is swing trading basically trading the ftse ?

[truegent]

Hi everyone,

I have been keeping my eye on the FTSE and also all 'trending' stocks, by this I mean stocks that have broken their 52 week share price, most of these result in a trending stock.

What has become apparent is that stocks in general rise and fall with the FTSE anyway. So lets say I'm trying to trade pullbacks (which I am) - I identify my setups (stocks that have pulled back for a few days), then the following day I wait for the trigger. Lets say ive gone long on a stock, and the trigger gets hit.... what I am finding is that after this point for the following days, the price will continue up, or reverse and go back down, depending on what the FTSE does !

Its like basically trying to predict the FTSE !

Any advice here ?

 

[dbphoenix]

You have it reversed. The indices move as they do due to the underlying. They are in effect ETFs for the groups of stocks which they represent -- 500 for the ES, 100 for the NQ, etc. If you don't want to fool around with analyzing dozens of stocks, an index like the FTSE can act as a "basket".

Prediction is of course a waste of time. If you're swing trading, you have some reason -- other than a guess -- to expect that price will swing in the desired direction. If whatever reason you have does not result in anything better than a 50:50 outcome, then revisit your criteria for taking trades.

 

[tomorton]

Yes its very difficult to get into a trade that opposes the FTSE. Its like trying to swim to seawards when the tide is coming in, but when the tide's going out its easy. On top of which, the FTSE itself tends to follow the Dow and S&P, so its hard to do well if you're opposing all that money. The advantage of trading stocks directly is that their % changes can be more powerful than the index's, but this also means the risk is higher.

 

[timsk]

Its like basically trying to predict the FTSE !
Any advice here ?

Hi truegent,
Welcome to T2W.

I used to trade U.S. equities years ago and made the switch to indices pretty much for the reason you outline. I spent so much time taking my cue from the YM (the Dow e-mini) that I thought I may as well just trade that. However, that's not to say you'd be better off doing the same thing. As Mr. Charts likes to point out, when traders of indices are tearing out their hair with boredom and frustration because nothing is happening, equities traders have a universe of thousands of stocks to choose from. Usually, something somewhere is making a decent move from which they can potentially profit - if they can find it!

In your shoes, I'd think about all the pros and cons of trading stocks Vs indices and, if you elect to stick with stocks, you'll know what it is that you like about them and what they offer that indices (or another market altogether) can't offer. There's no right or wrong; it's horses for courses, one man's meat is another man's poison etc.
Tim.

 

[dbphoenix]

Food for thought:

The one who profits is not the one who learns in the morning and then acts on that knowledge, but the person who anticipated such opening action the afternoon before. If he has bought near the close, and all the overnight "news" points to a higher opening thereby exciting those who believe they "know" something significant, he can sell to our hero's excited buy order as the market opens higher in New York. One of the problems -- indeed, the major problem -- with those amateur traders who plug in all their software at night to try to get computer-generated signals as to what to do the next morning is that they end up buying from (or selling to) the professionals who have already taken the risk the night before and who, by doing so, have created the very inputs that produce computerized signals that evening. A little knowledge, as they say, is a dangerous thing.

--Justin Mamis

 

[truegent]

Thanks for all your answers !