Spreadbetting Journal – Trend Strategy

I’ve opened another very small position on the S&P 500 Dec 10 Spread which brings my position risk up to 0.7%.

Entry Price: 1178.4
Qty: 0.5
Spread: 0.6pts

Stop: 1147
Limit: 1220

Account Risk: 0.39%
Potential Account Profit: 0.52%
Risk Ratio: 1.32

The risk ratio is very small at the moment, but I’m using a safezone stoploss so I will be moving that up at the close today, which will start to bring the risk ratio up. The buy signal is still on, as shown in the attached chart and I think it has a bit room to run yet. I’ve set my limit order near the previous high, but I might switch to a chandelier stoploss to track the move if it gains some momentum over the coming days.

Looks like I’ve got a possible entry on GBP/USD. The buy signal was triggered at today’s close. So now I need to confirm it’s a valid signal and then watch for the pullback to value in the coming days for decent entry point. I think there’s a good chance I’ll get one as there should be some resistance around the 1.60 level again.

The 11 Day EMA is currently at 1.5808, so that is my initial entry target with the chandelier stop currently at 1.5724 – so an 84 point margin of entry.

I will watch closely on the 4 hour chart and the 5 min chart to see if it finds a base and turns up. As if it breaches 1.5724 the signal will be invalidated. If however, it does base in my buy zone then I will go long.

Patience is needed for this I think to see if it has potential to be good entry point.

Based on the overnight price movement of GBP/USD, the 11 Day EMA has moved to 1.5826 and the Chandelier exit to 1.5738, so that is now my value zone where I will look for an entry if the price action looks promising after the GDP data this afternoon.

Doesn’t look like I’m going to get an entry point today. As the US GDP data was good and Pound is rallying now. It got close though, was only 37pts from my value zone earlier, but I will get another chance to get in next week I think.

I decided to close the scale in position I placed in the S&P 500 yesterday as the market looks like it could be stalling today. So I closed for a very small profit with the aim of getting back in early next week at better value.

I have also tightened up my stop loss on my previous S&P 500 position so that it will close at breakeven if the market sells off. So risk is now zero on this trade.

Closing trade
Entry Price: 1178.4
Exit Price: 1181.30
Qty: 0.5 per point
Points: 2.9
P/L: £1.45

It looks like I’m going to finish about 1% up for the week. But I will post my trading spreadsheet over the weekend and review the open trades for next week, what I need to watch out for and my plan for getting into GBP/USD on a pullback to value.

Attached is a screen shot of my trading spreadsheet, which I use to list my trades, calculate risk and potential profits. I also like to grade my trades based on how much of the daily Keltner Channel I manage to capture. I use the following grades:

A+ 40% and above
A 30-40%
B 20-30%
C 10-20%
C- 0-10%
D Below 0%
E Below -10%
F Below -20%
G Below -30%

It turned out to be a good week for my new account. All trades are currently in profit, giving me a 1.02% gain for the account. I’ve tightened up my stop losses on Randgold Resources and moved the S&P 500 stop to breakeven. So my risk is now back down to 0.39%.

I intend to re-balance my risk at month end each month. So I have calculated the new account size and adjusted the maximum sizes I’m allowed to trade in November.

November Account Start: £4065.49
Maximum Account Risk (6%): £243.93
Maximum Single Trade Risk (2%): £81.31

I’ll be watching the market closely this week as is going to be a very important week with the mid-term elections Tuesday, FED announcement Wednesday and Nonfarm Payrolls Friday. Think there could be a good chance that traders sell the news, so hence the tightening of my stoplosses. But it could go either way so will be watching with interest for any trading opportunities.

GBP/USD is getting closer to my entry zone. The weekend minor moves and todays action so far have brought up the 11 Day EMA to 1.5930. So my new target entry zone is between 1.5930 and the 1.5736 chandelier stop loss.

This is almost a 200 points zone, so I’ll be looking to get in at the lower end of the scale to keep my risk below 2%. So now I’ll be watching the intra-day charts to look for good entry point if it pulls back to value.

I exited my first position in the S&P 500 tonight on the pullback to value on the 4 hour chart after hours.

Closing trade
Entry Price: 1171.9
Exit Price: 1182.10
Qty: 0.5 per point
Points: 10.2
P/L: £5.10

Trade Grade: C

A very minor profit, but the trade got a grade C, so I’m fairly pleased as a C grade or better is what I aim for. The aim with this trade was to build the position size on the pullbacks to value, but today's pullback to near the 100 Bar EMA on the 4 hour chart looked stronger than the previous ones, so I was a bit more uncertain about the position; and with the election tomorrow and data this week I’ve decided to step aside for the moment. But will probably be back in later in the week once I have a bit more clarity from the data.