The Online Trading Cookbook

The Online Trading Cookbook is a unique resource for busy online traders of all levels. Featuring a variety of short- and long-term trading strategies, the book addresses the need amongst the growing number of those trading and investing from home for solid, low-risk trading strategies which they can incorporate into a busy lifestyle, and which will allow them to balance successful trades with a 9-5 job. Written by a trader and investor of great experience once described as the 'UK's best-known internet trader' and author of numerous books on the subject the book also carries the authority which anxious traders seek in uncertain times (as witness the recent success of titles detailing the strategies of proven investing experts, such as Warren Buffett). The book caters for all levels of home trader, and also contains both short-term and long-term strategies, based on trader preference. The core of the book is supplemented by extremely useful advice on the best trading tools, websites and brokers, the different markets available to trade, tips on risk- and money-management and a final chapter featuring a selection of trading success stories.

Alpesh Patel launched asset management company Praefinium Partners in 2004. He is a former Visiting Fellow in Business and Industry at Corpus Christi College, Oxford University. He has written 13 books on trading, translated into 8 languages. For Bloomberg TV he co-presented shows for three years as their in-house online trading specialist. He has had over 200 columns on trading published in the Financial Times through his Diary of an Internet Trader column. He is the founder of investingbetter.com which is an online trading education company and has his own investment software in partnership with Sharescope.

Alpesh has lectured on trading from Beijing and San Francisco to Guatemala and from Spain to India, Singapore and Hong Kong. Alpesh is also the founder of TraderMindMarkets.com, an online trading portal and alpeshpatel.com offering FX education as well as eglobaltrades.com, an online FX broker. He writes the TheTraderFather.com blog.

Paresh Kiri has vast experience as a floor trader on the world’s second largest derivatives exchange LIFFE and as a Portfolio Manager. He is an FSA regulated investment manager.

Starting his career on the LIFFE floor in 1993, Paresh was one of the first traders to embrace screen trading, through the LIFFE online trading platform APT (Automated Pit Trading). Paresh was one of the founders of Kyte Securities. Since leaving Eden Financial in 1999, Paresh has been managing private client and institutional money, and developing very specific operational services going back to Kyte Group to assist the development of an Index Options Desk, and seeking ways of bringing the strategies he developed to the wider public audience by structuring managed accounts services using on-line trading platforms. Paresh regularly coaches and holds private seminars on trading the markets. He sits on the Advisory Board of Sterling Group.

Preface ix

Acknowledgements xiii

About the Authors xv

Introduction 1

PART I APERITIF

Recipe 1 Uncle’s Favourite 11

Difficulty Level: Beginner

Recipe 2 What Good Dishes Taste Like – The Recipe for Trading Success 21

Difficulty Level: Beginner

Recipe 3 Trend Lines and Channelling: Mind the Bumps 31

Difficulty Level: Beginner

Recipe 4 Japanese as Easy as Sushi: Exotic but not Complicated 37

Difficulty Level: Beginner

Recipe 5 Moving Averages: Decisions Decisions 43

Difficulty Level: Beginner

Recipe 6 Breakfast at 8 49

Difficulty Level: Beginner

Recipe 7 Let’s Get a Takeaway! 55

Difficulty Level: Beginner

PART II HORS D’OEUVRES

Recipe 8 MACD, MA and Stochastic – Mixing Cocktails 69

Difficulty Level: Beginner/Intermediate

Recipe 9 The Breakout 75

Difficulty Level: Intermediate

PART III AMUSE-BOUCHE

Recipe 10 Natural Diet: Don’t Forget Your Roughage 85

Difficulty Level: Intermediate

PART IV ENTREMET

Recipe 11 MACD (Mac-D) and Friends 101