RE: Top Slicing8 Jul 2018 21:53
Hi Spencer
You won't be able to day trade KOOV, the spread is too large, it has to move 2.63% + your trading costs before you're in profit. You might get this movement tomorrow but thats the exception and not the rule. My buy and sell costs are £13, if my stake is £10,000, that's 0.13%, so in total it has to rise by 2.76%. Like everyone else has said, lump in KOOV and wait for the fireworks to happen.
That said, there are 15-20 or so shares that have a tiny spreads, no stamp duty, and volatile enough so the movement doesn't need to be that big to be in profit.
What system works well for me is 1 minute candle chart, set moving average line to 10 candle. When an adjacent candle opens higher than the close of the previous candle, I buy, you could wait for the candle to cross the 10 candle moving average line, it's confirmation of the movement/momentum. I hold until the open of the following candle, opens below the close of the previous candle and gets confirmed by crossing the 10 candle moving average line. It works 15 times out of 20 trades. If the movement doesn't work out, you can usually get away with with breaking even, unless the following candle falls off a cliff! Generally the market moves sideways, ebbing or flowing with the adjacent candle within the range of the previous candle, when there is a gap up or a gap down the following next 20 minutes will show movement. If you think about it, the adjacent candle has only gaped up because people are massively buying or it has gaped down because people are dumping.
If the adjacent candle opens significantly higher than the close of the previous candle, it demonstrates a strong positive momentum and if this momentum can continue I stay in. I try making 1.2% per day sometimes over 6 x 0.2% trades. Sometimes it takes 30 minutes, some times I'm looking at screens all day, waiting for a signal and nothing. Sometimes I've made 1.2% in a company, that has fallen 3.7% on the day (PFC the other week) as it rarely falls in a straight line, it rallies, creating a chart with lower lows as the time ticks. NOTE if you achieve 1% per day and you reinvest for 260 trading days (MON to FRI for 1 year) you will have made 1266% with the compounding effect and not just 260% @1% per day (google compounding).
Sometimes, it keeps on going up, then I let other signals take over, such as MACD, Ichimoku, set my candles to 5 minutes, with a 20 candle moving average line, this way I won't sell on false downward signals, this helps to max out on profits. NOTE if the moving average line is rising, it's easier to trade than if the moving average line is falling as in PFC the other week.
The charts are populated by buys and sells, so you're just following the money in or out. To be honest, if you buy something that's cheap enough, BOO @ 170p, IQE @ 96p, PFC @ 450p, KOOV @ 24p it isn't worth risking trading and missing the jump. I just buy, set 5 min candle, 20 candle moving average and keep an eye on it.
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