FTSE 100 intraday trading - JULY 2003

[bonsai]

cash tends to move more slowly and is easier to read.
reversals tend to be more clear cut.
fib/gann trend lines seem to work better.
gaps seem to be more meaningful.
etc

Entry signals are too many to set out and then explain
in this medium. There are all the usual ones like macd o/b o/s etc
But if I said to you that I am thinking of going short because
my 360 has just been broken , it would have little meaning
without my writing a book to explain. ?
And you couldnt replicate it on Sierra anyway.

I think my original post was on the original thread. But it didnt say a great deal.

 

[bonsai]

jonny
if you want real pain
watch henman.
ouch

 

[kevin546]

Bonsai,

Thanks and maybe you should right a book about it as it sounds very interesting and you have put a lot of thought into it, (but then I am a biased chartist- LOL)

I am intrigued by your account of the cash chart. I do have access to this through Mytrack but was considering closing my account now that I have data from IB for the futures. I have to pay the LIFFE exchange in order to trade so I assumed it would be best to chart the futures prices. I thought there could also be some discrepancies. I think on one occasion one of the charts produced a significantly higher price than the other. Have you any experience of this, otherwise I take they are like for like in terms of direction. Presumably you do not trade for short term but the majority of a trending move. If I followed the cash price could I get caught out on some missed action with the Futures price because the cash has turned later or earlier than the futures price.

Kevin

 

[kevin546]

Jonny

Sorry you are suffering, get well soon

 

[bonsai]

kevin
I classify myself as a day swing trader, if that helps.
there are often only 2 swings per day.
definitely not looking to scalp 5 pts here and there.
that smacks to me more of gambling than trading.
But I do have a futures feed as well, so I do know what is happening in that market.

We probably hae completely different trading approaches.
So all I am saying is that charting the cash and trading the
futures works for me.



PS: a lot of what I do is in the Piper book.
Read the bit about low risk entries.

 

[kevin546]

Bonsai

Thanks for the explanation and tip, I am trying not to read ahead but will look forward to the section you mention. 2 trades a day that will keep the costs down. I am beginning to think that my trend approach which produces about 3 to 6 deals a day is less frantic and expensive. If you do not mind me asking how does your SB trade differ from your futures. Is it a longer hold and if so how do you deal with the wider price range that the SB prices produce while the US is open.

Often you can take a good trend signal in the UK pm only to find that the US has reversed during its own session and the cash SB price has followed suit putting on 50+ points and yet the next day the original trend resumes although you may have been stopped out. Something I have avoided unless I played for just £1 a point.

Kevin

 

[bonsai]

kevin
yea, its just a longer trend trade and will hold until hit during
normal hours.
But I only put on the trade when I see a reversal at a significant
chart level like 4219 a few days ago.

doesnt matter what the prices are while the US is open, its all
part of the game.

not sure I wouldnt consider 6 trades a day a bit frantic.
there are not that many clear stops available.

I would probably lose on 3 of them and be worse off than need
be and then I would be glad to see the end of the day.

 

[bonsai]

Perhaps this chart will help to illustrate.
when we lost the top channel trend line, I went short sept futs.
when 4100 failed I was able to draw trend line down
I will now hold until that trend line is broken during
normal trading hours regardless of intervening price quotes.
They are simply not in play !

But that sort of trade is not really intended for this thread which
is about intra day trading ?

Sorry, put up wrong chart. This is the correct one.

 

[kevin546]

Bonsai

Thanks for the chat this afternoon found it interesting. My reference to frantic trading was with regard to my 5 + points approach (trading within the trend) while it does work can produce a more frantic style of trading with around 10 - 20 deals for the complete session. Trading just the trends of the day only about 3 - 6 and often less would be less frantic. However I will have a good read over the next few days and who knows maybe I will revert to just 2 trades.

Kevin

 

[bonsai]

I'm with you now

Although I say so myself, I think you would find it more profitable too.
The only requirement is finding an indicator which gives you
2 or 3 signals a day and fairly close MARKET stops.

It doesnt pay to create artificial stops because that usually gets
you in too early.

 

[kevin546]

Bonsai

Just noticed your last post with the charts - thank you. I can see from your May to June chart my own intraday system would have produced a sell at the second fail around 4160 unless when the top channel failed the RSI displayed a clear failure swing.

As a matter of interest what would have been your entry point for the original rise from the lows.

On holding a futures deal for more than a day trade I can see that come 5.30pm the price will not change until the mark up or down the next day. Do you trade SB for longer holds or just for day trade swings. It is the way that SB price can dramatically change during an out of hours sessions that has put me off. I would only feel comfortable placing a very small deal which hardly seems worth the bother when you can pick up points the next session day trading without other exposure. How wide a stop do you use or is it based as in the case of your sell the previous high at around 4200. From your experience of trading Futures is there much in the way of costs when holding a buy for some time, say one contract. I ask because it is something I no little about and have not contemplated before but must admit I may consider such a position with Futures rather than SB.

Kevin

ps thanks for posting your charts - its good to talk

 

[kevin546]

Bonsai,

I meant to ask what is the time frame of the chart on the right May/Jun and can you clarify what the settings are for the SMA's (I assume that's what they are).

So if memory serves me correctly you are working from a 2 and 60 min perspective covering a number of days.

Also correct me if I have this wrong but you trade Futures for longer positions and swing day trade using SB.

I ask this because until recently I was using SB (D4F) as my only form of trading but due to slow fills on larger deals and re-quotes I decided the smaller spread and instant fill of IB (direct access broker) would be better. Now that I have introduced a less frantic addition to my trading by trading the trends of the day there is less to chose from them apart from the large order. I would be interested in your reasoning.

ps . It would appear Mytrack had another failure today went to have a look at the intraday charts and found that they only kicked in from 2.30pm. They do seem to have some problems.
I am very impressed with the clarity of your charts.

Kevin

 

[Fluke]

Bonsai.
I must be one of a large number of followers of your threads on trade 2 win.My TA experience has improved quite considerably since I have been following you.I thought you only traded on a daily basis,but notice from you threads to day,you also trade longer time frames.Therefore would it be possible for you to set up another post to cover a longer time span than just one day.
For example,this could be any thing from a few days to several weeks.
I am sure there must be a lot of other followers that would like you to do this.
My plan,is to trade the FTSE futures,say 3 or 6 months and when I am good enough,then day trade.Please do not just say no to this,but please think it over.
Kind regards.

PS if any other member would like this,perhaps they would add their thoughts on this.

 

[bonsai]

kevin
I went long at 3652. at that moment my stop was 3598.
but I risked it because ther had been a higher low on my
momentum chart and the H&S had been completed.Also it
bounced up off the down trend line from 4230.

I use sb's for futures. Dont see any problems with that.
The reasoning is mainly tax and convenience.
The spread hardly features in a long trade. And is not
really a problem with swing day trades. Dont forget
the bias can work in your favour on closing.

The sb's tend to play ducks and drakes with prices after
market close.
Worrying about that might be micro managing the trade ?
Remember that come morning, it must always return to
somewhere around the cash close the previous day.

Stops are nearly always based on market action.
That is Highs or Lows at some significant point. others might
call them pivots. I think of them as elliott waves.

The stop for my 4200 short was 4219. So that was more
comfortable and something of a gimme.

All the charts in my last post were Hourly Charts.

I have now noticed that I posted a test chart and not my working
chart ; so I have gone back and posted the correct one.
The sma's are 5 and 8 days as is the macd.

 

[kevin546]

Bonsai,

Thanks for taking the time to reply. For what it is worth applying my own daytrading trendline approach to your chart I would have considered either the trend break at just below 3600 or the pivot again just below 3600. My stop now that's another matter and something I cannot address without reading Piper's book. LOL

As for SB and holding long term I can still see that you could easily have a stop loss in place with the company at a reliable position and still get stopped out if the US market really moves because at these times the FTSE cash price of D4F appears to follow the S&P move for move. I realise that by the next day things maybe different but if I have placed a stop with D4F then under these circumstances I would expect to be stopped. As an example how often have you seen the DOW change and put over 100 points on. Last night was a bit of a run but the D4F price moved about 70 points from the close. I just feel in the early stages of a long term trade this would be the risky part once you have a bit of daylight then managing the position must become easier. I feel that because the Futures are closed from 5.30pm there is no other chance of your deal being stopped with the US doing a large M , V or W trend. Only the mark up/down the next day and during the session will you have to concern yourself with this problem.

Unless I have completely misunderstood the workings of the SB business.

Kevin

 

[bonsai]

Thinkyou have assumed that I place stop orders?

I cant get stopped out by anybody but myself.
I very very very rarely use d4f stop system.
Don't want to. Don't trust it.
That goes for other sb's as well.

btw, despite the dow's climb today
ftse is now on offer at 18/21
so I dont know what they did with prices while the dow was open
but ftse seems to have come back, as it usually does.
In fact there is often a good trading opportunity in that sequence.

 

[bonsai]

Wednesday July 2nd

Another mucky day with the mm's stealing most of the points
at the open followed by a degree of whipsaw later on.
But once again the macd is your friend (with a bit of help
from elliott)
Some very odd goings on with the Winners and Losers.
Maybe all will be revealed tomorrow ?
Well done anybody who made money today.

 

[kevin546]

Bonsai,

Thanks for that as I suspect I hold the same view re SB and stops as you do but how do you guard against a large loss early on in the open position. If you are trading each day then you are able to keep an eye on it unlike me. Still trying to do this around the 'day job'.

Do you have the same regard for stops with IB (I am assuming you these for your futures trades.)

When you place a deal with D4F or other SB do you take the cash position or the month /quarter.

Sorry about this bombardment just like your opinion if I am to consider this more seriously. I know ne chap who was trading full time in several stocks that he remained glued to including the FTSE index. He used a month chart (I mean the last 30 days) on a daily chart. He then looked at each trend change and played each one holding for a few days to weeks with each trend.

I did look at considering the daily bar and using this for trend breaks from one or a few days at a time for intraday entry but found the breaks could be swallowed up by the mark up or down and did not happen within the first few hours but often towards the end of day. Hence my concern of longer positions with SB. A cut of the trend within the last 45 min of UK trading often resulted with a loss the next day. However I suspect I was not making good use of stop positions. Fortunately I paper traded and never went live.

Kevin

 

[bonsai]

if you are trading around a dayjob, then I have to
pass on everything. I would be out of my depth suggesting
anything.
I simply have no experience of trying to do that.

for a long trade I use monthly or quarterly futures and
then try and leave it alone.
If I have the wave count right, dont usually get my stop hit
although it has come within 2pts once or twice.
If it hits my stop, I am out pronto because I have obviously got it wrong.

I always control my own stops, whoever I am trading with.
Spikes happen both up and down, it is a favourite set-up move
by bigger traders/market makers often 10 mins before dow opens and then almost immediately reverses.
They simply withdraw their order book until the dow opens.

Oh, and I ignore the auction as well.

 

[bonsai]

fluke
thanks for your suppotive comments. Its nice to be appreciated.

On the longer time frame, I think we are all hostage to
fortune.
I have no special insights as to where the market is going !
And I firmly believe no-one else knows either.
In the longer time frame none of the indicators work most of the
time
For example, if you follow the U.S commentators, just look at the
confusion that exists on the Dow !


I do have some 'thoughts' and I record these in my journal
from time to time together with some cryptic clues.

But as for starting a thread, I really wouldnt know what to add.

so I am afraid the answer must be in the negative.

sorry