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This is a discussion on Mr Spread Better's blog within the Trading Journals forums, part of the Reception category; www.paddypowertrader.com European trading can react to US holidays in one of two ways. The lack of liquidity can lead to ...

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Old Feb 17, 2009, 3:55pm   #49
 
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Joined Nov 2008
No Further Panic In Lloyds Shares

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European trading can react to US holidays in one of two ways. The lack of liquidity can lead to exaggerated price moves, or yawwwnnnÖ.But it gives a welcome chance to prepare for the week ahead.

The trade diary has a few spare lines on todayís page; Late on Friday I sold £5 of Lloyds at 58.5p, but they were a punt on the weekend press and I closed the trade this morning at 56p in the absence of any follow through. The shares are now steady at 61p, around 10p off the early lows.

Click the image to open in full size.

An early short bet on GBPUSD backfired. I sold a token £1 on what looked like a failed attempt to re-take the $1.42 figure. But the trade was ill-timed and I closed out on a move above the moving average for a £50 bloody nose.

At Mid-day the range on GBPUSD was a derisory 123 pips. The average daily range over 20 days is around 260 pips. With no US trade today Iím going out with my in-house IT expert to get a new computer.

The quiet trading day provides an excellent chance to catch up on a bit of reading and Galloping Zebu has just come out with a great piece on how to identify trending markets (Finding Trends in Markets Part I). Although I rely heavily on the 21-day moving average as my trend indicator, my daily charts also show the ADX indicator mentioned in Zebuís article as numerical back-up.

The trouble is, the current readings on major equity markets support the cries in many of the recent posts that the markets are soooo dull. Thereíre no discernible trends in the major European indexes and only a weak trend in the US.

None of the major currencies are demonstrating a strong trend at the moment, again, borne out by the regular swings in price. Perhaps this serves as a useful warning to newbies that, unless youíre an ace range trader, to be careful with entering trades where the market will chew you up and spit out the left-overs- a bit like it did to me this morning!

This is the week leading up to expiry of February options on Friday, but before that thereís a host of key economic announcements, including the minutes of central bank meetings in the UK and US, inflation numbers from the UK, Europe and the US and the German ZEW survey. Check out the full list in the Weekly Wrap.

Finally, the Atlantic Ocean covers 41 million square miles, give or take the odd wave. So how on earth did two state of the art, nuclear-armed submarines with radar equipment happen to collide? Was this an expensive game of chicken, or a ploy to get Gordon Brown off the front pages?

Happy Trading
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Old Feb 17, 2009, 4:00pm   #50
Joined Feb 2009
bear on tsb, the hbos toxic assets are far from revealed.
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Old Feb 18, 2009, 11:52am   #51
 
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Gold Higher As Equities Plunge

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Thatís more like it. The equity bears are having a picnic; the S&P 500 is currently below 800 and gold has plugged $1000 into its Sat Nav.

My only trades today have been in GBPUSD; the first trade was poor quality and cost me a few quid, the second was better and left me with an overall profit.

Iíd been hoping to get to the gym before the release of the UKís inflation data, but for some daft reason decided to open a trade first. I fancied that the overnight news on European banks, and the consequent weakness in equity markets, would benefit the Dollar. The GBPUSD rate was way below its pivot point and falling. I would have preferred to sell on a pullback, but early-morning fever took over and I dipped my toe in with a £1 sale at $1.4136.

Click the image to open in full size.

The only thing that happened for the next hour and a half was that I missed the gym. The price gyrated close to my opening level, not inclined to return to the lower levels ahead of the inflation announcement. In fact the steady improvement ahead of the number looked suspiciously like a few people knew what was coming. I opted to hold the bet over the announcement (only because it was a tiddly £1 bet) and closed out at $1.4178 on the higher than expected inflation figure. The loss of £42 was irritating but bearable.

My second trade was of far better quality, and had the added bonus of providing a link to Galloping Zebuís excellent Finding Trends In Markets Part II.

Zebu talks about using a moving average crossover to enter the trade; this usually means that you donít get the full 3-course meal, but that youíre more likely to enjoy a good main course, rather than get chucked out during your starter. I tend to trade when the price crosses a moving average, rather than wait for a moving average crossover, but only if the move is confirmed by either a MACD or RSI momentum indicator.

Donít get me wrong; Iím not saying my wayís better (itís certainly more risky). Iím simply using it as another example of the many variations on a theme. If you check out the chart above you can see the two entry points; the first where I entered after a closing candle on the price crossover, the second after a closing candle on the moving average crossover. But thatís a selective (though topical) chart. Many other charts would show my early entry stopped out as the momentum dies. I guess the real message is, ďhave a play, make use of the demo account, and see what floats your boatĒ.

So, back to my trade, I bought £2 at $1.4222 and, after trailing my stop at a safe distance, closed the trade at $1.4295 after the second assault on $1.43 failed. The trade netted me £146; enough to offset my earlier loss and pay for some tuna sandwiches.

But forex trading was a sideshow today. My real winner was an extremely patient short bet on FTSE, and I must admit to closing out part of the short at 3998. Previously there was good support around here and I reckon Iíll get the chance to re-open at a higher level in the next few days. The real fun will begin if the S&P 500 ends the week below 800. With option expiry on Friday Iím hearing there will be a lot of support around this level-hmm weíll see.

Click the image to open in full size.

A final observation; gold looks to be the safe haven of choice, rather than the Dollar or Yen.

Happy Trading
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Old Feb 18, 2009, 11:57am   #52
Joined Feb 2009
the market is running sidewards. The pensions investments and fund manager investments are buffering this position. its not like the old days where pension provisions were not as heavily invested into stocks. these funds are not as concerned about the individual stock price as long as they get dividends, if your looking for more bear behaviour look into where pensions are pulling, because thats where new bottoms will appear, but to be a bear now is as smart as being a bull.
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