Best FTSE / DOW Indicators?

[OlympicBlue]

Like many here I am new to this and would welcome any advice on what indicators I could or should be applying for day trading the FTSE & DOW?

I have looked at the forum in depth and the array of opinions differ enormously almost to the point where I have written down and copied so much information my head hurts!

To date I have only paper traded FTSE & DOW day charts using trend lines to establish directional movement /moving trends for the possible buy/sell positions.

From what I have read etc. my prefernce would then be to buy or sell the position with a spread betting firm like I G Ind'x.

Any help advice would be greatly appreciated.

 

[Lord Flasheart]

Lol there is so such good stuff on this the only problem is finding it. IMO as a new trader my advice would be to watch the market and learn its patterns and price action to begin with. Then Id really work out a plan as discipline and money manaegment are the most important things to learn. A simple moving average can reap rewards if used correctly.

 

[OlympicBlue]

"A simple moving average can reap rewards if used correctly"

Do you have a preference?

Thanks

 

[Lord Flasheart]

I really wouldnt know where to begin,have you a data feed,what times scale are you wanting to trade,how many trades a day,are you just spread betting indexes etc.etc

 

[OlympicBlue]

I really wouldnt know where to begin,have you a data feed,what times scale are you wanting to trade,how many trades a day,are you just spread betting indexes etc.etc

Julian,

Thanks for responding, here are some answers to your questions:-

Basically, at the moment I have been ‘paper trading’ the FTSE & DOW utilising ADVFN’s site to monitor FTSE & DOW movement using the feed and charting services that they provide. The FTSE is a delayed feed (15min) and the DOW feed is live.

The charts have various tools that can be applied but presently I have only used the most basic of these such as setting up parallel lines/fans etc. to establish trending bands and a sense of direction with consideration also given to market sentiment, news, announcements etc.

As I work from home, I would like to be in a position to be able to take advantage of the FTSE/DOW rise or fall by buying/selling the position(s) with a spread betting firm such IG Ind’x, or CMC.

As for data feed, once signed up, I understand that a comprehensive trading platform would be made available to me by IG or CMC (I have seen CMC’s) and hence why I looked at the ADVFN site to try and gain an insight of charts and what to expect. This in turn led me to this site.

So in summary, to begin with, I would like to be able to trade the FTSE and DOW on the daily movement and be able to back up my observations/judgements with the indicators/tools that an experienced trader would use – like the moving average that you mention – although I would need advice and guidance how to set up/best used.

As for the number of daily trades I would wish to carry out - I cannot clearly say as I would assume, having the correct setup to be able to capitalise on the identified movement would determine this followed by confidence.

Once I felt comfortable I would then possibly consider taking on other trades in other markets, but initially my focus is drawn towards the FTSE and DOW.

Thanks again.

 

[Lord Flasheart]

First thing id do is have a free trial on esignal or cqg as a data feed. That will give you an idea as to what to expect. You cant trade anything with a 15 min delay. Esignal is cheaper and great value, cqg is the rolls royce of data feeds, Ideally you need at least 2 monitors(one for datafeed 1 for trading platform), i have 5. You can start with a spreadbet firm for very small amounts. The beauty about esignal is that it will give you a month to play around with indicators and get you hooked.It is also about 1000 times better than cmcs data and graphs..But cmc are as good as any sb firm to trade with.It will cost you about £20 for the exchange fees for ftse, the dow is free i beleive. I personally use price action,volume,tick data, and rsi.One monitor is ample for the trial.

 

[OlympicBlue]

First thing id do is have a free trial on esignal or cqg as a data feed. That will give you an idea as to what to expect. You cant trade anything with a 15 min delay. Esignal is cheaper and great value, cqg is the rolls royce of data feeds, Ideally you need at least 2 monitors(one for datafeed 1 for trading platform), i have 5. You can start with a spreadbet firm for very small amounts. The beauty about esignal is that it will give you a month to play around with indicators and get you hooked.It is also about 1000 times better than cmcs data and graphs..But cmc are as good as any sb firm to trade with.It will cost you about £20 for the exchange fees for ftse, the dow is free i beleive. I personally use price action,volume,tick data, and rsi.One monitor is ample for the trial.

Julian,

Thanks for your time.

I have taken a look at both sites.

It is interesting what you say about having (ideally) separate monitors. I had just assumed could operate say CMC’s spread betting platform on one tab of the internet browser and say e-signals feed on another? Presumably you operate separate monitors so you don’t have to switch between page tabs in your browser and miss something?

Surprised to hear how much better a nominated data-feed platform like e-signal would be than a platform supplied by CMC. I would assume this applies to similar package companies like IG Index and therefore better to keep separate platforms? In my naivety and being curious, would the additional information that e-signal could offer me (a novice) be warranted? I assume the £20 approx. price mentioned would relate to the service charge for the feed – per month?

Regarding the indicators that you have mentioned, are these generic terms or are these the actual named indicators that I could find and set up using the e-signal software?

And just finally, what is your view about using an advisory service for trades?

The reason I ask this is because I have been contacted by one or two companies who say that I should consider trading CFD’s because they would enable ‘full market access’ and better prices – although my view is that the spread offered by spead betting companies is pretty narrow anyway.

As I see it, with an advisory service, I would be reliant upon their recommendations and research and what with their charges whether this be commissions or spread and then tax to pay, it just seems simpler to operate a spread betting account for my first ventures.

Any additional comments you could make would be greatly received.

Thanks again.

 

[oiltanker]

i believe ig is free to open an account ie you don't need to put money in to open. the charts there are plenty good enough?

as everyone will say paper trading is not the same as money. whatever the system keep it simple. greed and fear are the two dragons to, if not slay, at least sedate.

 

[OlympicBlue]

i believe ig is free to open an account ie you don't need to put money in to open. the charts there are plenty good enough?

as everyone will say paper trading is not the same as money. whatever the system keep it simple. greed and fear are the two dragons to, if not slay, at least sedate.

Thanks for your comments,

Yes, having looked at IG ‘x site it is free to open and you can start trading as a novice using their ‘trade-sense’ option for as little as 10p/point.

Take your point about greed and fear. I am all too aware how you can get bitten having lost several thousand pounds about ten years ago trading - (very naively) – options with a broker before the days of home PC’s, trading platforms and sites like this.

Will tread cautiously as this is my first venture into the markets since then.

Sounds like you have dealt with the IG spread betting platform?

 

[tolland]

Thanks for your comments,

Yes, having looked at IG ‘x site it is free to open and you can start trading as a novice using their ‘trade-sense’ option for as little as 10p/point.

So far, I've found the igmarkets web platform pretty limited, and the charts are something of a "bolt on" - they should really integrate the charts into the windowing system, and indeed polish the resizing and layout tools. (I've also had some problems with the trailing stops feature, and I'm still trying to resolve it)

Though I've not found a better web based CFDs platform (not nasty java apps), I would be very interested if there are any others anyone can suggest?

Cheers,

T

 

[Lord Flasheart]

I would never pay for a signal service,if it worked wed all do it. IGs chart are reflective of their price and not the market. They are totall rubbish,late and useless compared to esignal,tradestation or cqg..The only cost you will pay during your trial is for the exchange fees.If you are going to be trader the £80 a month I pay for data and exchanges fees feed is well worth while. Two monitors is just for ease of use,and for multiple time scales.I dont know many succesfull traders on this site who use one monitor and igs data feed.The cost of setting up another monitor is minimal. But as I said earlier have a free trial with esignal and then reasses the situation.

 

[vergis92]

Like many here I am new to this and would welcome any advice on what indicators I could or should be applying for day trading the FTSE & DOW?

I have looked at the forum in depth and the array of opinions differ enormously almost to the point where I have written down and copied so much information my head hurts!

To date I have only paper traded FTSE & DOW day charts using trend lines to establish directional movement /moving trends for the possible buy/sell positions.

From what I have read etc. my prefernce would then be to buy or sell the position with a spread betting firm like I G Ind'x.

Any help advice would be greatly appreciated.

I advise against daytrading, however I do use shortterm indicators in my swing
trading, look for the day of the week factor, morning/afternoon trend symetry,
and the 200 bar average for like 30min and 15 min charts, but not shorter,
also advencing issues vs declining issues,

indicators not to use are:
RSI, MACD ....your possible persception of news releases, ignore news altogether!

 

[vergis92]

The 200 bar moving average is a killer indicator on daily, hourly charts because everyone
believes in them, even government economists and Fed bank people, you don't have to look
at it real time, just prior to market open to determine if a rally/decline is likely over the next few
days

 

[Hoggums]

The 200 bar moving average is a killer indicator on daily, hourly charts because everyone
believes in them, even government economists and Fed bank people, you don't have to look
at it real time, just prior to market open to determine if a rally/decline is likely over the next few
days

a 200 day moving average?? You've got to be kidding.

 

[vergis92]

a 200 day moving average?? You've got to be kidding.

The 200 bar average, it works on all time frames from daily to 30min,

daytraders claim to use it on 60min and 30 min charts to determine what's to come
in the next session/next few hours,

I was a bit sceptical about moving averages, and if the slope matters but it does
appear that successful traders do watch it, The 200 day average is watched
by investors and traders

 

[TheGoose]

the 200 day moving average on he Dow is above 11,500.

How does that help your trading?

 

[vergis92]

the 200 day moving average on he Dow is above 11,500.

How does that help your trading?

it doesn't help now, except when it crossed over,

I'm now looking at 200 bar average on 180, 60 and 30 min not 200 day!

and also seems to work with currencies, check euro/dollar and how the lows
occured right on 200 day ma last year,


I didn't really believe in averages, but it was recommneded by some floor trader,
claiming it's the most watched average, I have stopped paying attention to
all other averages like 10 day, 9 day.. or 14 day.


So is it a lagging indicator? I don't know, but I get suspicious at near crossover levels,
and I use it with the day of the week indicator and some other leading ones.

if it really proves to be a widely watched average then it is bit of a leading indicator,
I'm just not clear if they take into account the slope.

I know they are not using RSI, MACD or price derived oscilators, that's for sure!

 

[TheGoose]

Thanks for your response, I will keep an eye on it.

Interesting point you raise though, as I have been sent some TA from a new broker today and that is the only MA they have on their graphs.

Back on the Dow, looking around May time, what I would say is that it never really crossed through it, it was already under the 200 MA but then had a brief look through it.

I wouldn't have been comfortable trading with it.

Ian

 

[OlympicBlue]

So far, I've found the igmarkets web platform pretty limited, and the charts are something of a "bolt on" - they should really integrate the charts into the windowing system, and indeed polish the resizing and layout tools. (I've also had some problems with the trailing stops feature, and I'm still trying to resolve it)

Though I've not found a better web based CFDs platform (not nasty java apps), I would be very interested if there are any others anyone can suggest?

Cheers,

T

Hi, Thanks for your comments.

This is just what Julian has said.

Also looking back at some information I took off the Investors Chronicle site recently, there is an article on there about a woman who has turned her diary she kept when starting up – into a book.

The article (in the Investors Chronicle) states:-

Having the right technology is an important part of Sally's new, disciplined approach. "It really is worth having real-time prices on a separate, robust programme, rather than a spread betting firm's own platform. I also get my news through this channel. My package - Sharescope Pro - costs me £85 a month, but it pays for itself. Market intelligence is worth paying for."

Like Julian kindly pointed out - e-signal will offer a month’s free trial and for what it is worth I have since found out that the above package Sharescope Pro – highlighted in the above article – can also be trialled by using a link featured on Sally Nicholls website.

So there are now two to choose from and potentially two months free trial time to be had.

 

[OlympicBlue]

I would never pay for a signal service,if it worked wed all do it. IGs chart are reflective of their price and not the market. They are totall rubbish,late and useless compared to esignal,tradestation or cqg..The only cost you will pay during your trial is for the exchange fees.If you are going to be trader the £80 a month I pay for data and exchanges fees feed is well worth while. Two monitors is just for ease of use,and for multiple time scales.I dont know many succesfull traders on this site who use one monitor and igs data feed.The cost of setting up another monitor is minimal. But as I said earlier have a free trial with esignal and then reasses the situation.

Julian thanks for responding.

When you say you would never pay for a signal service – I assume you mean a service supplied on a platform supplied by a spread betting firm?

If so, I was only ever going to take advantage of the services offered by CMC/IG etc which I assumed were free anyway.

However, given your comments, it makes sense to start with the right tools and if that means operating with e-signals service – which as you pointed out I could do free for a month – or, Sharesope Pro - which I have found to be available also on trial – this is what’ll do.

Just finally, the indicators that you previously mentioned were these just the generic names or the actual name of the indicators that I could expect to find on the e-signal / Sharescope Pro software?

Thanks again.