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 unsuccessful then rethink your present trade.

ABCAM, a share we trade long, has, to my mind, provided three 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 better frame of mind as to the risks of trading this company.

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