FT has been trading full time from home for two years, with nothing but four kids and a beach to distract him .
He fills his spare time with weight training and rugby, though more coaching than playing these days.
FT mostly trades the forex markets and although he plays FTSE on occasions his bread and butter market is £$.
He likes to think that his technique is evolving but still hasn’t the temperament or money to back the big calls. He prefers to trade between 1 and 3 times a day, aiming to take regular small gains, but feels part of the evolution is in not dealing if the conditions don’t feel right.
Happy Days In Europe
Wa-ha-hey! That’s a bit more like it. My short FTSE position is a touch better, there’s some life in my Friends Provident long position and I’m having a right result in EURUSD. Happy days.
The past 24-hours has witnessed a widening gap between the US and European economies. Yesterday in the US, consumer expectations hit a 35-year low and the S&P/ Case-Schiller House Price Index fell at a record rate of 10.7%.
Today, French and German business confidence surveys both produced stronger numbers than expected. An hour later EU Industrial Orders blew away expectations with a 7.3% rise over the past year.
I’d been looking for another trading opportunity in the Euro as it still seems to be teacher’s pet in the school of forex. My trigger was the move on the improved IFO figure, better than forecast, and last month’s number.
The EURUSD rate moved swiftly through resistance at $1.5613; I placed a £10 spread bet to buy at $1.5627, with a wide stop loss at $1.5580. This was just below the day’s low and designed to allow for a bit of short-term volatility.
With the power of hindsight I took my first profits, selling £5 at $1.5637, way too early. But at the moment it’s a system that works for me. Locking in an early gain allows me to relax more with the balance; I’m not greedy, I want steady gains and clean pants. As the price continued to improve I sold £1 bets ahead of resistance at $1.5654 and then at $1.5670 and $1.5699. The price is currently consolidating an overbought position at just above $1.57. My trailing stop is now up to $1.5688, to capture most of my gains if traders don’t fancy life above $1.57. So far I’ve made £192 with a further £122 locked in.
Reports in the paper suggest JC Flowers is working on a fresh offer for Friends Provident. This helped the shares to recover to 125p though, like Xstrata, the current price suggests a lack of conviction in the rumoured offer of 150-160p.
Here’s me being miserable again, but whilst equities are doing the recovery jig, be aware that none of the central banks’ actions have freed up 3-month money. The 3-month LIBOR fix yesterday was at 5.995%, higher than before the recent actions to free up liquidity in the money markets. This suggests that UK banks are still keener on hoarding cash than lending it to others.
I’ll finish with a joke I nicked from today’s Sun,
“What’s the difference between Heather Mills and Northern rock? One has £25million, is a bit wobbly and screws old people with lots of savings. The other’s a bank.”
Watch out for US Durable Goods at 12.30pm and New Home Sales at 2 o’clock.
Happy Trading
Enjoyed this post?
March 26th, 2008 at 12:27 pm
In your opinion how much of y’days gains were driven by short covering? I also noticed that there was a quarterly FTSE re-weighting.
March 26th, 2008 at 12:49 pm
Hi Cooler,
yeah, my own view is that quite a bit of it was on short covering.It’s a bit Easter chicken and egg, because there needs to be something to provoke the need to cover. But I reckon the move, especially in banks was exaggerated by exactly that. I’ve always reckoned that a lot of the index changes were taken care of in advance.
The next move in equities will be interesting. A) the market falls, proving it’s a bear market and the traders re-open their shorts(sounds like a flashers convention). B) the market consolidates then pushes forward on genuine buying, forcing people like me, who don’t believe it, to close out short positions.
Like I mentioned y’day, the market is holding in well considering the poor data. I’ll take more notice once the 31st March quarter end is done and dusted.
You still playing the Aussie at the moment?
March 26th, 2008 at 2:00 pm
No sitting on my hands for a while. Too many variables!
March 27th, 2008 at 11:34 am
Read your blog and it is intereting. I am a betting dummy. I want to know how much needed for trade currency.ie: initial margin requirment.For example, I use demo account and open a position Eur/usd buy 30 stakes it cost 6000 Sterling/30=20pound for each 1 pound stake.Am I right?tia waiting for your reply!
March 27th, 2008 at 11:43 am
again, according to the explaination about IMR,say if the min requirement for eur/usd is 40,if bet 30 pound for 1 pip up or down,The margin at least should be 40* 30=1200 pounds put into account. I am very confused about this.Could you please give me the right information.tia
March 27th, 2008 at 12:53 pm
Hi Lyllia1
You are quite right: to work the amount of funds needed to place a currency or index bet you simply multiply the IRM by the stake. So if your stake is £30 and you are betting on EUR/USD which has an IMR of 40 then you would need at least 30 x 40 = £1,200 in your account to open the bet. Any less than that and you would need to reduce the stake. However the demo account opens with £10,000 so if it is a new account there should be plenty in there.
A good explanation of Initial Margin is given in Tutorial 2 - http://www.paddypowertrader.com/academy/tutorial-two.php - choose slide 9 from the green buttons at the bottom if you don’t want to watch the whole thing. Slide 15 also walks you though how to check the IMR on a bet before opening it.
If you’ve any other questions about IMR do you mind if I ask you to email support@paddypowertrader.com or call our helpdesk on 0800 0213 555 from the UK or 1800 556 686 from Ireland. The reason I ask is that these comments should really be used for people to talk about the blog or general chat about their trading positions. And the helpdesk staff are great at answering these sorts of questions.
Thanks!
March 28th, 2008 at 11:05 am
Hi Z thanks! I got email reply says if deposit 40 pound for 1 pound bet.The SL will be 32 points away. If need more SL point then need to put more money.Could you explain that? For example, if put another 40 pound how many SL point should be get?tia.