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SB_Beginner
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Post subject: A new spread betting strategy Posted: Wed Nov 24, 2010 4:47 pm |
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Joined: Wed Nov 03, 2010 9:10 pm Posts: 147
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I thought it might be fun if we try and develop a new spread betting strategy together. You can add whatever parameters to the strategy you like as long as they don't conflict with anyone else previous entries.
I'll start the strategy with, Only buy when price is above 200 day EMA (Exponential moving average) Only sell when price is below 200 day EMA
Ok who wants to add the next parameter?
_________________ May the markets be with you! Harry, The Spread betting beginner
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edswifa
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Post subject: Re: A new spread betting strategy Posted: Wed Nov 24, 2010 8:38 pm |
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Joined: Wed Nov 24, 2010 8:33 pm Posts: 15
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The 200 day ema should be pointing in the direction of your intended trade. i.e up for a long trade and down for a short trade.
cheers Andrew
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offthelip
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Post subject: Re: A new spread betting strategy Posted: Wed Nov 24, 2010 9:10 pm |
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Joined: Fri Nov 05, 2010 8:31 am Posts: 72
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Only buy if the Volume and the price have decreased on two sucessive days " Off the lip"
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SB_Beginner
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Post subject: Re: A new spread betting strategy Posted: Thu Nov 25, 2010 9:53 am |
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Joined: Wed Nov 03, 2010 9:10 pm Posts: 147
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Thanks to Andrew and Off the lip for the replies. Both good suggestions. I have to say I have no experience when it comes to volume so excuse me if I come across a little dense.
So we would buy if the volume and price have both decreased for two successive days. What would the volume have to do for a sell? I would assume we would say the price has increased for two successive days but would volume also increase? Sorry if it's a stupid question.
The overall aim for this forum topic is to be educational, I know I'll be learning something new since we will be using volume in the strategy.
Again thanks for the replies, It's appreciated as always.
_________________ May the markets be with you! Harry, The Spread betting beginner
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SpreadBettingTrader
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Post subject: Re: A new spread betting strategy Posted: Thu Nov 25, 2010 10:20 am |
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Joined: Fri Nov 19, 2010 7:24 pm Posts: 91
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What about only buying shares whose RSI(14) is in oversold territory <30. This generally means there is potential for an upturn in price once selling stops.
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SB_Beginner
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Post subject: Re: A new spread betting strategy Posted: Thu Nov 25, 2010 10:58 am |
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Joined: Wed Nov 03, 2010 9:10 pm Posts: 147
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Ok this is good. Thanks to all for participating.
So we have, Buy criteria:
Price > 200 day EMA 200 day EMA rising RSI(14) < 30 (oversold) Volume decreased for two successive days Price decreased for two successive days
Sell criteria: Price < 200 day EMA 200 day EMA declining RSI(14) > 70 (overbought) Volume increased for two successive days??? Price increased for two successive days
I've added the ??? to the sell criteria for volume as I'm not sure if this is correct. Maybe someone with more knowledge than me help me out here.
_________________ May the markets be with you! Harry, The Spread betting beginner
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offthelip
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Post subject: Re: A new spread betting strategy Posted: Thu Nov 25, 2010 11:24 am |
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Joined: Fri Nov 05, 2010 8:31 am Posts: 72
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My intention for the condition was only for the buy side, I am not sure about the sell side, but if anything it should be volume DECREASING! the idea is that there is fading interest in the direction that the price is currently moving, e.g. when it moves down there are fewer sellers entering the market, any panic selling is over. This might well work for going up, so lets change the condition to just : Volume decreasing on two successive days for buying and selling
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offthelip
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Post subject: Re: A new spread betting strategy Posted: Thu Nov 25, 2010 11:29 am |
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Joined: Fri Nov 05, 2010 8:31 am Posts: 72
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Are you planning to back test this strategy when it is finalised?? I ahve written a whole lot of back testing software, so if the conditions are reasonably easy to program, I am willing to run some back tests on the strategy!!
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lotontech
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Post subject: Re: A new spread betting strategy Posted: Thu Nov 25, 2010 1:55 pm |
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Joined: Thu Nov 25, 2010 1:39 pm Posts: 15
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I'm reluctant to participate directly as I already have a strategy defined in my book, but having devised that strategy (and others) I can make some constructive observations: 1) When you specify criteria for 'selling' you need to clarify whether you mean "close an existing long position" or "go short" or both. 2) A complete strategy requires more than just buying and selling criteria. How much will you stake (i.e. position sizing)? Will you increase (pyramid) or decrease your stakes according to some criteria? How will you know when the strategy is working, and not? Will you stick with it (or give up) if it draws down more than 50%? Will there be a limit on how many positions you will hold? What about risk:reward ratio, and stop placement (if any)? I hope this is constructive, as too many "trading systems" are merely lists of buying and selling criteria with little or no attention paid to money- and risk- management. Tony Loton (Position Trader) www.lotontech.com/positiontrading
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SB_Beginner
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Post subject: Re: A new spread betting strategy Posted: Thu Nov 25, 2010 2:43 pm |
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Joined: Wed Nov 03, 2010 9:10 pm Posts: 147
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Thanks to Tony for joining the discussion, and thanks for the constructive feedback. I'll come back to that in a minute. I want to go back a few steps to offthelips posts. So we would want volume to Decrease for both buying and selling. (Told you I was dense about volume, still we live and learn, hence the reason for this forum topic). When we complete the strategy if you want to back test it feel free. I've not done much back testing myself so I may take a look at trying to do it as well. I would be interesting to compare results to see how well I did with my back testing. Anyway I think we are getting ahead of ourselves. So we have, Buy criteria: Price > 200 day EMA 200 day EMA rising RSI(14) < 30 (oversold) Volume decreased for two successive days Price decreased for two successive days Sell criteria: Price < 200 day EMA 200 day EMA declining RSI(14) > 70 (overbought) Volume Decreasing for two successive days??? Price increased for two successive days Coming back to Tonys comments. I agree with all the points you make. Basically if we use the What's required to develop a spread betting strategy? forum topic as a guide we need to consider: • Setup • Entry triggers • Stop placement • % of funds to risk • Position size • When to move stops • When to exit the trade • Length of the trade • Trade parameters to log At the moment I think we are just getting to grips with the setup for our trades. The rest will come after we are happy with the setup. Thanks to everyone for participating, it's turning out to be an interesting exercise. Hopefully others will find it of some use.
_________________ May the markets be with you! Harry, The Spread betting beginner
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