BarNovs FTSE250 Indexicator

From a top-down approach, this would be an excellent way if you could apply it to sectors. When the index and sector becomes a buy, choose the equities within that outperform the sector. I don't know how much work this would involve,or how feasible it would be. I think that whilst there are big gains for day traders, a simple mechanical system is best suited for others who can't react so quickly.

All the best
Mark
 
Try looking at Wilders systems:

a) Directional Movement
b) Volatility Index
c) Commodity Selection Index

If you don't have software that implements some or all of these then the old favorite tech stocks would be ideally suited imho.

eg. BLM, BLZ, MONI, BHM.

Many of these are noted for following the nasdaq index and display very clear trending characteristics.

Darth.
 
how do you use/reda the various indicators ???

Darth .. I use sharescope and have the ADX, Volatility indicators and one called Commodity Channel Index.

What settings do you use ... and what are you looking for ... signals or confirmation of new direction(s).

Thanks in advance

Paul.
 
I think that there is a mismatch between the sharescope indicators you mention and the ones I use in Metastock.

Commodity Channel Index is Lambert's indicator that measures deviation from the statisitical mean. It is a good oscillator but not one that I use.

Commodity Selection Index is Wilders indicator for selecting stocks with volatility and trend.

I'm not sure what the Sharescope Volatility Index actually is but I don't think that it is Wilders index. Volatility can indicate tops and bottoms (high values) or suggest an imminent move (low values).

The Sharescope directional movement index is Wilders indicator (as is RSI) and there are several methods of interpretation mainly based on cross-over of +DI and
-DI. Try looking at www.equis.com for more background and the connection with ADX and ADXR (the associated indicators that you can plot).

Regarding values this is a perennial question. You need to find values that work best on the time frame you are using and even try multiple values for different time frames (this works well with stochastics and roc).

The Achelis book (equis.com) recommends popular values for many indicators and is a good starting point.

Try reading some of the standard text books on technical analysis (eg. Murphy, Pring etc.) as these will give you a better understanding of what the indicators are and how they work.

Darth.
 
NOW LONG from 5988 ....

Short closed yesterday with 733 points gained.

Now long from 5988 ... 1st post updated with new data.

Paul.
 
1st post updated with new data
13/26 (9sig) MACD - recent crossover
Stochastics in oversold territory
Both 10 & 40 day momentums well down from midpoints


Could see some sidewqays trading before starting the move up ????

Paul.
 
Sideways

Paul

I have been watching the FTSE 250 closely since you posted your idea. I have noticed it trading sideways and currently do not hold a position in the index.

What would you say the signal would be for us to be able to say that it is no longer trading sideways?

I am very much a beginner at this and have just opened a CFD account with Deal For Free. As yet I haven't traded but I was intending to use the indexicator given the point gains over the last few months. I am converned however that its large easy swings have stopped.

Gary
 
Not wanting to be flippant .. but the idea of the indexicator is to follow .. not predict.

I'm learning TA .. but am in no way qualified.

Ideally the indexicator will give good entry/exit points ....and what I'm trying to do is see if there are any "obvious" TA signals using indicators to help me decide whether there will be whipsaws in the short term.

Looking back ... MACD looks pretty good spotting the change(s) in direction ... and it has recently crossed over at an extreme value ... implying that a bullish position will prevail.

Usual DYOR caveats apply.

Paul.
 
pity CMC stopped taking trades on the 250 a while back. BarNov have you found an alternative way of trading it?

Neil
 
Barnov

would echo robbers question re trading instrument.

I had developed a system for trend following FTSE250 and smallcap. I was using CMC spreadbet.

I had a few modestly successful trades when cmc mysteriously withdrew their ftse250 contract. They said this was down to lack of demand but I suspect a few more people were trading it successfully and probably at high levels which cmc probably found difficult to hegde (illiquid ftse 250 futures).

They still offer the smallcap contract (which is just as predictable as ftse 250) but their spread has increased from an initially tradeable 10 points to an impossible 25 (which swings 25 points either side of the underlying, making a potential effective spread of 50!!). As a result, I no longer trade this either.

Do they still offer FTSE250 and smallcap CFD's. If so, what is the spread? Or have you found some other trading instrument?
 
Darren/Robbers....sorry I've not replied earlier but basically I've not been trading since 2001.... daughter had brain tumour and obviously trading went by the by.. but she's fine now.. has been for some time, but only now have I got my enthusiasm back for trading.. which will be a slow methodical process.

Was suprised to see some replies to a thread that lay idle for abolsutley months.. but many ttanks for replying back in November.

Anyway, onto business..... little peeved to say the least that CMC withdrew FTSE250 and Small CAp... I even posted the other day asking if anyone knew of a broker/SB compnay who still traded the FTSE250.. but the answer seems to be a no.

So my next steps : -

1) Identify low volatility shares in FTSE350 that may have a similar pattern to FTSE250 Index where I could trade via a Deal4Free Share CFD a./c or D4F SB with reasonable spreads
2) identify any Sectors that have similar patterns to FTSE250 where I could trade using D4F SB also with reasonable spreads
3) rather than using simple x% stop loss.. see if I could make better use of the ATR(x) say ATR(10) or (ATR(14) to squeeze a few extra points out of the process
4) see what additional Filters could be built in to remove more of the whipsaws oin a sideways market . Somone suggested to me using 3&5 day SMA...

i.e. go long when 3MA>5Ma and close crosses Stop Loss
i.e. go short when 3ma < 5MA and crosses Stop Loss .

If I'm able to find shares/Indices that look similar to FTSE250.. then I'll do some backtesting usaing EXCEL....

so no positive progres to report at this stage.. but hope to find a few candidates.. and post again.. and ask for constructive criticism.

Watch this space

Paul
 
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