Trading course The Twowayspreads ‘Trading course’ programme is a free six week course that enables you to build your spread betting and CFD trading confidence gradually and at your own pace.
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Spread Betting Introduction to spread betting
Economics and Fundamentals Using an Economic Calendar
Technical Analysis Moving Averages
Chart Patterns Introduction to Chart Patterns
Candlesticks Introduction to Candlesticks
Risk Management Using Stop loss www.twowayspreads.com
What is Spread Betting? Financial Spread Betting is a way of betting on the price movement of thousands of financial markets including shares, indices, forex, commodities, bonds and interest rates. Financial Spread Betting allows you to potentially profit from both rising and falling markets, placing trades over the phone and online. If you “go long” (buy), your profits will rise in line with an increase in the price. If you “go short” (sell), your profits will rise in line with a decrease in the price. Similarly, if you “go short” and the price rises, losses can occur. Losses however can be controlled with the use of a “Stop Loss”. Since you are betting on the outcome, you never take physical ownership of any position. All profits are therefore free from UK capital gains tax and Stamp Duty. Please note, *tax treatment depends on the individual circumstances of each client and may be subject to change in the future. Only a small deposit is required in order to place a trade. This is typically between 1% and 10% of the trade value. This gives you the option to buy or sell larger positions than the capital on your account. This potential for profits, or losses, can therefore be significantly higher than in traditional trading.
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Features 1. 2. 3. 4. 5. 6. 7. 8. 9.
Go Long or Short No Commission No Stamp Duty* No Capital Gains Tax* Instant Trading Bet in Small Sizes Hedging 24 hour Dealing Wide Range of Markets 10. Leverage
Spread Betting
Using an Economic Calendar
Be aware of economic announcements (see Risk Management wk 6). Can lead to an increase in market volatility and changes in trends. KEY Currency: Country of data release. Impact: Perceived degree of impact on the markets. High Impact data to be treated with extreme caution Detail: More information and analysis Actual: Number announced Forecast: Number expected Previous: Last Number announced
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Economics & Fundamentals
Moving Averages Moving Averages (MA) show the average value of an instrument’s price over a period of time The longer the time span, the less sensitive the moving average to price changes Moving averages are used to emphasise the direction of a trend and smooth out price and volume fluctuations (“noise”).
Strategy Use Crossovers to show trend changes. As the MAs cross each other they signal changes in trend directions. See chart above.
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Versions Simple MA (SMA) Exponential MA (EMA) 20 day 30 day 50 day 100 day 200 day etc
Tips Alerts can be set from the Twowayspreads charts, so when MAs crossover, you can set the platform to receive an instant email alert.
Technical Analysis
Patterns repeat themselves, which is why many traders and investors use chart patterns to help support their trading analysis. In this section of our trading course, we will consider the most common chart patterns and how they can be used.
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Chart Patterns
SYMMETRICAL TRIANGLE IN AN UPTREND (BULLISH)
SYMMETRICAL TRIANGLE IN A DOWNTREND (BEARISH)
Characterised as areas of indecision. Attempts to push higher are quickly met by selling, while dips are seen as bargains. Each new lower top and higher bottom becomes more shallow than the last Eventually, prices explode out of this formation, typically in the direction of the original trend
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Chart Patterns
The concept of Candlesticks is over 400 years old. It is one of the oldest trading arts in the world. Candlesticks demonstrate price action and can measure emotion. They can accurately demonstrate the fear and greed in the market. However, before we get too technical, we must understand the basics of how they are comprised.
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Candlesticks
ď ą A candlestick shows us the movement of prices for a specific period of time, perhaps looking at a daily chart or 15 minute chart (next slide). It shows the highest price for the period, the lowest price, the opening and finally the closing price. upper shadow
upper shadow
HIGH
HIGH
CLOSE
OPEN
OPEN
CLOSE LOW
LOW lower shadow
lower shadow
ď ą These candlesticks give an accurate picture of the movement of prices within that time period. The make-up of the candlestick can then give us a clue as to the emotion in the market. It can show us who is in control, the bulls (those expecting prices to rise) or the bears (those expecting prices to fall).
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Candlesticks
Using a Stop Loss What is a Stop Loss? • A stop loss (SL) will automatically close a trade if the price moves against you • Traders use them to limit and reduce risk • They are recommended by many trading experts •Please note your stop is not guaranteed unless you specifically select your stop loss to be guaranteed.
Relative to the market Research where your SL should be, not a number out of thin air. Consider current Support and Resistance
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In the right place Why use a stop? If your stop gets hit, it is because you expect the price to then get worse not better!
Good till near!!! Don’t move your stop further away. Choose your Stop Loss and stick with it. The first cut is the cheapest!
Risk Management
6 week trading schedule Week 1
Introduction to spread betting Using an Economic Calendar Moving Averages Introduction to Chart Patterns Introduction to Candlesticks Using a Stop loss
Week 4
Bet Types (Rolling etc.) Unemployment Moving Average Convergence Head & Shoulders Engulfing Margins
Week 2
Trade Examples Growth Relative Strength Pennants Bullish & Bearish Trade Sizing (£1 pp)
Week 5
Orders Interest Rates Bollinger Bands Double Top Hanging Man Diversification
Week 3
Markets Inflation Stochastic Wedge Hammer 1% risk
Week 6
Spreads Trade and Sales Parabolic Stop and Reverse Triangles Doji Volatility
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To access the future modules of our trading course, you will need to open a live trading account with Twowayspreads... Benefits include: TwowayRewards Loyalty Scheme Free advanced charting Free analytical tools Free FX Squawk Free Trade Ideas (provided by Twowaymarkets) www.twowayspreads.com
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