Early trading FTSE volatility

[jonback200]

I have been trading the FTSE using a well known spread betting firm for about two months now. Although a novice, I have managed to make some reasonable profits. My technique is simple. After the opening of the stock exchange the FTSE seems to behave in an entirely predictable way. It shoots off in one direction for between 5-20 points, then promptly heads the other way. Well anyway, I didn't take me long to realise that this kind of predictability is easily exploited - I just wait for the initial move
to run out of steam, then jump on for the return journey. Anyone else noticed this? This price action does not occur absolutely every day, but often enough to be a nice little banker.

 

[oatman]

I've used this as well. I think it tends to follow the US call initially and then London influences come into play and correct the move.

 

[TheBramble]

The early fade is quite predictable, but the tradeable points in it between confirmed 'out of steam' to 'which way next' doesn't look too good in the risk:reward area on historical analysis.

 

[jonback200]

I agree bout US influence. Re. points available, etc., early morning trading seems to offer the greatest volatility and hence the greatest potential rewards. If u have the discipline to get out if the market moves against u I think it's a quick buck before breakfast. I'd rather trade at 8 than at 12:30 when the Footsie is often is stagnating.

 

[TheBramble]

It's not really a case of discipline (you'll need that in ANY trading endeavour) - it's simply that that risk:reward (historically) is not attractive.