Swingin' the ftse 2010

[tomorton]

Got this in an email

Pivot: 5170

Our Preference: SHORT positions below 5170 with 4992 & 4900 in sight.

Alternative scenario: The upside breakout of 5170 will open the way to 5265 & 5292.

Comment: the break below 5170 is a negative signal that has opened a path to 4992.

This might be great advice. However, it depends. Even if its good advice, if its based on shorting below a certain MA, or trading on phases of the moon, or analysis of the patterns of fluff found in a druid's belly-button, how much cash would you throw at it?

What if its good asdvice but the market reacts to something unexpected? - there has to be an exit plan. And how long does this advice apply? - i.e. what are the TA conditions that will negate the 5170 level and presumably introduce an new key level?

 

[tomorton]

Frustrating price action today. Gapped down at open, rose to fill the gap and trigger 80-20's, then fell nearly all the way back. Inverted hammer pattern suggests buying pressure waiting to break through. I am still short but could be worth putting a buy order in above today's close. Confirmation of bullishness would be strong up day tomorrow with close well above open, completing a morning star pattern.

 

[benji2010]

I hope it will be an up day tomorrow! I couldn't believe how low it was today!!

 

[zoo]

Frustrating price action today. Gapped down at open, rose to fill the gap and trigger 80-20's, then fell nearly all the way back. Inverted hammer pattern suggests buying pressure waiting to break through. I am still short but could be worth putting a buy order in above today's close. Confirmation of bullishness would be strong up day tomorrow with close well above open, completing a morning star pattern.

Hey Tom, what sort of price would you put a buy order in for tomorrow?

 

[tomorton]

Weak US close suggests we can ignore bullishness from inverted hammer. Closed my short and cancelled the buy order.

 

[zoo]

Frustrating price action today. Gapped down at open, rose to fill the gap and trigger 80-20's, then fell nearly all the way back. Inverted hammer pattern suggests buying pressure waiting to break through. I am still short but could be worth putting a buy order in above today's close. Confirmation of bullishness would be strong up day tomorrow with close well above open, completing a morning star pattern.

+ what sort of stop?

 

[tomorton]

+ what sort of stop?

Already cancelled the buy.

 

[tomorton]

Hey Tom, what sort of price would you put a buy order in for tomorrow?

These situations allow for some judgement. Getting in with a rising price via an order entails just as much risk as doing it live. OK, you can get your order filled overnight while you're away from the screen, so you sometimes get the advantage of an early morning gap. But sometimes it goes the other way before you have woken up and put in a stop.

As to where to set an order in a particular situation sometimes it is definitively set by the pattern you're trading - breach of a previous high, for example: but even here you have to allow for the SB buy/sell spread, the bias of the SB quote and a little room for normal volatility of the SB quotes. This makes precision difficult.

So you might say add 30pts and set the order there. But this makes it more likely you'll get only a marginal gain or maybe you'll join the move just as it stalls.

Best if you can set entry, stop and target all based on some valid TA.

 

[tomorton]

For tomorrow, I don't see great patterns for entry, but, in theory, looking only at EOD OHLC data -

whiplash - long at the close if we gap below today's low, then finish strong: short at the close if we gap above today's high, then finish weak;

key reversal - long at the close if the low is lower than today's but the close is higher than today's high: short at the close if the high is higher than today's but the close is lower than today's low;

morning star - long at the close if the low is above today's, and the close is above the open.

I can't say which will occur, maybe none. But these patterns all carry a high probability of enough room for a profit if they do form.

 

[zoo]

I find it difficult to place a buy order above the previous days close because you often get filled over night due to a widened spread. Also I don't know if the risk reward is there. I'm new to this, so I don't know if thats correct

 

[tomorton]

I find it difficult to place a buy order above the previous days close because you often get filled over night due to a widened spread. Also I don't know if the risk reward is there. I'm new to this, so I don't know if thats correct

Yes, I hate the overnght volatility that seems to have nothing to do with the daytime TA. I hate setting overnight orders, having been filled at the extreme of a move, only to see price reverse immediately, and have come to the point where I often delete my stops overnight.

 

[zoo]

Yes, I hate the overnght volatility that seems to have nothing to do with the daytime TA. I hate setting overnight orders, having been filled at the extreme of a move, only to see price reverse immediately, and have come to the point where I often delete my stops overnight.

Did you enter with a buy stop order to try and catch the move or did you place a buy limit order?

I find that if you place limit orders price continues to go against you until you are stopped out. If you place stop/market orders price usually goes in you favour, but then reverses very quickly against you so you are risking a lot to not make very much. I am trying to move towards swing trading because I am tired of placing multiple trades intraday - sitting in front of a computer all day is so boring! If the FTSE closed at 5050 today (at 11.59pm), would you (for example) consider placing either a buy stop (market) in at say 5070 or a sell stop (market) in at say 5030 to catch the moves? Is that what swing trading is all about? Or are you placing buy/sell limits at extremes, looking for reversals?

 

[tomorton]

Actually I never try to determine intra-day s/r levels. I do use EOD OHLC and of course often these call for an entry intra-day, rather than at the close, e.g. the Marc Rivalland three--bar reversal method that this thread is built on - barjon's an expert at that one.

But my signals are based on a small number of patterns only: if they don't print I don't speculate on the market's next move, just stay in cash. Currently, I am looking for
• Three-day Swing Trade
• 80-20 Daytrade
• Whiplash
• Three-day Unfilled Gap Reversal
• Key Reversal
• ID/NR4
• Hole-in-the-Wall Gap (very rare on index charts)
• Hikkake
• Pin Bar
• 1-2-3
• Outside Weeks (though not taking these right now)

Today's patterns coming soon, got to get a cup of tea.

 

[pboyles]

Actually I never try to determine intra-day s/r levels. I do use EOD OHLC and of course often these call for an entry intra-day, rather than at the close, e.g. the Marc Rivalland three--bar reversal method that this thread is built on - barjon's an expert at that one.

But my signals are based on a small number of patterns only: if they don't print I don't speculate on the market's next move, just stay in cash. Currently, I am looking for
• Three-day Swing Trade
• 80-20 Daytrade
• Whiplash
• Three-day Unfilled Gap Reversal
• Key Reversal
• ID/NR4
• Hole-in-the-Wall Gap (very rare on index charts)
• Hikkake
• Pin Bar
• 1-2-3
• Outside Weeks (though not taking these right now)

Today's patterns coming soon, got to get a cup of tea.

Remember that futures contracts change over on Thursday, normally some unusual price action on the days before and just after.

 

[tomorton]

Candlestick pattern somewhat resembles a pin bar, suggesting a long opportunity at 5085, though not a textbook pattern, the close today having dropped through yesterday's low.

More interestingly, today forms a putative swing low using the three-bar method, also suggesting a potential long at 5085 if 4984 holds. This low would be well above the previous, 4898 25/05, so that could be interesting. It also forms the right shoulder of a miniature inverse head-and-shoulders, but I'm not sure I believe in such wizardry any more, certainly wouldn't trade off it.

Buy order entered around today's high in case we breach it, but its way up there.

Focus - Sylvia (1970)

 

[tomorton]

Went long near the close yesterday as above: market in NY must have heard about this and started to sell - stopped out.

What can I say? - Boz Scaggs (1976)

 

[Mr. G]

Me too Tom
Also, went long on NDX which got to within a few points of hitting my target, realised it was in danger of giving me a profit so promptly turned tail and stopped me out at b/e. Double

 

[tomorton]

Now the FTSE has re-opened I see I have made the novice mistake of beieving the SB tick charts - we're nowhere near my real stop. Gone long again.

 

[Mr. G]

Now the FTSE has re-opened I see I have made the novice mistake of beieving the SB tick charts - we're nowhere near my real stop. Gone long again.

Interesting - what level are you long at?

I have a buy above yesterday's high.

 

[tomorton]

Closed, made back half of yesterday's loss. This was momentum jump-in trade only, no planning or real TA.