---

How to Trade Phoenix

This page describes the steps that you will need to follow on a daily basis to trade Phoenix.  There are three steps that need to be followed:

Check for new orders
Cancel existing orders
Adjust existing orders
 
On some days you will need to take action in all of the above steps whereas on other days you won’t need to do anything.  This will depend on the prevailing market conditions.

With Phoenix you will place far more orders than are actually executed.  This is because Phoenix uses limit buy orders placed below the current market price to open new positons. This is a characteristic of mean reversion trading.

The descriptions below assume that you have read and understood the Understanding the View My Trading Systems page 

Check for new orders

The first thing to do is to look for new orders that need to be placed to enter new trades.  In the table below there are two orders that need to be placed on NSM. There is a limit order and a linked stop order.
 
Before the market opens on Wednesday 21st March 2007, you would need to place a limit order to buy NSM at $23.55 with an if done linked sell stop at $19.28.  This means that if the market was to trade down to $23.55 the limit order would be executed and the linked sell stop order would automatically be entered into the market.  If the market didn’t trade down to the limit entry, then neither order would be transacted.

The limit order has a dark green highlight in the Order Purpose column and says ‘Enter Trade’.  The stop order has a pink highlight and has ‘Fixed Stop Loss’ in the Order Purpose column.

You also need to check the open orders table for profit targets for newly opened trades.  These will be highlighted in light green and have ‘Profit Target’ in the Order Purpose column.  The Profit Target orders will be linked OCO to a stop order that will already be active in the market.  The stop order would have automatically been placed when the position was opened because it would have been linked to the limit order that opened the trade.

For example, in the table below there is a Profit Target order for an open BMC trade.  The open position was entered on 12th Feb 2007 and details can be seen in the open orders table at the bottom.  When the limit order to enter the trade was executed, the stop order listed in the existing orders table below, was automatically placed.  The new Profit Target order needs to be linked OCO (One Cancels the Other) to the Fixed Stop Loss.  The new order will be to sell BMC $32.44 linked OCO to the stop order to sell BMC.  This means if the market goes up and hits $32.44 the limit order will be executed and the stop order will be cancelled.  Alternatively, if the market goes down to $27.50 the stop order will be executed and the limit order will be cancelled.

Cancel existing orders

You will need to check the orders in the ‘cancel existing orders’ table to see if there are any active orders that you have that need to be cancelled.  If you have been using Day Only (DO) orders and linking them correctly (OCO and if done) then all of the orders listed in the table should have been automatically removed from the market for you by your CFD provider.  Note: different CFD providers deal with DO differently so you should consult your provider to ensure you understand how they deal with them.

The table below shows the list of orders that need to be cancelled before the market open on Tuesday 20th February.

Adjust existing orders

The next step in the process is to adjust any existing orders.  The table below shows the list of orders that needed to be adjusted before the market open on Wednesday 28th February. In this case, the order is a profit target but from time to time there will also be fixed stop loss orders to be adjusted.  You won’t need to adjust all of your orders everyday.  You need to understand how your CFD provider deals with your orders because some providers won’t let you adjust an order.  In this case you will need to cancel the order and place a new one.  You will need to make sure that the linked orders are still linked appropriately in this case.

 Open trades

The open trades table details all current open trades . In  the status column you will see the comment 'Hold' and then all the pertinent details relating to that position.  This enables you to check your order status is correct and in line with the current trading positions.