swingin' the ftse: 2008

[tomorton]

Yes I'm also confident of further push up Monday - Dow was strong in evening trade, volatility has fallen nicely and stochastic nowhere near overbought.

Hi wallstreet1928 - One effect recent volatility has had on my mindset is to make me no longer confident of my own predictions of FTSE S/R levels, they've all been blown away. I also have to conclude that S/R on our FTSE is actually driven by S/R on the S&P. Of course, if I see resistance actually winning the battle, I'll be short with you.

 

[DeeGee]

Hi all
Only been trading a few months and first post, so please be gentle with me.

I'm seeing a macd bearish divergence over the last 4 hours of Friday to 8pm on a 5min chart.
Do you guys think this is too short a timeframe to go short first thing on Monday?
RSI is not really confirming this. Any views welcome

DeeGee

 

[Splitlink]

I think that first thing on Monday morning may be too late to get into the market, what do the others think? I can never seem to catch anything much good on the open, anyway.

I notice a breakout on the daily that may turn out to be false so, if the first movement is up then you might find the top and short from there by using the 5' chart.

I have to have more proof that this is a possible breakout on the long side before I change my bear stance. I am looking for a place to short but, be careful with the presidential election.

 

[tomorton]

Hello Split -

Not wishing to comment too specifically on Monday (I am already long anyway) but I notice that none of the 7 patterns that I rely on require an entry on the Open - 5 require an entry based on the closing price, the remaining 2 are triggered by breach of a previous High or Low. the Open is where amateurs trade, the professionals trade on the Close.

That said, for the sake of a bit of fun only, I am tempted to trade off the opening range set in the first 30 minutes of FTSE100 trade. But this is fun money, not income.

 

[barjon]

should open higher, then fade a bit before moving to new highs for the rally - all assuming us futures hold steady and recent gap patterns hold true.

jon

 

[tomorton]

Closed long for the 100pt target. Jon was right on the early action. Gap up at the open has already closed so we are setting up for a potential whiplash short if we have a weak finish. If the Close is so weak as to print below Friday's range that would make for a strong sell signal.

 

[Splitlink]

I've shorted the day's top on the SP because I won't be home for the FT when it closes. More or less the same in principle, though. I'm a shorter at present because my patterns don't tell me otherwise. If I can get a profit before I go out, I might use it as a BE stop.

 

[_JWG_]

Whilst I continue not to trust the swings in this volatile climate (happier working intraday still) it's perhaps worth recording that we have a change of swing trend to UP. First confirmation will come if 4534 goes.

The very bold will have gone long around 4346. The more cautious await the first 3 bar correction. Me? I'll be sticking with intraday for now.

good trading

jon

Barjon,

I understand the reasoning for you switching to trading intraday charts while the market is so volatile... but if you don't mind me asking what smaller time frame do you prefer? and what method do you use? and at what stage of the trading day do you use it?. You don't need to be specific... just curious to know if you use the three bar swing method in shorter times frames or some other method that I could research. Sorry about all the questions but i figure it is wise to ask questions to someone like yourself who has longevity in this game.

Thanks in advance

JWG

 

[barjon]

jwg

i'm guided by dow and how it performs after ftse close. For example, if dow has risen but ftse opens weak against that rise (using 1 ftse point for 2 dow points) then i work on the basis that it has some catching up to do and look for a long when it starts trading strong against dow SB quote so long as that proxy dow is steady or rising. Not really using the 3 bar swings. Use 15 min for the "analysis" then 5 min and the tape for entries/exits.

good trading

jon

 

[wallstreet1928]

interesting..............I also use the DOW as a predictor of the FTSE?

 

[_JWG_]

jwg

i'm guided by dow and how it performs after ftse close. For example, if dow has risen but ftse opens weak against that rise (using 1 ftse point for 2 dow points) then i work on the basis that it has some catching up to do and look for a long when it starts trading strong against dow SB quote so long as that proxy dow is steady or rising. Not really using the 3 bar swings. Use 15 min for the "analysis" then 5 min and the tape for entries/exits.

good trading

jon

Thanks for the reply Barjon... hope your trading well.

 

[barjon]

Thanks for the reply Barjon... hope your trading well.

s'ok

i ought to add also that i've found the 3 bar swing approach suspect in lower time frames. i think you need a "proper" session where traders are opening and closing their books.

good trading

jon

 

[_JWG_]

s'ok

i ought to add also that i've found the 3 bar swing approach suspect in lower time frames. i think you need a "proper" session where traders are opening and closing their books.

good trading

jon

Excellent. I was going to ask you this exact question Barjon. Reason being is the IG FSTE 100 mini is tracking in market hours and out of market hours. Therefore I suspected the 3 bar swing approach would not be very accurate due to the daily candles that are not forming true market open and closes.

But i had a thought. I can trick the software to read as a 1440 min Chart (daily) and then I can nominate the market hours to track. For example 8:00am UK time to 4:00pm UK Time. Can you tell me Barjon what market hours i should track? UK 8am to 4pm?

My only concern then is that a spike may close me out in the after market hours. However would this be any different to a gap opening in regular market hours? I'm undecided. At the end of the day at least my ftse 100 chart would track the actual market in its open hours.

My other option is to just trade shares (uk or aus) not indices with the 3 bar swing approach. most individual cfd stocks will open and close in market hours and not trade after market hours.

Thoughts?

 

[barjon]

ftse open is 8:00am and its close is 4:40 pm (taking account of 10 minute after hours auction) so that's your period, BUT you'll still be tracking the IG quote and not the real thing.

Yes, the out of hours quote mostly moves shadowing DOW and often changes quite radically at or before ftse open when it's clear ftse is not going to open at those levels (hence my post about ftse opening weak against dow).

Although this thread is all about ftse, I only trade it in my "fun" account. My main account uses the 3 bar approach for individual shares (a stable of ftse constituents).

Not sure if any of that helps!!

good trading

jon

 

[_JWG_]

ftse open is 8:00am and its close is 4:40 pm (taking account of 10 minute after hours auction) so that's your period, BUT you'll still be tracking the IG quote and not the real thing.

Yes, the out of hours quote mostly moves shadowing DOW and often changes quite radically at or before ftse open when it's clear ftse is not going to open at those levels (hence my post about ftse opening weak against dow).

Although this thread is all about ftse, I only trade it in my "fun" account. My main account uses the 3 bar approach for individual shares (a stable of ftse constituents).

Not sure if any of that helps!!

good trading

jon

Jon. mate that makes complete sense.

Cheers for your reply.

 

[tomorton]

Technically we confirmed a swing high with this morning's index fall. I took a reasonable 50pts shorting the FTSE overnight based on the US weak close but held off shorting this am until the US futures and markets gave a lead - now that we have seen a 1.5% interest rate cut and ECB rates are due to be cut also I am definitely awaiting further price moves before going in.

 

[tomorton]

A rather confusing day but I have accepted the swing signal, especially as it follows the US lead and gone short.

 

[TysonA]

Hi all...

Anyone who is interested in financial/political/economic opinons pls take some time to read my blog...I will also be commenting regularly on the FTSE.

Tyson Knows Best

Thank all!

 

[tomorton]

Well, the profit on the swing short signal has been limited to just Thursday's action by today's partial recovery. This is frustrating and familiar in these volatile market times, we no sooner start a move than a 2-day counter prints.

A good rule to follow is 'Trade with the trend - no trend, no trade', but I think the break-out from today's range, rather than the action itself, will indicate the trend to trade. The range today has been too wide to be an ID/NR4 but its so few points over it should be worth the risk. Upwards takes us into a 3-day unfilled gap reversal long. Downwards will simply be a continuation of the downswing initiated yesterday. The strength of the US finish will be a good indicator, though I am likely to still place orders above and below today's FTSE range: an ID/NR4 finish on the US indices would be helpful.

 

[barjon]

hi tomo

dow put on around 100 after ftse close so ftse should open higher given a calm week-end. Against that ftse has been very strong compared to dow during a week when dow has fallen by around 400 points and ftse has only dropped around 60 points or so. Interesting!!

fwiw it's nip and tuck looking at ftse constituents with the swingtrend UP for 36 of them, DOWN for 38 and 26 in no mans land.

I think I'll still be favouring the long side for the moment.

good trading

jon