Wednesday, 10 April 2013

Trading Academy - Episode 4: Stocks and Shares

In the 4th week the contestants start trading individual stocks; focusing on the pairs trading technique (i.e. long one stock, short another - thereby holding a beta neutral position which gains or loses depending on the stock specific factors). For some the task of picking individual stocks becomes a bit much - with the universe of possible stocks in the thousands; whereas previously they had only a handful of instruments to trade. This episode probably mostly helps on teaching the value of focus; it's also important for emphasising the importance of developing a trading style and a trading plan. Trading strategies need to be adaptable, they need to be profitable of course, but they also need to be sustainable in that they suit the philosophy and beliefs of the trader. Watch and learn! See also: Episode 1 (meet the candidates)Episode 2 (FTSE Fundamentals), Episode 3 (Global Indices) and Million Dollar Traders (a similar apprentice-style trading competition where the aim is to train a successful hedge fund manager). Be sure to add your comments below.

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