Don't forget the Spread Betting Stop Losses
Spread Betting Trading Centre: Do you follow any methods for when you are getting in or getting out of your positions?
Steve Brown: Prior to opening or closing any bet I always check level 2 data. This is an invaluable service in that it lets me know in its most basic format when a price is about to move up or down. The detail within level 2 when monitored over time also let's me know when Market makers are playing with prices to either scare one out of a position or whether they are accumulating shares for a hidden buy order.
Bulletin boards can be a good place for sniffing out short term sentiments towards a share, particularly illiquid ones. Industry newsletters are also a useful source of information with regard to sector plays. For example, I find it useful to be aware of global demand for certain goods going forward, such as copper.
Spread Betting Trading Centre: Do you use stop-loss orders, why? Do you use any methods to place them?
Steve Brown: I always use guaranteed stop losses. Experience has taught me that despite the initial extra cost involved, when it comes to market crash time one can always walk away with some initial capital to come back and fight another day. I tend to place my stop loss orders roughly 30% away from the opening price and over time these orders will be walked up to reduce my margin requirement the more I travel into profit.
Spread Betting Trading Centre: How important is research for you and where do you get your information from?
Steve Brown: Research is paramount. As a small time individual the markets are speculative enough without wandering in and chucking a dart at share indexes. Industry newsletters, trade and industry websites, foreign newspapers and the sentiment barometer of bulletin boards all go into the mix before making a decision to open a position. Outside of this I find basic technical analysis extremely useful and usually reliably accurate, for example ADVFN's charting data which I use to monitor volume data, moving averages and the relative strength index of a share.
Page 1 - How I started Spread Betting Page 2 - Don't forget the Spread Betting Stop Losses Page 3 - I've made a few Spread Bet mistakes Page 4 - Some words of Spread Betting wisdom
