Mark Shipman's Investment course

joe sod

Frequent Poster
Messages
718
I remember looking at his long list 6 months ago and he was long on gold, however he is still long on oil, usually gold and oil move in tandem, maybe he thinks the gold market will move sideways for a while, Is everything he is long on areas where he is actively buying or simply spread betting on
 
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wellray

Guest
I tracked Shipmans investments for a while having read the book and he was in Gold & oil very early on. Is it true that the annual cost of spreadbetting long term, i.e.initial bet + 4 rollovers, is 8% (before you make money)? I've just finished reading Michael Covell's book Trend Following and am itching to start. Any other novice spreadbettors out there? Any tips from experienced SBs?
 
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z106

Guest
I tracked Shipmans investments for a while having read the book and he was in Gold & oil very early on. Is it true that the annual cost of spreadbetting long term, i.e.initial bet + 4 rollovers, is 8% (before you make money)? I've just finished reading Michael Covell's book Trend Following and am itching to start. Any other novice spreadbettors out there? Any tips from experienced SBs?
Ya - i read covells alright.
Shipman would be different to covell in that he wouldn't have a purely mechanical exit.

The most enjoyabke one i read was "How i made 2 million dollars in the stock market".

It's one of the legendary ones of all time. Originally written back in teh 50's.

Another classic is "Reminiscens of a stock operator"
I have it - haven't started it yet though.

Malcolm pryors handbook to spreadbetting is very useful too.

You could also try 'Way of the turtle' by curtis faith - one of the original turtles.

Another great one is 'Taming the lion' by richard faleigh - from the dragons den.I went to a lecture of his recently. Very good.

If you want my advice - I've learned the hard way that without question, the most important thing in trading (be it spreadbetting or otherwise) is money management.
You can be right 99% of teh time but without proper money management,that 1% when you're wrong will wipe you out.

As a result you really need a sizeable pot to begin with.
i reckon unless you have minimum 30k, then not to bother because you'll only lose.
 
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jimbob1234

Guest
i wouldnt agree with the statement that you need 30k to start with at all. i started with 10k and turned it into 30k during last years bull market. (this year is a different story though :-(

www.igindex.co.uk is a the SB firm i use. lots of choices. i have read shipmans book as well as reminisces of a stock operator. the latter is a great book, so insightful when it comes to holding instead of taking profits during a bull market. im not so sure about shipman , yes its true that he was in oil very early but he was also in the nasdaq 100 until recently and thats down almost 20% from its top. why didnt he close this position when the MA turned down (as he says in his book). i have found his positions to be very flaky
 
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z106

Guest
i wouldnt agree with the statement that you need 30k to start with at all. i started with 10k and turned it into 30k during last years bull market. (this year is a different story though :-(

www.igindex.co.uk is a the SB firm i use. lots of choices. i have read shipmans book as well as reminisces of a stock operator. the latter is a great book, so insightful when it comes to holding instead of taking profits during a bull market. im not so sure about shipman , yes its true that he was in oil very early but he was also in the nasdaq 100 until recently and thats down almost 20% from its top. why didnt he close this position when the MA turned down (as he says in his book). i have found his positions to be very flaky
Ok - that';s very interesting.

But lets be real here.
Without question you were using very high leverage yes?

Like - that's a whopping 200% return you made there.

Buffet himself only makes around 20% a year.

Excessive leverage is basically bad money management.
If you get lucky then you get very lucky.
However - very easy to get wiped out using that strategy.
i.e. High risk - high reward.
High-risk can only last so long though.


Personally - in teh space of a few montsh I made a 1200% (yes- 1200%)return when my account was at its peak in teh space of a few months.
However - teh only reason I did that was because I was using HUGE leverage.
i.e. My money management was non-existant.

As a result- in one bad week last march I lost it all when teh commodities crumbled around paddys day.

The reality is you cannot enter many positions without taking on relatively high exposure.
Some more so than others.
E.g. If you wanna play heating oil,the minimum exposure you can have is €40k (at least it is with the spreadbetting company I use- I presume they are all fairly similar)

So - in that instance, if you only had,say, 10k to beigin with, straight awya you would have exposure of 4*leverage.
AND - you woudl have all your eggs in one basket !!

Obviously - as any trader knows youneed to have a few positions open at anyone time give that you willl lose on some bets.

So - this is an interesting debate in fact.

What do you think the minimum amount someone should have to play the markets ?

As for shipmans strategy, you are right - he was in the nadsaq.

However no trading system cna be - nor claims to be - right all teh time.
I went to his course.
Once he selects an asset he uses a 10% stop loss and remains in it until it is hit.

For teh record he also uses a max of 2-fold leverage.
And only risks 2% of his pot on anyone bet (As most successful traders do).

So on teh nasdaq bet that time, he only lost 2% of his pot i.e. cut his losses.

Those parameters he uses for money management are quite common.

I think it is next to impossible to play the markets using those parameters with an initial pot of only 10k.

That's why I'm saying someone really need around 30k if you want to maintain those parameters.
 
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jimbob1234

Guest
well the SB firm i use lets you bet .25 minimum of 1 cent on a stock, whereas most irish ones need a minimum of 1 euro. i dont bet on stocks unless the market is in an uptrend ( i have various ways of determining this). i start with .25 and add if it moves in the right direction. i dont open a lot of positions . if i get 200 profit then i raise my stop loss to always protect at least that ammount of profit. if it goes down then i make a calucated decision ( is the stock gone under 50 day MA, is volume high on the way down etc).

to be perfectly honest im still perfecting my money mgt as i too lost it all . im back in now and a lot more careful, emotionless and shrewd. at present i just have too small positions, short 1.25 on dow jones and .6 on japan nikiii. i have also learned that the ideal way to work is to keep adding continually to your account, not to just try and get one huge winner. either shipman lost a lot or made almost nothing in his nasdaq position, it depends on when he opened it. but he held on to it for quite some time, and it was down a lot more than 8% before he closed it. also he had the hang seng last year, it went up to 32000 points and he didnt close till it came back to25000. to me thats sloppy.
 
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jimbob1234

Guest
with igindex, minimum trade is .5 on heating oil , dont know how that compares to your company. i am determined to be a trader / speculator , whatever you want to call it. but im not goign to pay CGT, or commissions etc so SB is the way forward. i dont know a minimum ammount to use to play the markets but its possible with good picks to turn 2k into 4 quickly enough (if the conditions are right)
 
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z106

Guest
to be perfectly honest im still perfecting my money mgt as i too lost it all . im back in now and a lot more careful, emotionless and shrewd. at present i just have too small positions, short 1.25 on dow jones and .6 on japan nikiii. i have also learned that the ideal way to work is to keep adding continually to your account, not to just try and get one huge winner. either shipman lost a lot or made almost nothing in his nasdaq position, it depends on when he opened it. but he held on to it for quite some time, and it was down a lot more than 8% before he closed it. also he had the hang seng last year, it went up to 32000 points and he didnt close till it came back to25000. to me thats sloppy.
I don't understand know what the mniinmum exposure is when you say 0.6 and 1.25 as I don't know what the 'bet per' is with these bets.
Can you express it in terms of exposure instead?
When I say exposuer, what I mean is as follows:
E.g. If gold currently costs 900 and every euro i bet on is based on teh 0.1 change then I have 9000 exposure.
i.e. If gold rises 1% i will make 90.

So - if,say, I have €10,000 and I make 10 similar bets to above,then i would have 90,000 exposure
i.e. 9-fold leverage - i.e. Money management non-existant.Destined for failure.

The reason i say a min of 30k or so is because for a lot of assets there is a minimum exposure teh SB company will allow you do.
As i said earlier - heating oils minimum exposure is 40k.
If you've only got 10k to play with day one, then, assuming you want to maintain proper money management, then you simply cannot open a position on heating oil.
In fact - there are very few positions you would be able to enter assuming you want to use proper moneymanagement.

And as for shipman, I'll tel you exactly what he lost on the nasdaq.
he lost 2% of his pot - that's how much.
There's nothing wrong with losing bets as a trader mind you.
Lossses are inevitable. Teh ain of teh game is to minimie losses and let profits run.

Which take me on neatly to my next point.
You say shipman is sloppy by letting the hang seng get to 32000 and then drop to 25000?
I'm not so sure i'd agree.

Shipman is a trend follower.
The idea is you staty invested until you thing the trend reverses.

By teh very nature of trend following you never get out at the top - nor do you attemp to.

And while you will never maximise yourprofit on anyone bet, teh idea is that over a series of bets using this startegy,you will make more money in the long run.
 
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jimbob1234

Guest
i dont think you can trend follow using SB. by the time the upward trend is actually established you have missed a lot of the move, by the time the uptrend is confirmed over then you have lost half your profit. i just dont trade that way.

with the dow at 11200, ever point is equal to 1.25 euro to me. so i have 14000 exposure. i never really need that 14k though as i use stop losses etc and the dow is not going to decline 100% or else the world is over .

i used go for the big bets, 1 GBP on oil futures, but this was way too volatile, oil literally could fall to 10 dollars a barrel (its possible!!). if your account was up 1200% how could you lose it all? did you not use stop losses. i think shipman should have closed earlier last year as it was quite obvious that a credit crunch kills world markets for a long time, he didnt seem to know this!!!

also he opened a new nasdaq 100 position in march and the trend was still down, the 50 day MA was under the 200 day MA , shipman said in his book that you never ever go long in that kind or market until the 50 day MA goes above the 200 day MA> guess he broke his own rules
 
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z106

Guest
i dont think you can trend follow using SB. by the time the upward trend is actually established you have missed a lot of the move, by the time the uptrend is confirmed over then you have lost half your profit. i just dont trade that way.

with the dow at 11200, ever point is equal to 1.25 euro to me. so i have 14000 exposure. i never really need that 14k though as i use stop losses etc and the dow is not going to decline 100% or else the world is over .

i used go for the big bets, 1 GBP on oil futures, but this was way too volatile, oil literally could fall to 10 dollars a barrel (its possible!!). if your account was up 1200% how could you lose it all? did you not use stop losses. i think shipman should have closed earlier last year as it was quite obvious that a credit crunch kills world markets for a long time, he didnt seem to know this!!!

also he opened a new nasdaq 100 position in march and the trend was still down, the 50 day MA was under the 200 day MA , shipman said in his book that you never ever go long in that kind or market until the 50 day MA goes above the 200 day MA> guess he broke his own rules
Firstly - you say it is not possible to trend follow using sporead betting ?
That is incorrect. It makes no sense whatsoever in fact.

You trend follow the markets.
Spread betting is just one way of playing the markets.

It doesn't matter what vehicle you use to play the markets.
Trends exist in teh markets - therefore you can trend follow.

Also - as for shipman closing earlier last year dueto teh obvious impending credit crunch.
This is an invalid point if you follow trends.

The whole point of trend following is that you react to teh market - not pre-empt teh market.
Exiting due to an impending credit crunch (It's easy to say it in hindsight) would go against all the rules of trend following.

As for the trend still being down on teh nasdaq in march, shipman does not use 50 ma / 200 ma crossovers.
You ar emixing this up with some other strategy that someone else uses.
How shipman identifies an uptrend is as follows:
1) Teh weekly closing price must be the highest for teh last 12 weeks.
2) Teh price must be above teh 40 week moving average
3) Teh 40 week moving average must be increasing.

He never mentions a 50 day moving average anywhwre.
In fact - shipman never uses daily moving averages ever.
He deals exclusively with weekly moving averages.

And as to how did i lose my 1200% profit, it was due to terrible moneymanagement and greed.
The more I lost the heavier i gambled to get it back.
That's why I said in my earlier post that money management is vital.

i was correct for about 4 months and made a fortune - i was then incorrect for about 2 weeks and lost it all.

Up by teh stairs down by teh elevator shaft they say !
 
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z106

Guest
Just for teh record jombob - 200 day ma is actually not teh same as 40 week ma.
Yu should read up on trading 101 to give you a few tips with teh basics.

I'd also recommend re-reading the shipman books.
You seem to be getting confused with his basic principles.

On re-reading I'm sure you'll see he never mentions a moving average crossover which he uses.(At least not in his first book - he does use on ein his 2nd book - but he never uses that system. He only came up with that systenm as an excuse to write a 2nd book if you ask me)

Neither does he ever invest on stocks as you seem to think.
I'd lilke if you could dig me out that interview where he mentions that.
I've a funny feeling you'll have difficulty in doing so.
 
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limerickboy1

Guest
oh no no no you seem to be embarrassing yourself here qwerty. here is the link

http://www.trend-follower.com/index.php?option=com_content&task=view&id=12&Itemid=27

What markets do you participate in?
Stock indices, individual shares, interest rate products, government bonds, rental property, commercial property, currencies and all the main commodities such as gold, silver, crude oil, coffee, wheat, soybeans, sugar, cocoa, etc, etc.


of course he trades in individual shares. he has often said this.

and also the 40 week MA is the same as the 200 day MA. shipman does his analysis at the weeekends so he looks at the 40 week / 200 day MA as of closing price on friday. to put this issue to rest look at

http://books.google.ie/books?id=SYWkGQawUgAC&pg=PA539&lpg=PA539&dq=40+week+moving+average&source=web&ots=I0BJd_upR0&sig=zmYtrrHkKmYhhbHrtRGGn8pk56U&hl=en&sa=X&oi=book_result&resnum=6&ct=result

which states in the middle of the page (for example using the popular 40 week(200 day) moving average, ) implying that the averages are the same thing.

its quite clear from reading the posts here that jimbob didnt think SB was ideally suited to trend following but quwety in fairness man, get your facts straight before you make posts like this one.
 
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wellray

Guest
As I've just read Shipman & Covell, qwerty is correct, trend following never tries to predict, so yes a Credit crunch was looming but strictly speaking must be ignored until the trend changes.
Covells graphs showed how certain formulas would have achieved 20%+ yearly over a 15 yr period across 15-20 markets - has anyone tried these? And to my original question, if you bet over a year following a trend and therefore rollover the bet 3 times, does the stock/index need to rise by 8% for you to make money, i.e. is this the cost of the SB company spread?
 
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limerickboy1

Guest
ignore a credit crunch, anyone that does that is very nieve indeed.
 

maturin

Frequent Poster
Messages
56
Limerickboy,

I don't believe that the 40 week average closing price is necessarily the same as the 200 day average closing price. They could be the same if the weekly closing price was always the same as the average closing price for that particular week or if the fluctuations in the weekly averages (compared to the daily) averaged themselves out over time.

Take the DJIA as an example. 40 week MA = 12655, 200 day MA = 12778.
See http://stockcharts.com/h-sc/ui?s=$INDU&p=W&b=5&g=0&id=p12018730029
I've include a 40 and 200 week MA. If you toggle to a daily period, you'll see the 40 and 200 day MA. Note the 200 day MA differs from the 40 week MA.
 
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wellray

Guest
limerick boy I'm not saying ignore - if it happens you react or your stops will. But by acting on what may happen you're predicting which isn't trend following
 
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limerickboy1

Guest
maturin - thats if you look at it today. if you do it shipmans way and just do analysis at weekend then it will be the same. wellray i accept your point but i would rather trade the markets momentum rather than follow trends
 
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z106

Guest
oh no no no you seem to be embarrassing yourself here qwerty. here is the link

http://www.trend-follower.com/index.php?option=com_content&task=view&id=12&Itemid=27

What markets do you participate in?
Stock indices, individual shares, interest rate products, government bonds, rental property, commercial property, currencies and all the main commodities such as gold, silver, crude oil, coffee, wheat, soybeans, sugar, cocoa, etc, etc.


of course he trades in individual shares. he has often said this.

and also the 40 week MA is the same as the 200 day MA. shipman does his analysis at the weeekends so he looks at the 40 week / 200 day MA as of closing price on friday. to put this issue to rest look at

http://books.google.ie/books?id=SYWkGQawUgAC&pg=PA539&lpg=PA539&dq=40+week+moving+average&source=web&ots=I0BJd_upR0&sig=zmYtrrHkKmYhhbHrtRGGn8pk56U&hl=en&sa=X&oi=book_result&resnum=6&ct=result

which states in the middle of the page (for example using the popular 40 week(200 day) moving average, ) implying that the averages are the same thing.

its quite clear from reading the posts here that jimbob didnt think SB was ideally suited to trend following but quwety in fairness man, get your facts straight before you make posts like this one.
Ok Limerickboy/jimbob. you seem to have a few iussues with me here .

Ok - lets go through these one by one.

And before I start - i don't have it in for you or anything - but wha you are saying is simply incorrect.

Point 1
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Below is a quote you (jimbob) made in an earlier post.
"said in his book that you never ever go long in that kind or market until the 50 day MA goes above the 200 day MA> guess he broke his own rules"

Ok - lets get this staright.
This is factually incorrect.
I have read his books many times and he never mentions a system he uses where 50 day and 200 day daily moving averages crossover.
You are quite simply wromg with that quote.

Re-read his books.
He doesn't even nearly suggest anything like this.

Point 2
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Does shipman trade individual stocks?
Clrearly in that text you posted in that link he says he does.

However - the reality is this.
In the last 18 months at least, he has never trraded an individual stock.
And possibly many years have pased before he has done so.

As you are aware,he posts his positions each week on his website.
If you have been following it each week you will see he has never traded an individual stock since he started posting his positions - which was about 18 months ago.

And why doesn't he trade stocks?
I went to his course. The reaosn is that individual stocks are far less susceptible to trends than indices or commodities are.

Also - as part of the course you are allowed continual email contact with him.
I have queried him on this very subject over email and that was the reason he gave to me.
Also - with individual stocks you are dealing with management issues as opposed to comodities,etc.
As a trend follower he does not advise it.

So -i hope the fact that he told me this in a personal email puts that notion to bed.

That said - to be fair to you, he did say otherwise in that text you quoted me. So it is an understandable error on your part.
Shipman did misrepresent himself there.

Or maybe contradict himself is a better way of putting it.


Point 3
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You say that Spreadbetting isn't suited to trend following.

This statement to me is the most ludicrous you have made.

If i was to give an anaolgy, it would equate to advising someone at the race track that their horse has a better chance of winning if they back it through the tote rather than the bookie.
Obviously the vehicle you use to bet on teh horse does not in anyway effect the horses behaviour.

Likewise - regardless of what way you play the markets, it doiens't in any way effct how the market acts.
Teh fact is the markets trend.
Why on earth would using a spreadbetting company prevent you from taking advantage of thes trends?
WIth SB companies,you can place a bet in seconds.
Can you please explain that one to me
That statement has left me most confused.

Point 4
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200 day MA = 40 week MA.

Again - this is factually incorrect.
This statement from you clearly demonstrates that you actually do not understand what a moving average is or how it is alculated.
YEs - a 200 day and 40 week are often quite similar.
They are however rarely,if ever, identical.

You seem to be pushing this one on us.
Another poster on this thread has also said you are wrong with this point and they even gave you an example (which you chose to ignore)

I'm telling tou for a FACT that yo are wrong.
Before insisting that you are in fact correct, I would suggest you study how a moving average is calculated.

The conclusion you are coming to on teh basis of that link you provided is an incorrect conclusion.
In fact - i think it is clear (at least to someone who knows what a moving average is) that the point that link ws trying to gice was not say that teh 40 week MA and 200 day MA are identical - it was just saying that they are quite similar - which is truie.
They probably didn't express it in the clearest way posible though.

Believe me on this one - you are wrong.

In fact - let me give you an eample.
By your logic the 2 week MA is the same as the 10 day MA.(seeing as generally you seem to think you just multiply the weekly one by 5 to get the identical thing)

So lets say the closing price for teh 2 weeks are as follows:

Mon: 10
Tue: 20
Wed: 20
Thu: 20
Fri: 10

Mon: 10
Tue: 20
Wed: 20
Thu: 20
Fri: 10

So - what is the 10 day MA at the end of this period?
The answer is 16 (i.e. 10+20+20+20+10+10+20+20+20+10)/10
(i.e.the sum of the closing price each day divided by 10)

The 2 week MA in teh above example is 10 - and not 16 as you seem to think.
(i.e. 10+10)/2 (i.e.the sum of the closing price each week divided by 2)

There is no such thing as an equivalent weekly moving average to a corresponding daily average.
Thet are 2 different things.
There is not supposed to be corresponding weekly to daily moving averages.

I feel I can't spell it out any clearer than that for you !

If you're having trouble with that then you're in big trouble indeed for a man who said he is determined to become a full time trader.
 
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limerickboy1

Guest
qwerty - im not jimbob by the way.

1 - in his second book he talks about the method of buying when one MA crosses another one - weeklyl MA to you as you dont seem to understand how many days are in a week

2- he cant put his stock positions on the web site as this would be seen as him affiliating with a particular stock, he is not allowed do this

i didnt read all your post to be honest as it is far too long. good luck to you ( and your loss is 1300%) ha ha
 
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z106

Guest
qwerty - im not jimbob by the way.

1 - in his second book he talks about the method of buying when one MA crosses another one - weeklyl MA to you as you dont seem to understand how many days are in a week

2- he cant put his stock positions on the web site as this would be seen as him affiliating with a particular stock, he is not allowed do this

i didnt read all your post to be honest as it is far too long. good luck to you ( and your loss is 1300%) ha ha
I refer you to my previous post.It is indeed quite evident that you did not read it.

I would strongly advise you to familiarise yourself with basic topics such as moving averages before you set on this career you desire of being a professional trader.

If you require any further tutoring feel free to PM me.

And for the record he is allowed put his positions on his web site.

Its on http://www.trend-follower.com/ right now.
 
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