Best Thread Potential setups

[trader_dante]

Weekly Round up

This is my plan / thoughts for the week. I've posted some charts and a few links to the better news stories/articles of the day. As you will know, I don't follow the news but I think there is a few paragraphs of importance among the short articles included below that will help the trader prepare for future moves. All the charts I have posted are in order of the markets discussed.

Gold

Gold and Dollar are recently moving in tandem leaving a lot of traders puzzled. There is a really good article on that relationship I read this morning: Dollar and Gold Are Suddenly Inseparable - WSJ.com

I don't really have a fundamental opinion on Gold but there is a head and shoulders pattern on the daily TF and the neckline corresponds with support at $890 so a break could make things very interesting and open up for quite a move to the downside. Interestingly enough, the left and right shoulders are both comprised of the extremely strong $930 level. I'll be looking for a break and retest on either side but I fancy the downside as I think there are going to be a lot of people that bought high in the panic and are holding on without taking the loss...these people must be shaken out.

Crude

Good article on Crude here OPEC Holds Oil Output Steady - WSJ.com - particularly interested in the part about the last time Crude reached $10 and the differences between then and now...always helps you to be prepared...

The market is caught in a massive range. The lows at $32 are going to provide a decent floor but $49 is a big s/r pivot level. Between this range we are making a small upwards trending channel but one could, perhaps, construe this as a bear flag. A lot of people are talking about a breakout to the upside and higher prices to come. The way I see it, OPEC are caught in a fundamental conundum (see article) and there is not much they can do. Higher prices will screw the Global economy - lower prices will screw the producer nations...at any rate...we trade the price not the news on this thread But I think prices could range for a long time. A break to the upside could be violent as speculators jump in but I don't think it will have any real legs. I think the most likely move is a move down to $25 to really clean out everyone that is in this market.

GBP

GBP is a having a sharp move to the upside this morning. There is A LOT of significant resistance overhead with two areas where TL's line have confluence with major s/r pivots. I would be wary of piling in on the long side, this late, as in my opinion, this could turn at any time at these levels. I still think that a break below the big lows at 1.3500 is on the cards and would look for shorts at these higher levels.


Euro

The Euro has made a huge base here. Is it a bottom? I have no idea. I'm suspicious of everything. But, I do think that 1.3300 has got to be broken and price has to hold above it for this to be a bottom. I also think that, that same level will be a fantastic area to sell it back to the bottom of the range if we get there.

S&P500

Well, isn't everyone all over this? Multiple green days in a row and everyone is calling the bottom already! We're back above the old double bottom at 739 so if this holds then there could be more to come to the upside but I think 800 could well cap the move. It should almost certainly stall it for a bit.

USD/CHF

This market broke out of the major range and we are now holding above it. This looks pretty bullish to me and has a major fundamental backing it up (the SNB intervention to sell the Franc) Euro/CHF is going to be a much better play as the Dollar is getting sh*t on across the board this morning but I posted up a chart of USD/CHF as it's got a good, strong level on the Daily and the hourly (see chart next to it) is making a well defined flag pattern. Watch for a breakout (although with this Dollar weakness it may well not go yet)

USD/CAD

You guys all know where I think this is going. But the simple fact of the matter is, that until we break 1.3000 convincingly, I'm not going to get long. The pattern is still bullish though and a good play would be to get long at dynamic support e.g. TLs (as seen on chart).

Bunds

Good article on US Treasuries here: Treasurys poised for a wild ride if Fed surprises - WSJ.com which shows you what everyone is waiting for this week.

I don't have a Bund chart to hand but I am watching 123.13 area like a hawk. A proper break of this would open us up for a large move and I can see 122.21 on the cards and maybe even as low as 120.33 which is my big target.

 

[MartinC-J]

Tom/trader_dante

Thanks for replying to my message and for the link to your Potential Setups thread. I did enjoy reading your weekly roundup this morning.

I do think it would have taken you the same amount of time to answer my question as it did for you to direct me to your Setups thread.

All I wanted to know was that when you said you had seen new grads make £1k per day after training for a couple of months on a sim, did they have a platform that was markedly different from a reasonable charting package that I could get anywhere. For example, I use the IG Markets chart package which I think is good enough. Did these new grads have any better advantage than me? Or are they shown a system first and then taught how to apply it. Why couldn't I achieve what they are doing with the tools available to me?

Many thanks again

cheers

Martin

 

[TheGoose]

Martin,
That package is sufficient.

As to why you are not making money surely you can answer that yourself (if you are honest with yourself)

Unless he sat with you he is not going to be able to give you a full assessment and that would cost you a few £k I would imagine

There could be a whole host of reasons but in most cases it is not being able to run winners/cut loser and terrible risk management. Some people just aren't cut out for it.

Goose

Tom/trader_dante

Thanks for replying to my message and for the link to your Potential Setups thread. I did enjoy reading your weekly roundup this morning.

I do think it would have taken you the same amount of time to answer my question as it did for you to direct me to your Setups thread.

All I wanted to know was that when you said you had seen new grads make £1k per day after training for a couple of months on a sim, did they have a platform that was markedly different from a reasonable charting package that I could get anywhere. For example, I use the IG Markets chart package which I think is good enough. Did these new grads have any better advantage than me? Or are they shown a system first and then taught how to apply it. Why couldn't I achieve what they are doing with the tools available to me?

Many thanks again

cheers

Martin

 

[MartinC-J]

Martin,
That package is sufficient.

As to why you are not making money surely you can answer that yourself.

Unless he sat with you he is not going to be able to give you a full assessment and that would cost you a few £k I would imagine

There could be a whole host of reasons but in most cases it is not being able to run winners/cut losers. Some people just aren't cut out for it.

Goose

Goose, many thanks for replying. I am actually making money, but really I am just perfecting my way of reading the charts and the markets. I am mostly only paper trading, but am consistently doing 30 points a day scalping the FTSE. I more or less stop trading once I have reached 30 points because that is my daily target for now while I am learning. I will go live with this in the next few weeks and see for certain that I can do this when every trade has money resting on it. I accept it will be harder.

What I wanted to know originally was what expectations I should have as a FTSE scalper/day trader. Tom had posted that he had seen new grads making £1k per day after a few months trading on a sim. I replied asking what edge they had that I didn't have available to me on something like IG's charting package? I just would like to know if they are doing anything different to the rest of us. I am a property developer who has traded shares for more than 10 years but never have devoted so much time to daytrading anything. So I am just trying to gauge expectations.

Thanks again.

cheers

Martin

 

[trader_dante]

I do think it would have taken you the same amount of time to answer my question as it did for you to direct me to your Setups thread.

Hi Martin, thanks for posting. The main reason I suggested you come here and post rather than PM'ing me is that I get a lot of the same questions day in, day out, so I am now sending out a generic mail to everyone telling them to post messages here as I know the others on here are kind enough to help me out if I am busy.

All I wanted to know was that when you said you had seen new grads make £1k per day after training for a couple of months on a sim, did they have a platform that was markedly different from a reasonable charting package that I could get anywhere. For example, I use the IG Markets chart package which I think is good enough. Did these new grads have any better advantage than me? Or are they shown a system first and then taught how to apply it. Why couldn't I achieve what they are doing with the tools available to me?

For charting they use CQG. The feed comes direct from Liffe for the FTSE so it will be the most accurate feed out there (rather than IG's which is their own price, I believe based on the underlying) BUT for all intents and purposes, IG will be fine for you.

The grads are not shown a system and don't have one. None of them. They are discretionary traders...but they have one advantage over you. They can read the order book which you don't have with IG. You would need to use a broker like Alaron etc to get the platform we have here which is TT Trader. (although there are others that show the order book).

You may find the order book doesn't help you but all the grads here that make £1k+ per day rely on it. You can look at the charts and see what and how people are bidding and offering.

In addition they only have a 0.5 tick spread rather than what you will have (1 or sometimes even 2). You may not think 0.5 ticks makes any difference but I think it does for a lot of these guys who are scalpers in the truest sense of the word.

They are not, for the most part, looking at a chart and saying, "green candle and moving average cross, plus macd and rsi pointing up, go long on the 5m chart, risk 10 ticks, target 30 ticks" or anything like that.

They are looking at the order book and saying "big level here on the hourly...price trading into it...someone sitting on the bid with 100 lots...people hitting the bid to try and take him out...he's not budging....quick front run his size....take it up 3 or 4 full ticks...now it's stalling...he's being hit again hard...he's taken out but immediately reloaded another 100...that's being hit hard...join the offer and hit him...blip down 10 half ticks....cut a few, run the rest" ...etc etc

 

[TheGoose]

Martin,

Don't worry about what they are doing, worry about yourself. Completely different environments too.

If you are making consistent profits, build up your capital and slowly increase your size. £33 a point x 30 pts and you're making a grand a day.

If only it were that easy, you will find paper trading completely different.

You're already doing better than most property developers I know who simply did nothing for 10 years, went mental in a boom, made loads of money and then bought shares thinking they only ever go one way.

Anyway, enough of that, there's plenty of info on other threads. Back to potential setups... any thoughts on cable? (l'm going against Dante again, more out of hope, off to America next week)

 

[chilltrader]

"big level here on the hourly...5m trading into it...someone sitting on the bid with 100 lots...people hitting the bid to try and take him out...he's not budging....quick front run his size....take it up 3 or 4 full ticks...now it's stalling...he's being hit again hard...he's taken out but immediately reloaded another 100...that's being hit hard...join the offer and hit him...blip down 10 half ticks....cut a few, run the rest"

bloody 'ell!

what does all that mean in English then?

 

[KillPhil08]

Not completely sure yet goose. When cable trended up to 1.5000 it broke the top of the channel several times which led to heavy selling. I think I might do the same here.

Very short term I reckon 14163, 14074 could be played off (if this is a top/retracement area). I just got out of my longs and will be looking for the next play.

What I am looking at is GBPJPY on an uptrend right now (which might break), And USDJPY slightly bullish imo.

Finally i'm short eurgbp off the very important number 9190(area).


/bear in mind, these are very short term calls!!!/

 

[trader_dante]

"big level here on the hourly...5m trading into it...someone sitting on the bid with 100 lots...people hitting the bid to try and take him out...he's not budging....quick front run his size....take it up 3 or 4 full ticks...now it's stalling...he's being hit again hard...he's taken out but immediately reloaded another 100...that's being hit hard...join the offer and hit him...blip down 10 half ticks....cut a few, run the rest"

bloody 'ell!

what does all that mean in English then?

Big level here on the hourly...5m trading into it...someone sitting on the bid with 100 lots...people hitting the bid to try and take him out...he's not budging....quick front run his size....take it up 3 or 4 full ticks...

It means when the price comes into the level...someone is, (all hypothetically) bidding...therefore they are trying to buy. Someone would take note of a trader trying to buy 100 lots because the FTSE futures are quite thin and 100 lots would run the price up a fair bit...now people are selling into this buyer...but he is staying put and accumulating... if someone offers to sell 10 he buys it...if someone offers another 2 and then 3 and then 4...be buys it all until his order is filled. Now when the locals see that someone is going to buy 100 and he is not a spoof and he is not budging...they buy because they know price will move up.

Now it's stalling...he's being hit again hard...he's taken out but immediately reloaded another 100...that's being hit hard...join the offer and hit him...blip down 10 half ticks....cut a few, run the rest

As price moves up the buying dies down and then returns to where the buyer came in...he puts another 100 up lets say and again the same thing happens...people sell and he buys off them...when 100 have gone through from one seller or many (you could have 100 different traders all selling 1 lots or one trader doing 100) then he RELOADS. He just puts in another order to buy 100. The market CANNOT go a single tick down until someone takes that 100 off him. But people do hit him and then his order gets taken and as it gets taken, the market quickly falls because there are perhaps no orders below him for the meantime...the local here then cuts half on the initial trade which was placed because of what he saw in the order book...and runs half to see if the new move down has any legs and a nice move will develop.

That's what it all means...

 

[MartinC-J]

Hi Martin, thanks for posting. The main reason I suggested you come here and post rather than PM'ing me is that I get a lot of the same questions day in, day out, so I am now sending out a generic mail to everyone telling them to post messages here as I know the others on here are kind enough to help me out if I am busy.


Tom

That's a really super answer and was the kind of thing I was looking for. I am aware that what I am doing is fairly neanderthal by comparison, but it is a steep learning curve and you have to start somewhere. I am happy with my success rate for now, but it will have to be improved and perfected when the real money is at stake.

cheers

Martin

 

[MartinC-J]

Martin,

Don't worry about what they are doing, worry about yourself. Completely different environments too.

If you are making consistent profits, build up your capital and slowly increase your size. £33 a point x 30 pts and you're making a grand a day.

If only it were that easy, you will find paper trading completely different.



Goose

That's the plan to slowly increase contract size. If it works at £2 a point then it should at £20 a point. I have assets I can throw at this, and will add more depending on success. I just want a few more weeks to confirm my rules and psychology. I shouldn't have a problem taking losses. I know it is part of trading. Regarding the traders in the city, I didn't know how they approached the market and what their thought process was as a result of the information they have available, and what information are they looking at that I don't have access to. Tom has answered that clearly for me. As for property development, I am looking at stuff, but I think we have another 10% drop at minimum in Surrey/Hants borders and it really has to be a good deal to get me interested. I am happy focusing on the stock market for the next couple of years, if not longer.

cheers

Martin

 

[KillPhil08]

Dante, out of interest, are you still in that ftse long? Sorry If i missed a post saying you closed it...I just want to see how your 1h stoploss strat works.

 

[trader_dante]

Dante, out of interest, are you still in that ftse long? Sorry If i missed a post saying you closed it...I just want to see how your 1h stoploss strat works.

Not in the FTSE long.

 

[KillPhil08]

Thanks. My Bad.

 

[TheGoose]

Not in the FTSE long.

You should be

 

[trader_dante]

You should be

I was in the SMI. Same thing. Different country. Stop loss policy has worked like a dream. Again!

 

[TheGoose]

I was in the SMI. Same thing. Different country. Stop loss policy has worked like a dream. Again!

SMI has gone up more in percentage terms, was a great trade that, I remember your post as I was looking at taking it but thought I had too much exposure on the long side.

 

[trader_dante]

Phil, have you noticed any slippage with VDM?

I just got slipped badly on a buy entry order on the Bund...I've never been slipped on the Bund in the direct market doing size with a stop MARKET, let alone doing some paltry sum with an SB company...I hope they aren't trying to take the p*ss because I am cleaning up with them!

 

[omni]

Phil, have you noticed any slippage with VDM?

I just got slipped badly on a buy entry order on the Bund...I've never been slipped on the Bund in the direct market doing size with a stop MARKET, let alone doing some paltry sum with an SB company...I hope they aren't trying to take the p*ss because I am cleaning up with them!

Sounds like you have been fked.
Giv'em a call.... can guage the firm by the attitude you get or do not get.
That's what i have found.

 

[KillPhil08]

A while ago when ftse was rallying, i got an entry that wasnt even on the charts yet. Only the once, I'm going to run it back up again.

Hopefully they aren't trying to **** you over.

Sterling is fantastic today, really easy to read.

Goodluck all.