swingin' the ftse: 2008

[barjon]

tomo

Yes, that's about what I got. But, the fact that you found it the same using 1hr doesn't seem to support my second point 2. The 8:30 to 9am move is likely to maintain until 10am when a reversal is about a 50/50 chance. so I guess I'll look at that bit again.

good trading

jon

 

[tomorton]

Cheers Jon.
By the way, congratulations on the 1,000th post here - fitting you should get this one after all the input. Well done.

 

[HW07]

hw07

it's basically this T2W Day Trading & Forex Community

good trading

jon

Thank you Barjon.

 

[tomorton]

60OR reversal worked almost perfectly today - I was looking for 84pts short from 0900, but actually took 90 after spreads etc. Definitely running this again tomorrow.

Swing trades on the longer timeframe may not be so easy however, the markets are jumpy and we could be looking at another 1 up 2 down, 2 up 1 down period.

 

[Donkers]

Hi Donkers - Marc Rivalland's book is an excellent manual for swing trading, and I can't think its necessary for a swing trader to have more in formation / tactics at his disposal. That said, I find one of the frustrations inherent in Rivalland swing trading is the number of days that must separate swings. I mean that in a trend you need a swing in the opposite direction to allow you an entry point, and the swing must be at least 3 days long. This is a personal issue and it doesn't make Marc's method any the less practical.

I definitely cannot recommend Alan Farley's Master Swing Trader. The best I can say is that it is 'scholarly', and that's also the worst I can say about it.

Strategically though, money management discipline is absolutely vital to keep you in the game and isn't addressed in Rivalland. See books by Alex Elder.

I find I only need to trade one index, the FTSE100, but as it basically follows the S&P I refer to the S&P whenever chart patterns might be ambiguous on the FTSE. Tracking multiple markets is stressful and time-consuming so I either trade the FTSE or rarely metals but not both simultaneously. There are two nice things about the FTSE - it tracks the US markets, so we can often see by mid-evening here what we will do tomorrow, as New York is closing at that time by the UK clocks. Secondly, the index features real gaps between close and subsequent open - so does the S&P and the Nas I think but many markets, like the Dow, are not permitted to 'gap', while others like FX I think are 24hr markets so real gaps can not occur. Gaps are not essential for swing trading, but they tell you something about market when they occur.

Hi Tom, sorry for the delay in responding..

Many thanks your post. I've read some more of the book now, and am feeling very keen indeed on giving it a real go. It really does seem pretty comprehensive, and I especially like the swing charts and the idea of using them to trade the FTSE. I'll cross Farley's book off my wish list now, after your observation. I've got loads of books now anyway, including one of Elders - Come into my Trading Room.

I see from your profile that you were once a full time trader, so you must have considerable experience and it is interesting that you have now chosen just the FTSE for (part-time) trading. Would you recommend FTSE swing trading as per Rivalland to someone fairly new to this if they can stick to the rules and exercise good money management? i do know that some people say the indices are riskier than shares, though Marc seems to suggest the opposite in the book!

And, if I may ask all generally.. have you all here found 'swinging the footsie' consistent, reasonably predictable and particularly profitable?


Can't wait to get going - but I'll force myself to absorb the book the best I can first. Though I don't want to miss any huge linear phases that might be around the corner in these unique times though, and I'd rather grind a few all small trades out first, if possible.

Thanks again.

 

[Splitlink]

I have traded indices and shares for some years. I feel that shares are safer, although it has been proven to me (by the shares, themselves) that that is not, always, the case. I have been caught by an opening gap on more than one occasion. What I am inclined to do, is to take margin into account and, as it is lower, in many cases, I can increase my trading size when dealing with shares. I also find that I prefer the closer stop that a share gives. To trade Footsie on a daily basis, overnight, is something that I prefer not to do, although I often do with the SP500.

Probably, all "feelings" on my part, with no real base in reality.

Split

 

[tomorton]

Hi Donkers - In some ways the index is less risky, as it is less volatile and less subject to corporate events/news. The FTSE doesn't have a Board, Annual Report, AGM/EGM, Trading Statement, critical sector anlaysts's reports etc.: it doesn't bounce around like a share does when the FD announces unexpected retirement to spend more time with his family. Indioces are generated by vasy numbers of market particoapnts and their decisions, so TA is much more reliable than with a smallcap share. This also keeps spreads low for trading. Some indices don't gap overnight - you might find this also reduces volatility.

Then again, a volatile share could be a massive winner. You could be in line for dividends if you buy the shares themselves. And there is plenty to know about an individual company that can gve you an edge (if you have time to research and analyse it).

The FTSE recently has not been highly predictable but that is because there are a lot of desperate market players out there right now - so a two-day trend is likely to reverse violently. t doesn't normaly behave this way - look at the narrowness and sedate progress of the daily bars over almost any period compared with October-November.

 

[barjon]

donkers

I think if you look through this thread and its forerunner, you will see that the "3bar" approach (which is pretty close to Rivalland's method) is fairly good. That's not to say you will be profitable with it since much depends on how you choose to manage your trades and over what timescale as well as your money management.

For my twopennyworth, I'd say that shares (which I trade in my main account) represent the better bet as against FTSE (which is a sideline in my play account). After all, not all the shares move at the same pace and if FTSE is rising it's better to be with the leaders that are dragging it along than the index itself.

You need to be selective though. Some shares bounce around alarmingly and are not suited to the "3 bar" approach in any shape or form. They can also be prone to those adverse gaps that Split hates (Tate & Lyle still rankles, eh Split ). For myself, I have a stable of 15 - 20 shares from the FTSE100 although the horses come and go.

good trading

jon

 

[foredog]

I agree with Barjon that shares can deliver more movement than the indexes, as highlighted though you must beware the gaps, don't have a stop too close as a thinly traded share can easily trade 1% different in only a scrap but it'll still trigger you're stop where as the index will not move this quickly

 

[Donkers]

Hi Donkers - In some ways the index is less risky, as it is less volatile and less subject to corporate events/news. The FTSE doesn't have a Board, Annual Report, AGM/EGM, Trading Statement, critical sector anlaysts's reports etc.: it doesn't bounce around like a share does when the FD announces unexpected retirement to spend more time with his family. Indioces are generated by vasy numbers of market particoapnts and their decisions, so TA is much more reliable than with a smallcap share. This also keeps spreads low for trading. Some indices don't gap overnight - you might find this also reduces volatility.

Then again, a volatile share could be a massive winner. You could be in line for dividends if you buy the shares themselves. And there is plenty to know about an individual company that can gve you an edge (if you have time to research and analyse it).

The FTSE recently has not been highly predictable but that is because there are a lot of desperate market players out there right now - so a two-day trend is likely to reverse violently. t doesn't normaly behave this way - look at the narrowness and sedate progress of the daily bars over almost any period compared with October-November.

Many thanks, tom. I think the thing to do is for me to have a go with a few instruments, as well as the FTSE index, and see how it goes. I don’t know whether the approach is suited to currencies & commodities etc as well? I should have enough time during the day soon, to be able to have a go with more than one vehicle.

 

[Donkers]

donkers

I think if you look through this thread and its forerunner, you will see that the "3bar" approach (which is pretty close to Rivalland's method) is fairly good. That's not to say you will be profitable with it since much depends on how you choose to manage your trades and over what timescale as well as your money management.

For my twopennyworth, I'd say that shares (which I trade in my main account) represent the better bet as against FTSE (which is a sideline in my play account). After all, not all the shares move at the same pace and if FTSE is rising it's better to be with the leaders that are dragging it along than the index itself.

You need to be selective though. Some shares bounce around alarmingly and are not suited to the "3 bar" approach in any shape or form. They can also be prone to those adverse gaps that Split hates (Tate & Lyle still rankles, eh Split ). For myself, I have a stable of 15 - 20 shares from the FTSE100 although the horses come and go.

good trading

jon

Many thanks, Jon. I’ll look for the earlier thread and start going through that one, and then this.

With regard to shares, I take it you feel that the real steady money is to be made trading this way with some shares, whereas the FTSE index is ok if you want a but of fun and a bit of a flutter?

I want to try to be consistently profitable trading this way, so I’ll see if I can find some suitable candidates from the FTSE100, as well as trading the index, and see how it goes.

There’s also other shares, of course. American ones in particular seem to move around a lot, but I don’t know how well they fit in with the 3 bar approach?. Have you any thoughts on those?

Then there’s other instruments – currencies, commodities etc, that I haven’t really looked at yet from that point of view. cheers.

 

[tomorton]

Went short at Close tonight as we completed a Key Reversal pattern late in the session. Weak evening action in US suggests a steep fall in the FTSE through the night and into tomorrow, possibly with an opening gap down.

60-min Opening Range Reversal worked on Monday, also yesterday (though I missed this through being stuck in a meeting) but failed to show today. Still, live to fight another day.

 

[trigger]

Hi tom
Well real FTSE futures ended down at 3924, not sure what SB firms quoted, but either way down an extra 79 points by 9pm

steve

 

[Splitlink]

donkers

I think if you look through this thread and its forerunner, you will see that the "3bar" approach (which is pretty close to Rivalland's method) is fairly good. That's not to say you will be profitable with it since much depends on how you choose to manage your trades and over what timescale as well as your money management.

For my twopennyworth, I'd say that shares (which I trade in my main account) represent the better bet as against FTSE (which is a sideline in my play account). After all, not all the shares move at the same pace and if FTSE is rising it's better to be with the leaders that are dragging it along than the index itself.

You need to be selective though. Some shares bounce around alarmingly and are not suited to the "3 bar" approach in any shape or form. They can also be prone to those adverse gaps that Split hates (Tate & Lyle still rankles, eh Split ). For myself, I have a stable of 15 - 20 shares from the FTSE100 although the horses come and go.

good trading

jon

Hi Don,

Who likes adverse overnight gaps? Actually, TATE isn't the only one one that I have had, but I have had good ones, too. That goes with the job.

 

[Splitlink]

Many thanks, Jon. I’ll look for the earlier thread and start going through that one, and then this.

With regard to shares, I take it you feel that the real steady money is to be made trading this way with some shares, whereas the FTSE index is ok if you want a but of fun and a bit of a flutter?

I want to try to be consistently profitable trading this way, so I’ll see if I can find some suitable candidates from the FTSE100, as well as trading the index, and see how it goes.

There’s also other shares, of course. American ones in particular seem to move around a lot, but I don’t know how well they fit in with the 3 bar approach?. Have you any thoughts on those?

Then there’s other instruments – currencies, commodities etc, that I haven’t really looked at yet from that point of view. cheers.

It depends on your character, too. Share trading can be quite a slow business. That is why, when I feel that it is dragging a bit, I'll come back to trading an index, again. However, as I said before, I'm getting to like less excitement nowadays.

 

[barjon]

Well, here we are then - testing time for the assumed up trend. A little messy, but we have a potential swing low and a long entry beckons around 4200. Given the strong DOW performance after FTSE close that might prove difficult!!

good trading

jon

will update fully on saturday - anyone who tried to get in despite the big gap opening will be licking there wounds afterthis false signal (one of the few we've had).

good trading

jon

 

[Splitlink]

I bought a few company shorts back at a profit this morning, and bought SP500. This is, however, now touching my hourly Bollinger and it seems to bounce off those, so I am out and waiting to see if I should short, now. The FT had bounced on the opening and I did not want to chase.

Quite a good few days trading period for me. Leisurely stuff these days.

Split

 

[Donkers]

It depends on your character, too. Share trading can be quite a slow business. That is why, when I feel that it is dragging a bit, I'll come back to trading an index, again. However, as I said before, I'm getting to like less excitement nowadays.

Cheers, Split.

Have you (or anyone here) tried this method on high volume high volatility American shares, as well as currencies etc?

 

[Donkers]

will update fully on saturday - anyone who tried to get in despite the big gap opening will be licking there wounds afterthis false signal (one of the few we've had).

good trading

jon

Thanks, Jon. I've now managed to read through the two threads and am looking forward to the next few weeks and beyond. Could be a very interesting 2009, when this approach could be even more interesting, don't you think?

 

[Splitlink]

Cheers, Split.

Have you (or anyone here) tried this method on high volume high volatility American shares, as well as currencies etc?

No, but I am thinking of it!! :idea: