SEPARATING YOUR TRADING ACCOUNTS TO AVOID LOST OPPORTUNITIES

SEPARATING YOUR TRADING ACCOUNTS TO AVOID LOST OPPORTUNITIES - TIP 13

Mark Austin Trading

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Dear Stephen,

SEPARATING YOUR TRADING ACCOUNTS TO AVOID LOST OPPORTUNITIES

Its always a good idea to separate different styles of trading from different trading accounts. So for your long term trading/swing trading you will have one account, where you are essentially positioning for an above average longer-term move and then in another account you will focus just on short term moves which may be held for a few minutes up to a few hours.

I separated my own trading accounts from different styles of trading a long time ago as I found if I had swing positions running in my sole trading account then this would distract me from shorter term opportunities. Each day is different in the market and if you are patient there are always easy trades to lock into; however if you are being distracted by longer term swing trades you may miss these. Its important as a short-term trader that you start the day fresh with a clear plan of attack. If you are mixing different trading styles and you have open positions running, this may well hinder you from making a good decision, possibly distract you; or if your longer-term position is underwater (in a loss) then you may fear taking out a new position! This can be a very costly exercise. Remember markets only put in their big moves 20% of the time. For the other 80% of the time its important to capitalise on the shorter-term range-bound action. A case in point would be current market conditions. For the MARK FTSE SERVICE its been a case of shorting rallies above 5900 for numerous weeks now and although the market action has been boring this has still proven to be a very profitable exercise. If a trader is only focusing on the market providing one big move then he/she will be missing many opportunities.

By separating your different styles of trading you will also be able to monitor and evaluate which style is working the best for you.

Mass trader psychology always focuses on the ''one big move'' as a large move is always associated with lots of profit potential, when in reality collecting smaller moves over a period of time can be far more profitable and less risky. We do longer-term (swing trades) and shorter-term trading at MARK AUSTIN TRADING and I believe both have their place but I also believe they should be clearly separated in your trading business.

Happy trading!

Mark Austin
mark@markaustintrading.com
www.markaustintrading.com

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Mark's FTSE trading service is designed for educational purposes only. There is a risk of loss in all trading. Spread Betting carries significant risk and should only be undertaken by those who can afford to lose some or all of their investment. Past performance is not indicative of future results. Before investing, or if in doubt about the suitability of an investment please seek independent financial advice. Mark's FTSE trading service is authorised under an arrangement with t1ps.com Ltd, which is authorised and regulated by the Financial Services Authority and can be contacted at 3rd Floor, 3 London Wall Buildings, London EC2M 5SY.