Anyone scalping the FTSE Futures??

[swissy]

I suspect more downside to come.... so I am still net short. I think news flow will support that view as people fear is continually stoked by Govts using drastic measures to capitalise on this for political purposes (all about votes and control etc used to be global war on terror now this) and the media in support with the headlines.

Plenty of debt fuelled badly run companies are going to implode.

I’m looking at weekly and monthly charts for levels of interest.

Sentiment will change when COVID-19 is “normalised”, Govts relax drastic measures, liquidity is pumped into the system (interest rate cuts and stimulus) and the buyers flock in..... this will truly be the buying opportunity of the decade! Markets have been waiting for an excuse to deflate the bubble and have found one and now will put that in reverse when the conditions are right.

Trying to predict this in current conditions is pointless and it really is a case of trying to catch the falling knife at the moment. I’m focused on ASX and very interested in how China plays out trying to “normalise” itself rather than the headlines of “another case in .....(insert country).... everyone will be rounded up blah blah blah”

Of course I could be talking b*llocks... the market will decide as always but I have not done too badly so far.... I have used relatively tight stops but have contingency planned with orders at various levels to support those stops being taken out.

Ps I like Pharmo/healthcare index ETF’s - for long term investment - always have not just because of COVID-19!

 

[medallion way]

I’m looking at weekly and monthly charts for levels of interest.

We are not far apart in our trading method except in the use of STOPS and choice of instruments (I believe the ASX is rigged so I avoid trading it)... I hedge rather than cut and will remain on the one strategy unless circumstances change.

On 17th Feb I made the call to expect a 17% to 18% correction (based on the DOW), Fri session hit that target for the DOW so I unwound most of my DOW, FTSE, IBEX, NIKK & HSI shorts holding on the S&P, NDAQ & RUSSELL shorts as I belive those got a bit further to go. It is possible that the selloff will continue to the Dec 2018 lows (22k or a 24% correction), however, my view is that another 4% is probably the floor.

My strategy now is to buy the daily dip and hold, I will continue to do that until markets are consistently making higher lows. I estimate that 60 to 80 contracts will be filled for both US and EU indices on this strategy... a very simple strategy that, if it goes to expectation, when the recovery happens, it will double the 6 fig profits made on the shorts. If things go pear-shaped, I will be hedging the longs rather than using STOPS. (Anyone that's been following my strategies knows that I apply the Madallion method i.e. develop a clear view then let the objective reach no matter how long it takes (I was net short for 7 months before the objective was reached, when reached, the pay was substantial, while I wait for the main objective, I day-trade the high & low of the previous day on the daily charts). I typically do not cut positions, if circumstances change and I need to reverse course, I scale out of any losses that appear unrecoverable on the previous strategy... however, indices are quite simple and safe to trade:
a) Historically, markets have a 10% correction every 331days and a 4% dips every 4 weeks (2017 was an exception)
b) 100 years of history say that new hights will always be made (US markets)
Longs will always be profitable eventually, Shorts are different and need more planning, curating and care, they are unsuitable for long term holds.

 

[Dentalfloss]

Dead cat bounce
poss bull trap

 

[Dentalfloss]

Green horizontal are the lows,,,,They have not started rising ...as yet

 

[Dentalfloss]

rising lows needed

 

[Dentalfloss]

 

[Dentalfloss]

end of month window dressing
no panic seen

need rising lows next week

 

[medallion way]

Dead cat bounce
poss bull trap

Thanks for that, I will keep it in mind. Do you have a view on where the floor is? Players are showing a certain amount of careless and amateurish behaviour... Fist the effect on earnings of the coronavirus are ignored then they are the cause that will "end the world." in-between the extremes, nothing changed.

 

[Dentalfloss]

Plenty of ink around the low with higher lows to follow.Keep an eye on range expansionat the bottom of the pattern.Meaning is that are the lows getting lower even though the trend is moving upwards

 

[medallion way]

Thats now a 15% fall on Dow in 8 days, so we can expect a 17% rise coming.

I would not be counting chicks yet, Fri had a rally at the close which was unusual for a Fri and imprudent under the circumstances, Powel spoke and I guess Fed anticipated action was the cause of the rally by those players in the mistaken belief that the Fed has their back and so are oblivious to the economic effects the coronavirus can have, however, on Sat the US had its 1st coronavirus death, a sad event but one that might shake some sense in the perma-bulls.

BTW, I think that mentioning body counts is insensitive and making light of a tragedy brings bad karma, I won't bring it up again.
.

 

[swissy]

We are not far apart in our trading method except in the use of STOPS and choice of instruments (I believe the ASX is rigged so I avoid trading it)... I hedge rather than cut and will remain on the one strategy unless circumstances change.

A good strategy in the circumstances and one that would have benefited me as I built up an early short position on ASX in anticipation but got shook out of about half my positions due to my risk profile as the market kept rising!
I use technical analysis to identify areas of interest but won’t put a trade on unless news and sentiment line up - although this can produce an counterintuitive effect as well! (Isn’t trading the most frustrating endeavour on the planet - which is why I do it!!)
If you don’t mind me asking how do you hedge? Through inverse correlating instruments or options or other methods?

I trade a number of instruments - the ASX chiefly as I am currently in the time zone and can keep a weather eye on news and the index itself is relatively easy to analyse for second and third order effects as it is so stilted towards resource related and other large domestic companies - Banks etc (Australia’s economy is not very diversified and heavily weighted on resource exports and Chinese imports plenty of household debt and extraordinary high house prices in some capital cities).
When in UK I trade mainly FTSE but also Euro index’s and US on occasion. I will trade currencies and WTI, gold etc if I see an opportunity.

 

[medallion way]

If you don’t mind me asking how do you hedge? Through inverse correlating instruments or options or other methods?

It depends on the purpose of the hedge... short term hedging (such as to protect account bal. during a flash movement) inverse correlating instruments are good, especially the VIX. for longer-term hedging or to recover a loss I will simply scale and enter an opposite trade in the same instrument. Options are most people's choice but these have an expiry date and so are frustrating to manage and re-enter, but since you like to be frustrated then use them, I prefer less work so use more direct type of hedging.

BTW, I used to trade the ASX & AU direct shares, with few exceptions I never was able to make money on the ASX... I then handed my portfolio to a professional to manage (Macquarie Bank), within 18 months half the capital was lost. I figured, if I can't make it work and the professional, with an army of analysts at his disposal, does worst than I did, there must be something wrong with the ASX, and there is... insiders move in unison, quite irrelevant to fundamentals i.e. the ASX is rigged. I suppose if you trade the charts you can follow the insiders and buy/sell when they do, but on my method of trading the fundamentals, the ASX just moves too mysteriously for my liking.

 

[swissy]

It depends on the purpose of the hedge... short term hedging (such as to protect account bal. during a flash movement) inverse correlating instruments are good, especially the VIX. for longer-term hedging or to recover a loss I will simply scale and enter an opposite trade in the same instrument. Options are most people's choice but these have an expiry date and so are frustrating to manage and re-enter, but since you like to be frustrated then use them, I prefer less work so use more direct type of hedging.

BTW, I used to trade the ASX & AU direct shares, with few exceptions I never was able to make money on the ASX... I then handed my portfolio to a professional to manage (Macquarie Bank), within 18 months half the capital was lost. I figured, if I can't make it work and the professional, with an army of analysts at his disposal, does worst than I did, there must be something wrong with the ASX, and there is... insiders move in unison, quite irrelevant to fundamentals i.e. the ASX is rigged. I suppose if you trade the charts you can follow the insiders and buy/sell when they do, but on my method of trading the fundamentals, the ASX just moves too mysteriously for my liking.

Fair enough and thank you for responding. All markets have mysterious movements it seems to me - not just ASX! I have tried to do some basic hedging on other inverse instruments and it’s an area I would like look a lot deeper into. I have tried wide stops, tight stops, no stops etc, as I currently work full time in an unrelated area, I settled on wide stops for initial entry, scale in with tighter stops and move to b/e etc Seems to work but not as effectively as I would like - a bit like snakes and ladders with snakes (just) having an upper hand!

 

[counter_violent]

Interesting discussion.

The solution I try to operate to the hedging issue goes like this.
Dow, S+P, Nas all have direct hedge tickets on my platform. So timing isn't a great issue, neither is overall direction given that I can pick levels in advance, then simply bias / re-bias stake accordingly. Strength/Weakness (aka Barjon's work) across the Three instruments is another advantage. So if you back the wrong horse, it affords the opportunity to correct matters by getting on the right horse. So i'm interested in the "overall outcome" of the cluster of trades as opposed to an individual trade.
A much more relaxed approach to managing trading. Of course, a home run takes care of itself, by simply moving a trail stop as the action unfolds.

 

[medallion way]

All markets have mysterious movements

Just the small ones that can be manipulated by a few (the top 3 companies in the S&P500 could buy the whole ASX and still have change left over, just to emphasize how small and easily manipulated the ASX is), and don't think ASIC cares to stop the practice... once in a blue moon they'll get some inside trader but scratch the surface and it turns out to be someone that fell out of favour so the insiders want to banish from the club... hand the chap to ASIC with an apple in the mouth ready for the oven.

 

[swissy]

Just the small ones that can be manipulated by a few (the top 3 companies in the S&P500 could buy the whole ASX and still have change left over, just to emphasize how small and easily manipulated the ASX is), and don't think ASIC cares to stop the practice... once in a blue moon they'll get some inside trader but scratch the surface and it turns out to be someone that fell out of favour so the insiders want to banish from the club... hand the chap to ASIC with an apple in the mouth ready for the oven.

I agree and it is pervasive in all aspects of society in Australia not just financial markets..... the mates for mates get-along-gangs run most elements here from local shire councils to CANBERRA. However most people living in Oz are parochial, uninterested and apathetic and think it is part of the normal fabric of life.... the “lucky country” (Donald Horne)

 

[swissy]

Interesting discussion.

The solution I try to operate to the hedging issue goes like this.
Dow, S+P, Nas all have direct hedge tickets on my platform. So timing isn't a great issue, neither is overall direction given that I can pick levels in advance, then simply bias / re-bias stake accordingly. Strength/Weakness (aka Barjon's work) across the Three instruments is another advantage. So if you back the wrong horse, it affords the opportunity to correct matters by getting on the right horse. So i'm interested in the "overall outcome" of the cluster of trades as opposed to an individual trade.
A much more relaxed approach to managing trading. Of course, a home run takes care of itself, by simply moving a trail stop as the action unfolds.

That’s interesting..... how do you get a direct hedge ticket on an instrument? ( excuse my ignorance)

 

[counter_violent]

That’s interesting..... how do you get a direct hedge ticket on an instrument? ( excuse my ignorance)

Explainer link.
Most providers will probably offer this.

https://www.etxcapital.com/en-gb/ed...agement/how-to-manage-risk-(with-etx-capital)

 

[counter_violent]

Dow -570 gap open.

 

[itspossible]

Dow -570 gap open.

i checked earlier and everything appeared up