Question about FTSE100 this afternoon (6/11/09)

[kugan]

Hello all!

I'm new to the T2W forums and am new to spread betting. I am trying to get to grips with it, using the FTSE 100 index as a focus. I started on Monday, using the interactive investor spread betting demo platform to get a feel for things.

At the moment I'm trying to see how well I do, scalping about 2 points past the spread each time, although I am also trying to learn more about technical analysis to make this easier. I made my first loss today, at around 13:30 when the FTSE took a 50 point drop in only a few ticks.

I had placed a stop loss at around 5100 points, got stopped out and was a little frustrated when the price had rose back up to its original level over the next hour or so.
If anyone else has been trading ftse spreads today, I'd love to know:

-Was there some way I could have anticipated the 50 point drop? A form of technical analysis that would have made it obvious from looking at the chart? Or would I have to have been watching the news this afternoon?

-Should my stop less have been set lower? Or higher, and the loss just accepted as part of the game. Considering I'm trying to get a large number of scalps, with mostly a 2 point profit each time, is this a bad strategy to use on the FTSE?

Any advice would be greatly appreciated.
Thanks!

 

[foredog]

Non farm payroll came out in the US, check news calendar on forex factory and avoid rading a these times

 

[tomorton]

Hi kugan -

You're starting off your trading career in a Formula 1 level competition. Why not set scalping aside for when you feel what you need to do before you know it and learn about TA and all the market mechanics over a longer timescale?

Are you spreadbetting? - if you are, scalping for 2 points on the round trip cannot pay.

 

[kugan]

Hello again,

foredog -- thanks for the tip and I will have a look at the news calendar on forex factory

tomorton -- thanks for your reply. At the moment, I am spreadbetting, using the interactive investor demo platform, with a 2 point spread on the ftse 100. I would like to learn more about market mechanics and TA, but I guessed at the moment, seeing as I have a demo account, I could afford to make some mistakes and see how things go.

Is there a reason why 2 points past the spread won't work? What I generally do is observe the price fluctuations using the 5 minute chart, try and observe a trend from the close/opening prices, and bet in that direction. The last few days with the FTSE I've mostly been placing buy bets. I look at the general figures the price seems to be dotting around using the tick by tick chart, place an order below the spread's sell level, normally by 2 points, wait for it to pull back down, then I place a limit order on 2 points profit, wait for a few minutes and claim the 2 points. I'm looking to learn more about T.A as experience (or more replies to this thread!) renders my method more and more crude and hope to apply what I've learnt from then.

If you, or anyone else reading the thread, know any resources, websites, books, you would recommend for me to start with, I would be very grateful. I'm looking to focus on getting a good feel for the FTSE, so any resources on this in particular would be perfect.

Thanks again!

 

[tomorton]

Hi kugan - the Sb spread is too wide, the SB firms will not allow you to continue to play / keep your winnings. You may even come to believe the table is rigged against you - it might be: they see you coming. Don't forget that most of the stuff you will read on the web on scalping or very short-term trading is US-origin: they don't have financial spreadbetting over there, so they're talking about a different game.

Its not the size (or number) of winners that will determine your future as a trader, its how you deal with the losers.

 

[naivetrader]

(Its not the size (or number) of winners that will determine your future as a trader, its how you deal with the losers.)
Hi TOMORTON, I like that statement. I'm a newbie myself and trying to get a grip of it for last couple of years. I guess, FTSE is a bit too volatile for a beginner. Whipsaw's would be difficult to negotiate without having an eye on the big picture and yes, during crucial announcements like NFP on Friday @ 1.30, it would be rather worth watching the market, from the sideline.
Best wishes with your Trading, Kugan.

 

[top trader]

kugan-

never buy, if you are a day trader, when news due to come out, specially from USA.

Try not to trade for first hour of trading, in case FT not till after 9 a.m.

no trades during 13.00 till 15.00 when most of USA figures come out and move the market. i like trading during above mentioned hours because i have greater experience and make most money during this time but to be avoided if you are a newbie.

remember slow turtle wins the race.

good luck.

 

[kugan]

tomorton -- I think I've actually been misusing the term 'scalping' so, my apologies. After reading your reply, I went to look up scalping in more detail, rather than what I thought it meant (pah..rookies eh?). I think what I assumed it was was taking very small profits off small fluctuations in the prices, rather than exploiting the bid-ask spread despite price changes. thanks for your reply, it's helped clear this up for me

naivetrader -- thanks for your reply, and the support. and after looking it up, i now know what a whipsaw is, so thanks for that too

top trader -- thanks for the tip on american news. This is exactly the kind of thing I'm looking to learn and get to grips with, fundamental factors that affect the FTSE, as well as improving my knowledge of T/A, so thanks for the tip.

thank you all for the replies! I'm learning...slowly

 

[Splitlink]

Being a morning trader I missed that one. I was short all morning and closed my trade with a 0.5 point profit! Such is the life of a trader.

You'll have to figure out how much risk you are willing to accept and, also, where you would put SR lines, if you use them. On my hourly chart I have put three possible lines. Whether you, or others agree with them is another point. If you would care to read Trader Dante's thread on Pin Bars you will see that that bottom pin goes right through those three lines, which he likes pins to do, but it is not a P-bar according to his definition of one.

I admit that I do not trade afternoons and have put those lines in by hindsight. Would others have put them there? Perhaps they would like to comment. Nevertheless, I like pins and try to identify them with lines, averages or trendlines. Anywhere, where traders are likely to have stops.