Index King In Da' House !

This is a discussion on Index King In Da' House ! within the Indices forums, part of the Markets category; Hey Mug ! Great going. I got out @9520 . Overall I lost 20 points this trade which was not ...

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Old Sep 9, 2003, 6:11pm   #121
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** Index King Update **

indexking started this thread Hey Mug !

Great going. I got out @9520 . Overall I lost 20 points this trade which was not too bad.

I have refined the method into a more safe one which was the principle of the post earlier on. The trades I post will last only a maximum of 7 days (rare). This allows plenty of time for profit to be made but if no profit then flat or down a few points will be the result over that time period. The strike rate is unchanged @84% so no need to worry there.
The Dow may close lower but with current sentiment it looks unlikely.
Only put the reverse trade on if Dow close @9516 or less today .
Also due to the delicate nature of the Dow I would employ a stop loss (new trade will be buying Dow) of around 100 points on Dow. Reason is I think the markets will go down dramatically at some stage and with the current difference from the Ftse being near it's all time high(5250-5350) the Dow is looking fragile. Unless the Ftse moves into 4300-4400 range it is a dangerous game to buy the Dow now.
Overall the last few trades (over 10 days) have netted over 100 points roughly so we're not too bad. This trade may turn out to be a loser by the time its time to Buy Dow/Sell Ftse but that mean there are many winning ones to follow !!!
I hope this trade has emphasised the need to trade BOTH indices AT THE SAME TIME . The Buy Ftse trade began with the Ftse in the 4160-4170 region remember and the Dow only up a few points So the Ftse won through for us (or saved us?)
Also you can see that trade can carry a loss while progressing so you must bet small on this long term strategy. Only when capital is high should you venture fivers and tenners a point (around £20000 capital)
I will post in good time to go long Ftse/Dow difference.

Kind Regards
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Old Sep 9, 2003, 6:18pm   #122
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indexking started this thread Hello Quint

Sorry didn't notice your question there. I use Deal4free and all bets are rolling cash. This mean bet remains live unitil cancelled by me. They are not closed out EOD so that you have to renew the next day. Ability to trade out of hours is necessary also.Currently I'm only posting Dow/Ftse trades due to lack of time. System is effective for Dow/Dax, Dow/Cac also. I may post these again but not at this time.

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Old Sep 9, 2003, 9:04pm   #123
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Hello IK

I see 9505-9510 close on D4F or there abouts are you going to enter your trade, buy the DOW, sell the FTSE, pretty well spot on with the close, I do understand your sentiments with the DOW situation at the moment, could go either way, who knows?
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Old Sep 9, 2003, 9:12pm   #124
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indexking started this thread Hello all

The Buy Dow/Sell Ftse trade has been triggered @ a difference of 5244.
Place this trade with no more than a 25 point leeway for the futures prices. Wait til tomorrow if you can't do this tonight.
Please to watch this trade for reasons in last post !

I bought in at difference of 5255 (futures !!). Remember minimum stakes and watch carefully. Stop loss addicts might like to set a 100 point stop loss on the Dow (just in case). I'm suggesting this because Dow is so fragile right now.


The last trade was a winner but only by a few points. Call it flat because of futures prices !
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Old Sep 10, 2003, 10:42am   #125
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IK is this trade going to be worth the risk, ive done exactly what you said, but your right when saying the Dow is very fragile and could end up falling downwards!
Very scary when your long, and not the type 2 put a stoploss
When do u think would b a good time 2 pull out?
Its early so far and my Dow trade is already 20 points in the wrong direction

Thanks Ik
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Old Sep 10, 2003, 11:34am   #126
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indexking started this thread Mug, the trade hasn't really started yet!. I'm expecting an initial drop on the Dow today followed by late buying.
There is still strong support @ 9500 which was confirmed by the Dow closing above it yesterday.
Just keep an eye on it but really you should leave it all day. Remember the Ftse will fall as well if the Dow does so you are hedged to a point.
If you're that uncertain just watch this one. The opposite trade should be triggered end of today if my hunch is right.
From my calculations any close above the current trade difference is the trigger to Sell Dow/Buy Ftse.
You may be better off waiting on this one til the next trade.

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Old Sep 10, 2003, 11:48am   #127
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Ive already started the trade IK, should i just leave it then till end of day?
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Old Sep 10, 2003, 1:36pm   #128
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hmmm...not liking the look of this so far....see how the day pans out i guess
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Old Sep 10, 2003, 2:19pm   #129
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Additional Info for Pairs Trading

If your following IK's trades your trading the differential

If you wanna be completely hedged you would need to trade the relative

If you traded the diff. and you were long ftse short dow and if the market tanked 50% then you would have a very nice profit

if you were short ftse and long dow any large drop in the market would open yourself up to a huge loss

On the other hand if you were worried about large falls then you would be better playing the relative ie. £2 on Ftse £1 on Dow

That way you would be hedged and any sharp falls would equal the profit on the short leg

You take you choice - diff can be more profitable but more risky if your the wrong side of it

There is less risk in relatives but they can move slower

Finally if you think we have a sharp fall ahead then selling Dax Buying Ftse would be a another good bet .
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Old Sep 10, 2003, 3:05pm   #130
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indexking started this thread Hello

Although this trade is risky (long ftse/dow diff) It is what my system is saying to do !
The differential required (on an end of day close)to change bet to Buy Ftse/Sell Dow is little higher than the start of this trade. Therefore the risk that this could be a losing trade is high, however system says to Long it so thats what I'll do. When it tells me to short the differencial then I will short it. The idea of my system is it removes the need to second guess how market takes news or anticipating any problems. It's a very clinical system but effective.
Today the differencial may decrese but then tomorrow a buying surge may happen. This trade could last a few days and the differential end up back in the 5300 area. Then the sell difference bet should be triggered (possibly catching the impending collapse)
I hope you can see the mechanics of this. The System can't time it exactly but it's as good as you'll get !!

No doubt people are waiting for a loss trade to occur so they can rubbish the system etc. Bear in mind a loss will occur from time to time but they won't be big losses. Overal this method is highly profitable, believe me.
Since posting trades on this board I believe I posted one loser but soon compensated it with a big daddy bet !
Personally I am up just under 3500 points on year so far ( combination of this method, previous method and Big Daddies with the Nikkei) with an average of £10 per point trade. I rely on trading for living since my Janitor pay is poor. It is in my interest to do winning trades so I had to find a winning system. This is it although it's not a 100%.
Please to just bear with me and judge me over a month or so before writing me off !

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