the smaller 250 companies reflected on the FTSE 250, which will move more slowly but potentially with larger moves, at the expense of having bigger spreads. Some spread betting providers offer small caps, but the range will be limited because of low liquidity.
To find the best profit prospects, look for the following points. First, look for a strong trend where the share price has recently moved up or down the chart at 45°. From looking at the chart, see what the range of price movement has typically been.
This will allow you to see whether there is enough movement in the trading range to allow a reasonable profit once you have covered the spreads. As a further check, look for the next resistance or support level which may limit the price movement.
If you’re making a long or buy bet, wait until the chart is going upwards, rather than trying to anticipate a reversal; for a sell bet, the price should already be going down. Make your bet and be sure to place a stop loss, if the software does not automatically do this, in case the trend reverses.
Always look for at least two corroborating indications that the trade will be successful. In this respect, you can choose whatever indications you want, as long as you have checked that they work effectively on the underlying financial security. Some traders prefer the simplicity of the moving average crossover, and there is a lot to be said for keeping it simple. Others prefer the parabolic SAR, the MACD cross, or look for candlestick patterns.
Whatever you have chosen in your trading plan, make sure that the indications are relatively independent, and not based on the same data, such as two volume-based indicators. With so many oscillators and indicators vying for attention, it is easy forget the basics of where they are derived from, and fall into this trap. If you instead have two completely different types of indication that the trade is likely to succeed, then you have greatly increased your odds of profitable trading.
Note: If you are going to day trade stocks you want them to have a reasonable daily range. You could look at such stocks like BP or banking stocks.