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.
My Radar Blew Up As Well.
Hi folks,
Today my investment timing was as good as Wednesday’s timing in deciding to fly to Dublin. While I was away having an in-depth look at airport lounges the FTSE baulked at my target level of 5550. This morning, a bit tired and weary, I wasn’t really in dealing mode, but I fancied a small sell bet on equities. Sure, I made a profit, but only a fraction of what was on offer later in the morning.
Though I say so myself, my entry point, selling FTSE at 5456, was bang-on. But, conscious that the rising gold price was giving a bid to mining stocks I made up my mind to take a quick profit. At the time there looked to be good support at just below 5400 so that’s where I bought back my short for a profit of £56. That was the action of a tired trader, check out the chart below:
With just a modicum of patience I’d have seen the index fall (and stay) below the 5400 level. News flashed across the screens that Israel’s fly-pass in Iraq was a practise for a more deadly manoeuvre in Iran. Gold and oil gained a better bid than Ronaldo and support in FTSE performed a Charlie Hodgson tackle and let the bears rampage through to reach new lows (Aggghhhh No 1).
The FTSE dropped briefly below 5300 as the Dow broke 11100. Although my RSI indicators were showing FTSE as pretty oversold, I used a bounce in the market to place a £2 sell bet at 5309 (Aggghhhh No 2). Yep, I know it looks stupid now, but I’m happy to hang in there. The dead cats used in recent bounces must have come from China; they’re a pale imitation of the real thing. Having tested new lows I reckon the market’ll have another look at some point; it might be on the US open, it might be next week. Patience this time might be a virtue.
Hey, check out the gold price. Regulars will know that I focus on FTSE and currencies, but that doesn’t stop me window shopping. And I’ve seen gold break above previous resistance in the $950-55 area. For me it’s too soon to jump in; I’d like to see a daily close above that level first. But if it does, then I might at least demo trade it to see how I would have done. And if parcel post deliver those new heavy-duty testicles I might trade it for real.
I’m off for a shot of caffeine; I want to stay awake for what could be an interesting end to the week.
Enjoy the Weekend
July 11th, 2008 at 2:13 pm
Hey FTSE’s recovered (at the moment), but check out oil and gold;Prices being driven by Lewis Hamilton.
July 11th, 2008 at 2:16 pm
What about a sneaky short on oil FT, think will it drop today?…its looking well oversold but i am still scared.
July 11th, 2008 at 2:22 pm
Yeah, I think there may be some money on the downside (quick, go long). But long term it’s only going up.
Torn between top-slicing the Energy ETF in my SIPP and hedging it with a short spread bet on the oil price.
July 11th, 2008 at 2:33 pm
Think i need to change my pants.
July 11th, 2008 at 2:34 pm
You guys are braver than me. Yeah, I can see a reversal. Would I put a bet on it? I don’t trade the black stuff, but the one thing I’ve been consistent on is not going against the trend. And I’m not changing now. Yep, if I were already long of oil I’d take a profit, but to risk capital on a short with so many planes flying around the Middle East, no thanks. The iron balls haven’t been delivered yet.
July 11th, 2008 at 3:41 pm
OK, so you guys would be in the money now on oil. But I still reckon it’s too risky for me.
July 11th, 2008 at 3:49 pm
Yeah, you’re right, it’s a dodgy game betting against the trend. I’m still looking to top-slice my energy ETF but it actually fell while the oil price rose, thanks to the dollar (in which it’s priced) taking a dive.
So, while one of the benefits of spread betting on things like oil is that you remove the currency risk, it means it might not be a true hedge for my ETF and could actually increase my overall risk (I think, but it’s a bit complicated and it’s been a long week).
As for FTSE, well wasn’t that exciting. I guess there won’t be an attack on Iran in the next 24 hours but let’s hope the Israelis keep their jets in the hangar on Sunday.
And go enjoy the weekend.
July 11th, 2008 at 3:51 pm
You missed out big style there FT mate, but i understand…its totally nuts to be anywhere near oil atm. I went in twice, took £238 just there now and a few hundred earlier. My trades lasted no more than 5 or 6 minutes… i couldnt “bear” it any longer! I still have itchy fingers for the bounce though.
July 11th, 2008 at 3:59 pm
Hey aaron, nice one mate, glad you followed your own instinct. Looks like the pints are on you tonight.
Ken, I could do with the Dublin radar system being lent out to the middle-east, at least until Friday lunchtime. I didn’t really expect my 5250s to be touched, but there you go, interesting times. No close stop on my £2 short this time, I’m willing to run up a bit of red ink to keep the hedge on. I might even increase the short even though it might be madness down here. A thought, now a few of us have given up on the bounce, will it happen going into expiry?
You guys enjoy the weekend too.
July 13th, 2008 at 5:15 pm
hi ft
How to use daily time frame to identify the trend of all day?
This is my system to identify the trend of day…i don’t use it to enter the entry ,to push the trigger, i just use it to identify the trend of all day…I hope you can consult me and make my system better and if u have a system better to indentify the trend of all day, please tell me know, i’m really grateful if u can share me your knowledge. And this only identify the trend not the neutral of the day, so i don’t know how to use identify the neutral?
i use bb(20) , sma(20)( the middle of the trend), macd(12,26,9), rsi(21)
1)when the candlestick touch upper bollinger band and macd0 , 70>rsi>50 then it’s an uptrend, and i wait for the candlestick break upper bb and retest the upper bb then i confirm it’s an uptrend
[b]vice versa with the lower band[/b]
3) when the candlestick touch the sma(20) (the middle of bb) with the head from down to up…then if macd0, rsi>0 then i wait for the it break the sma(20) then retest then i confirm it’s an uptrend
[b]vice versa with the head from up to down[/b]
5) if the candlstick of the previous day close above upper bb or close above sma(20) with macd>0, rsi>0 then it’s an uptrend
regard
onlydragon
PS i don’t know what is trend when rsi>70 or rsi
July 14th, 2008 at 10:47 am
Morning Onlydragon,
sorry for the delay, but my computers run on a limited usage policy over the weekends!
Blimey, I’m afraid a full answer would cause meltdown at paddypower towers; part of the global deforestation has been to provide books on trading strategies and I’ve not read half of them. Your strategy looks vaguely like one I’ve looked at before.
Essentially I’m a simple guy and, as my missus will testify, a long way from the finished article. I spent my first year of trading looking at different ‘technical’ strategies involving moving averages, stochastics, MACD, RSI and a combination of all of these with a few bat’s wings and toads testicles mixed in for good measure.
During my second year one of the pennies dropped and I concentrated more on risk management. This meant cutting the number of trades to higher probability ones. I also found I preferred to use basic support and resistance lines (and pivot points) to trade off. But even these pose the same dilemma of whether to sell the bounce or the break below support. I failed and succeeded with both.
I use the 21-day mav as an ‘easy to read’ trend indicator, but also like drawing lots of lines. I don’t trade off RSI, but use it more as an early warning system (if its well over 70/ under 30 I generally hold off trading). I also look for divergence signals (see today’s blog http://www.paddypowertrader.com/blog/index.php/2008/07/14/bailed-out-by-alliance-leicester/
) where the RSI trend contrasts with the price action of the index. My mate Garden Gnome trades very successfully off this signal.
What I’ve found from my technical studies is that it’s a bit like economics; lots of traders have their favourite methods, some highly successful. But there’s also a lot of healthy debate over which methods work best and for how long. For example, I make more money trading with an established trend, than range trading, others will be kings at just jumping in and out of the range.
What i’d strongly, strongly suggest is to demo-trade your strategy until you’re confident that it works for a good percentage of the time; then it’s down to the art of risk management.
There’s bags of reading materials out there; one book that I still haven’t finished is ‘Forex Patterns & Probabilities’ by Ed Ponsi, which shows some of his set-ups.
Another thought. If you look at our Home page paddypowertraders is offering an hours free tuition, which has gotta be good.
Hope that helps a bit. Play around in the demo account and if you find the winning strategy please let me know!!
This is a massive topic. If anyone else out there reckons they’ve got it just right, or whether it’s all a load of twaddle, stick a comment in.
Ah, and my demo gold bet’s in the money (for now).
July 14th, 2008 at 11:33 am
Hi Folks
Maybe theoretically there is a chance now, more so than ever, that technical analysis really does work. If only for the vast numbers of people using it… i am sure the volumes of people using it now would have some effect on the market trend in some timescale, eh? I assume this kind of phenomenon has happened in the past as well …didn’t something like that happen with derivatives pricing, and the Black Scholes eqn?
Anyhow, the TA method i am using has served me well sofar (in all of about 2 weeks, a 100% profit) …what i am honing though is timing. If i cant bloody act on the triggers its pointless researching them. After watching a nature programme the other night it dawned on me too that, trading is a little bit like hunting…softly softly catchie monkey.
July 14th, 2008 at 11:38 am
Yeah,
as i’m still learning, patience is the most virtuous of virtues. you still shorting oil Aaron?
July 14th, 2008 at 12:14 pm
No FT, i just seen that it was wildly over sold, all my check boxes were ticked for a trade so i had to go for it. Still shorting, only on the dax though from now on… made a few bucks earlier.
So are you now totally against MACD and Stochastic crossovers FT?…i find they work well if you are willing to keep the trades running for a small time… Like 10-60 minutes? I dont know of i could call that scalping, could i?
July 14th, 2008 at 6:54 pm
lol verygood… you having a pop at me for shorting oil FT? If so i can live with myself, that few hundred quid will come in handy too. It probably was a silly move, but someones gotta do it.
July 15th, 2008 at 6:29 am
Morning aaron,
no, I never have a pop at anyone for trading. you made the right call and made a wad. Good on ya mate. Just checking through screens and e-mails arter a very long day and night in various bars. I see my pretend gold trade’s looking Ok,as is my FTSE short.
MACD and Stochs. I wouldn’t dis them; I still cast an eye over them I just found that they would perhaps confirm an opinion, but not trigger a trade in their own right. But like women, football team and cars, there’s plenty to choose from, some work for one but not for others.Hey I used to call 10-60 minutes a long-term trade! It’s really only during the last year that I’ve felt comfortable leaving positions overnight.