lolleeshindig
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or maybe the new year euphoria is just wearing off as it just cant seem to break that upper range
bonsai, thought you might like to read this, I gather you respect mr pipers views still?...
Wednesday's Tipster on UK-Analyst is John Piper of The Technical Trader
Prepare to Short the FTSE
argues John Piper of the newsletter for serious traders The Technical Trader
I am a short term trader and look for a variety of trading signals to position. Fundamentally I trade futures and options. I look to catch the "intermediate" moves, those that last a week to a few weeks. As with all trading there are some winners and some losers. I make money when the size of my winners exceeds the size of my losers. To do this you have to let profits run - I know you have heard it all before - it just happens to be true. Having been trading for a living (and making money) for more than a decade and a half its a daily fact of life for me.
For the past few months I have been watching FTSE 100 struggling to make much progress, it hit 4,218 in June, then managed 4,286 in August, 4,329 in September, 4,393 in October, 4423 in November, 4,491 in December and now 4,527 in January. Don't get me wrong, from an investment point of view these are useful gains but, as a trader, I look for more dynamic moves.
Moreover, my primary trading vehicle is to write (or sell) option premium. A market stuck in a relatively slow uptrend does not really suit me. I don't want to sell calls because the trend is still up, but nor do I want to sell puts as the market pattern is one leading me to expect a solid shake-out fairly soon.
This remains my view and I still believe that the bear market is far from over. I hope I am wrong because I believe that before the bear market has fully run its course the economy will be in big trouble with a lot of debt winging its way to money heaven with a correspondingly depressing effect on many asset values.
But these are longer term issues and do not necessarily have any bearing on this trade. For some weeks now, I have argued that I expect the market to fall back after the feel-good psychology of Christmas and the New Year. Indeed it is no particular surprise, in retrospect, that the rally has lasted until after the expiry of the January series of FTSE options as these have a far bigger effect on market action than most traders and investors realise.
So that is the background, what of the trade. Well, this is what I call a failed break and it is simply market action which takes us above a key level, 4500 in this case, but fails to hold it. A simple sell signal with a simple stop - above the high so far at 4527. However the signal is only given if the market spends some time below the key level. For my own trading purposes I use an hour, or three half hour bars - this is what is known as "acceptance." As at 8.30 am on Wednesday the signal has not yet been given and we must wait for the signal - but I am poised. To trade successfully you must trade what you see, not what you think!
It may be that FTSE will take out 4527 before we see it break back down again. That would only invalidate the trade if FTSE sees "acceptance " above 4,527. However if we do see a new high first then the stop level moves to that new high. More experienced traders may prefer to use "acceptance" above any such level as their stop
bonsai, thought you might like to read this, I gather you respect mr pipers views still?...
Wednesday's Tipster on UK-Analyst is John Piper of The Technical Trader
Prepare to Short the FTSE
argues John Piper of the newsletter for serious traders The Technical Trader
I am a short term trader and look for a variety of trading signals to position. Fundamentally I trade futures and options. I look to catch the "intermediate" moves, those that last a week to a few weeks. As with all trading there are some winners and some losers. I make money when the size of my winners exceeds the size of my losers. To do this you have to let profits run - I know you have heard it all before - it just happens to be true. Having been trading for a living (and making money) for more than a decade and a half its a daily fact of life for me.
For the past few months I have been watching FTSE 100 struggling to make much progress, it hit 4,218 in June, then managed 4,286 in August, 4,329 in September, 4,393 in October, 4423 in November, 4,491 in December and now 4,527 in January. Don't get me wrong, from an investment point of view these are useful gains but, as a trader, I look for more dynamic moves.
Moreover, my primary trading vehicle is to write (or sell) option premium. A market stuck in a relatively slow uptrend does not really suit me. I don't want to sell calls because the trend is still up, but nor do I want to sell puts as the market pattern is one leading me to expect a solid shake-out fairly soon.
This remains my view and I still believe that the bear market is far from over. I hope I am wrong because I believe that before the bear market has fully run its course the economy will be in big trouble with a lot of debt winging its way to money heaven with a correspondingly depressing effect on many asset values.
But these are longer term issues and do not necessarily have any bearing on this trade. For some weeks now, I have argued that I expect the market to fall back after the feel-good psychology of Christmas and the New Year. Indeed it is no particular surprise, in retrospect, that the rally has lasted until after the expiry of the January series of FTSE options as these have a far bigger effect on market action than most traders and investors realise.
So that is the background, what of the trade. Well, this is what I call a failed break and it is simply market action which takes us above a key level, 4500 in this case, but fails to hold it. A simple sell signal with a simple stop - above the high so far at 4527. However the signal is only given if the market spends some time below the key level. For my own trading purposes I use an hour, or three half hour bars - this is what is known as "acceptance." As at 8.30 am on Wednesday the signal has not yet been given and we must wait for the signal - but I am poised. To trade successfully you must trade what you see, not what you think!
It may be that FTSE will take out 4527 before we see it break back down again. That would only invalidate the trade if FTSE sees "acceptance " above 4,527. However if we do see a new high first then the stop level moves to that new high. More experienced traders may prefer to use "acceptance" above any such level as their stop
well, from experience, this is often what the market does.
change people from bullish to bearish and then recover.
and leave them stranded.
But I don't know anymore than you and as always, its ambiguous
this still looks like an abc, so as long as we dont break the low at
4431, we are still in an uptrend.
but it may be a close call !
change people from bullish to bearish and then recover.
and leave them stranded.
But I don't know anymore than you and as always, its ambiguous
this still looks like an abc, so as long as we dont break the low at
4431, we are still in an uptrend.
but it may be a close call !
adrianallen99
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Bonsai: What is the significance of 4431, as that is where I set my stop loss on Wednesday.
adrianallen99
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Hmm!
4466.60
4466.60
