Comparison with Live trading

Share Select Trading Styles:

"Live" Trade Suggestions Vs Static Trade Suggestions

Today's focus is on comparing the trading styles applied to Share Select's "live" CFD Select and Option Select trade suggestions and the suggestions detailed in the Trade Suggestions section of the Daily Trader members area.

A Recent Example: Shorting Boral Limited (BLD):

On Thursday 26th October, a "live" email and sms alert was activated for CFD Select and Option Select subscribers suggesting to short Boral Limited (BLD). It was suggested that CFD traders should sell to open the CFD position and option traders should buy long puts. The techncial and fundamental analysis for the BLD trade suggestion was also detailed in the Daily Trade picks of the Daily Trader report that evening.

Interestingly the "live" trade suggestion was handsomely rewarded whilst the overnight static suggestion did not trigger. Both trading styles were correct.

Static Trading Rules:

As is said about politics, an hour can be a long time. The same is applicable to short term trading. Overnight can produce a very different picture next day.

subscribers would not have entered the suggestion as the share price gapped down on opening the following morning.

While this was already mentioned in the 'News and Views' section of the Daily Trader on the 27th October already, we think it's important that we highlight to our 'Daily Trader' subscribers what we mean by the term gapped down, and therefore why you should have not have entered the trade.

Example

As per our rules the following trade would not have been entered.

In the above chart you can see that BLD closed at $7.31 on the 26th and opened at $6.90, we say that BLD gapped down $0.41 the next day. The area that BLD gapped is highlighted by the aqua rectangle. While the direction of the trade was correct you would not have entered this trade because the gap itself was 5.6%.

While the BLD example is extreme, that is, the distance of the gap, as a trader you shouldn't get into a trade that has gapped even slightly. While there is no hard and fast rule, generally a gap of even 1-2% might be considered too much.

"As a trader you should wait for the trade to come to you;
Always apply patience and wait for ones that do."