Requirements

1) Existing downtrend required so triangle can serve as pause before continuation lower. Uptrend required so pattern
can serve as reversal. Pattern serves to build up selling pressure. Not valid in sideways trend.
2) Volume sees overall decline as pattern develops, but should pop on breakdown.
3) Pattern can take from a few weeks to build, but can also take many months. Average 1-3 months.
4) Breakdown should occur between ½ and ¾ of way through pattern. Extending trendlines to join (apex) allows
estimate of duration of triangle and expected breakdown area. If price action moves beyond ¾, pattern becomes
suspect. Breakdown before ½ normally premature.
5) Breakdown normally sees pull-back to prior support, which should then revert to resistance.
6) When using parallel trendline for target measurement, target line should end in-line with apex.

Caveat

Individual technical indicators should never be relied upon in isolation for trading decisions, however strong the signal may be. Ultimately they are one of many indicators, which may, in the majority, be pointing the other way. Always use look at other indicators (moving averages, trendlines, price, price patterns, volume) to assist in the final trading decision. Lastly, the current trend of a share should always be respected – pre-empting a change can prove costly.

Firstly, it offers you a wider range of markets to invest in from commodities and currencies, to shares and equities and unlike conventional trading, gives you the option to invest in the outcome of a stock rather than simply growth or reduction.

For example, as opposed to conventional share trading you could potentially make money whether the share price moves up or down. An example of this is putting £10 a point on the house prices going short; meaning that you have bet on the house prices going down. If the market does indeed go down you make £10 for every Point the house prices drop, however you subsequently lose £10 for every point the house prices rise. You can also use stop-losses on your trades so that if the movement of your position drops or rises more than you would like, it closes the trade. This means you can tailor your trade to your specific requirements.

Here is another example of a trade from start to finish:

-         Vodafone are at 100p a share and you anticipate it rising to 120p a share

-         You buy £10 a point going long

-         You place a 10 point stop-loss and a 20 point limit

-         This means if the stock drops to 90p a share it stops the trade and you only lose £100. And if the stock reaches 120p a share, which is what you anticipated, it stops the trade and you make £200.

-         The stock closes at 117p a share which means you have a running profit of £170

-         Despite the trade dropping to 114p when the market opens the following morning, it rises to 119p by midday, at which point you decide to close the trade.

-         Your profit from this trade is £190

This type of trading has become popular because people have more time to contemplate and perfect their trade in order to try and get the greatest return. However, with big returns also presents the possibility of big losses as seen in the example above; although the stock increased, but not by the amount you previously anticipated, you still made a profit.

Another benefit of spread betting over traditional stock trading is that UK residents are free of Capital Gains and Income tax as well as being exempt from Stamp Duty.  Also with spread betting, you do not pay commission or fees when you open and close trades and an additional advantage of trading with Accendo Markets is that we do not charge for holding an account with us, meaning you are pressured into placing trades just to avoid a ‘inactivity charge’.

As a derivate product, spread betting allows you to trade on the margin; this means that you only need a percentage of your investment in your account before making the trade. An example of this is;

-         If you buy 600 shares of Barclays at 900p you pay £5,400.

-         The spread betting equivalent to this trade is buying £6 a point at 900, with the same exposure (investment) of £5,400.

-         However, with Accendo Markets, you do not need to have that £5,400 in your account in order to make that trade, you only require a percentage of that amount e.g. 3% which is £162.

Ultimately this means that due to only needing £162 for that trade, you have £5,238 to put towards further trades.

At Accendo Markets we want you to enjoy your spread betting experience, and of course, we want to limit the risk of your losing money. Therefore we will have a mandatory/automatic stop-loss attached to every trade you open, which is designed to limit the amount you lose, should a trade begin to lose you money.

Finally, Accendo Markets, unlike other financial organizations, allows you to trade using your own preferred currency, so as to avoid high currency exchange costs.

It should be noted that although spread betting gives you the option to make more money than conventional trading, it also carries a higher risk for loss, consequently you should only trade with funds you are prepared to lose.

Also, by using margin trading, despite freeing up more space in your capital, you are also exposed to greater losses. With regards to the above case concerning Barclays, despite making an initial £162 deposit, you could lose £5,400 should Barclays go bust overnight.