Active Trader speakers give their picks of the City PM conference
MORE than 700 people turned up last week to the inaugural City PM Active Trader event at the Grange Tower Bridge Hotel to listen to our assembled panels of experts give their wisdom on everything from bearish engulfing candlestick patterns to using twitter for trading.
We asked some of the Active Trader panelists for their pick of the best questions from the audience, and their responses.
DAVID JONES
IG Markets
Q We now have so much technological information at our fingertips and when it comes to analysis tools there are hundreds of different ways we can chart markets – do you think this has changed the way that your clients trade?
A Technological changes in the last 10 years or so have meant that retail traders have much more of a level playing field than ever before. I think one of the drawbacks is the risk of “analysis paralysis” – there is so much information you can throw at a price chart that you can end up confused and not see the wood for the trees. Although technology has moved on in leaps and bounds in the last decade, markets are the same as they were a century ago. They still go up, down and sideways. So I still think the cornerstone of any approach to markets has to be the tried and tested ideas of following a trend and keeping risk at a manageable level relative to the size of your account – we can waste too much time looking for a magic system and ignore what the market is actually telling us.
ANGUS CAMPBELL
Capital Spreads
Q One of my points in my presentation was how traders need to be adaptable for different market conditions and at the end I was asked what I meant by being adaptable.
A Most strategies tend to work in trending markets and since markets only trend for roughly 30 per cent of the time, traders should always have a strategy for when the markets are also very range-bound. Their normal strategy may not work in a range-bound market and therefore traders either need to stop trading or look at their risk-reward ratio and trade size so that they can tweak things. After all, the markets are continually changing and adapting and so investors need to be able to know when a strategy isn’t working and it’s time to make a change or try something new.
JOSHUA RAYMOND
City Index
Q What is your take on following the strategies of others through social trading?
A I am a fan of giving clients the option to do this and it has its merits, particularly if you can follow someone with a strong track record of performance.
The one negative I would point out is that for me trading is a very personal experience. If I analyse a trade scenario, place the trade and net a profit, for me that’s something I have achieved and I am proud of. By following someone else’s trades it can take that personal experience away from trading. However, I believe in giving clients the option so that they can chose to employ social trading or trade their own strategies.