Simple Trading – Creating Opportunities

I recently explained a simple trading rule to remember to my spread betting students.

Sometimes when you are trading, the daily charts may seem flat and untradeable.

There looks like there is nothing going on and opportunities seem scarce.

When this happens, don’t be afraid to drop down to using the 4 hour and 1 hour charts and even the 10 minute candles

You need to be able adapt your trading to make money consistently over time.

Let’s look at the chart beneath as our first example

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You can see that the price looks pretty sideways on the daily chart. There appears to be little in the way of trading opportunities.

But if we drop the chart down to 10 minute candles let’s see what happens.

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We have now created much more volatility; this in turn gives us more opportunities to trade.

Now this approach won’t work if you are a lazy trader. And that’s fine if you do not want to be at your desk throughout the day. But for those that want to be a more active trader and building their banks quickly, then this approach can be perfect.

Simple Trading

If we add an exponential moving average to the chart and trade the crossovers, we can create a trading strategy that gives us our entry and exit points.

Look at the chart now. You can see that over the last couple of days there have been many opportunities available.

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In fact if you had traded each crossover signal from 8am – 8pm, you’d have netted some good points profit with very little in the way of risk.

Considering that the daily chart looked untradeable, you can see what happens if you change your trading approach to suit the chart.

You Can Diversify

Don’t get stuck in the rut of trading the same strategy that only works in some scenarios.

Diversify your charts and strategies and you’ll find you have far greater success overall.

Learn the basics well and you’ll find spread betting is rather simple.

Over time you’ll come to know what strategy works best on what time frame and more importantly what works best for your personal style of trading.