Ep 51 - Breakout Strategies with Jason Needham
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Jason Needham - Breakout Strategies
After literally no fanfare for Episode 50 last week (despite an extensive letter writing campaign by our fan) we roll, unsurprisingly, straight into Episode 51. Jason Needham of tradingbases.co.uk talks Breakout Strategies with us. He trades shares, looking for breakouts from consolidating price action. By trading breakouts from ranging, consolidated price, he can place very specific stop losses and is able to run his winners. All are key parts of a solid technical trading strategy! Even if you don’t trade shares, this episode has some top tips on general risk management principles. Good Risk Management is one of Jason’s key messages.
Jason Needham’s technical breakout strategy is specific to equities, but we ask if it can be applied to other markets as well. He uses some fundamental screening methods to make sure he is looking at momentum stocks. As such, it would need significant back testing to see if his breakout strategies could work for trading Forex. Nevertheless, Tom commits to loading up his wheezing back testing software and putting Jason’s breakout strategy through it’s paces. Stand by for the results in Twenty Neverteen.
If you want to see a bit more from Jason Needham then follow him on Twitter @stealthsurf. Jason Needham runs tradingbases.co.uk where he has a large video tutorial library. He also runs daily explainer videos on live trades. You can learn about all his breakout strategies on his on his site.
We have kicked off the video learning part of the Traders Support Club this week. Top of the list of things to consider is the time frame in which we are going to trade. It is a truism of trading that the shorter the timeframe you trade on, the more likely you are to lose money. I have no idea if that truism is true (!) but lots of people seem to believe it. Trading over a longer time frame also leaves more time for jobs, businesses, families and building fly fishing lure’s in your garden shed.
Traders Support Club recommend starting out with Position or Swing trading. Then moving to Day Trading or Scalping if desirable and advisable. Position Trading means holding trades anything from 3 weeks to years. Swing Trading from 2 days to 3 weeks, Day Trading 1 or 2 days and Scalping can be a matter of seconds to a few hours. All very different skills, with vastly different success rates and potential rewards. The time horizon for our trading is one of the first questions we will need to settle. We need to get this sorted before creating our mathematically-proven technical trading Edges during the course. (He said, confidently).
If you want to join us on our journey with the Traders Support Club then click on the following link. You will receive an exclusive Two Blokes Trading discount: Traders Support Club.
If you sign up through Two Blokes Trading we will make sure that they treat you even better than they treat all of their other clients! And we will be able to hang out together in their Live Online Trading Room, or L.O.T.R. (Not the Lord of the Rings room.... Tom…)
CFD or Spread Betting - Taxes (zzz)
In the episode we also discussed the reasons that we trade with XTB using CFDs rather than trading with a spread betting provider. The answer is a bit complex, but if you wan to see the arguments, then have a read of this article. Essentially, unless you have quite a large account or are very profitable, then you may not have to pay Capital Gains Tax anyway, so you can take advantage of using an STP broker that doesn't trade against - like XTB!
The political risk that has been driving the markets has mostly disappeared for now. So, barring any more Ransomware attacks disabling the world economy Mr Robot style, the markets should be trading on economic factors more than anything. But, keep trading safely and pay attention to the Risk Management tips from Jason Needham. You never know what is around the corner!
Please don’t forget to subscribe to this podcast in iTunes or you podcast app and leave a rating and review. Thanks!
p.s. If you own a tin hat and want a copy of the tech crime book Tom mentioned, then pick up a copy of Future Crimes by Marc Goodwin.