TradingBlog

Trading shares/stocks/options or spread bet, depends on your experience and available time.

If you are trading in The States, then market data have to be downloaded the next day as the markets only close at 9.00 pm UK time and update overnight.

For the UK, look at the FTSE100 index (250 and 350), for the US the DJIA index etc. This will provide a view of the overall market, strength, weakness, support, confrontation etc.

All shares and stocks are separated and sub divided into different industry and market sectors. Analyze every industry sector chart, for strength and weakness, as well as support and resistance. Do not buy shares or stocks in a sector of the market which is particularly weak or selling short in a strong sector. Naturally, there is no assurance that any share you desire within a sector which is performing well will guarantee it will follow the trend, but it is a rational supposition to make as a start.

Accepting and identifying industry and market sectors can be scandalously difficult. Having downloaded the end of day data, check all charts. As always, look for trends, volume, support and resistance, breakouts from a channel, turning points and candle patterns. Identify a list of possible prospects, compare them with their sector, see whether they were in a good sector or not, and how they were performing relative to the sector.

It is important checking on any share or stock that you are considering as to details of any directors who have bought or sold shares recently. Buy a share one day before the date then and be entitled to the dividend, but if you buy on the day you will not be entitled. There is a three day window between the ex-dividend date and the date of record.

On the broader front, there are four clear periods to the economic cycle-full recession, early recovery, full recovery and early recession. The markets tend to lead the economic cycle. In early recovery industrial, basic industry and energy sectors tend to lead, in full recovery staples and service sectors tend to lead, in early recession utilities and finance sector stocks tend to lead, and finally in full recession cyclical and technology stocks tend to lead the way.

Pay attention to the announcements on interest rates etc. Be rational rather than trying to acquire some deep knowledge of facts and figures that only economists comprehend. After all, if they know anything of value they would have retired long ago. Trading and investing is hard work and is about making money – not losing it!