Before you trade try this exercise

Viewing the MACD Histogram for the previous year is a good idea before you trade. Have fun with it and look to see where you would have traded over the last year and the subsequent results. Usually you will find 2 to 4 trade points regardless of whether it is a share you are trading long or trading short.

If you would have been successful at your chosen trade points then great, go ahead and trade now. However, if you would have been unsuccessful then rethink your present trade.

ABCAM, a share we trade long, has, to my mind, provided 3 trade points over the last year. The first on 28/1/2014 would have provided a small upside but if you were not quick to sell a few days later on 3/2/2014 you would have stopped out.

Screenshot 2014-05-31 08.27.58

The second trade point would have been very wrong on 26/2/2014. That also would have resulted in a stop a couple of days later with almost no notice.

The third trade point on 23/5/2014 has already shown a small upside.

However, running through this exercise puts you in a clear frame of mind as to the risks of trading this company.

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s