6803, 6840, 6872 Support, 6900, 6937 Resistance

99 Comments

1. Hugh

   You must be a very happy man. ref yest. you having sell positions higher up.

   Got a buy signal at 6843 – looks quite far away.
   This gap up – not sure what it has done to the internal algos in software.
   Lets see.

   Where do you see as entry points?

   1. I set the Longs to close at 6900 – duh missed by 2 points I think…
      Closed one out at 6888..
      I like the look of the 6843 Buy – but agree – I wonder if you’ll see it.
      RC – Are you just beginning to trade ?? (I may have missed any previous posts..)

2. Hello everyone, just joined this blog comment section after having followed what goes on here for the last two weeks.

   First of all thank you Nick for this blog, I find it very helpful in my day-to-day decision making process when it comes to a trading plan for the day.

   I don’t really do a lot of ‘technical’ trading but have been doing this for a while now and make a profit from scalp trading and short to long term trading. I trade most main indices and stocks as well.

   I will try and post my trades and reasons for them, currently long FTSE 6820 for days now. Took profit overnight at the very predictable spike just under 6900 and holding out to see where things go now. Tempted to short the DOW above 250 so any technical reasons why I should, welcome!

3. Can’t be many bulls this morning? I’m looking at going shorting @ roughly 60 80 00.

4. Frustratingly missed out first thing.

5. Closed FTSE long at 6880, banked 60 points, short Dow 17335 just now. Reason for Short on Dow is that perhaps not today but come Monday and rest of the week the economics around the world will start to be the focus and it just does not look so good for China and Europe and despite good earnings and healthy-ish US economy (which is priced in one could argue) it will start to take its toll and of any index the DOW has had its best run I feel.

   1. oh DOW target is 17160-ish

   2. every time to shorted DOW i felt it had good run and its going go down but it only wiped all my profits 🙁

      1. It is hard to call the top as I think someone else here mentioned, which is right. I think in general you need to have far greater patience to go short and accept you might need to bide your time. Which is why I don’t use stop loss, which I know is a big no no but for me you cannot win in the market if you only trade on technicals, you need understanding of economics, business and politics and a healthy dose of experience in life and in trading.

         1. I totally agree with you. I lost 40 points on Dow yesterday.

            I have two positions open now
            DAX – Short 9886.3 – stops at b/e
            DOW – Short 17337.7 – No stop

            Especially with holding short, the market falls when majority least expects it. I remember the day after US elections, market looked rosy climbed like yesterday pricing in Obama’s victory and it did happen but just after the day of result it fell 300 points on the DOW and the majority were expecting it to rally.

            1. I am not sure on the DAX short, that looks dangerous to me. I was thinking of shorting US and going long FTSE or DAX, simply cause they so much off the pace and ok economies are different between Europe and US but earnings are good on both sides so either US comes down a notch in mid term or Europe catches up. What is your target? Guess if you looking for 30 points its fine and with volatility to last a while doable. Longer term I fancy DAX to go 10k

            2. Oh well taken some profits and rest at b/e on DAX. It takes hours to go up and mins to come down. I will see if it gets to Pivot

            3. looks like you got it right on the DAX, what do I know!

      2. that’s exactly what it does over and over again. learned my lesson not once. never pick up the tops.

         1. Do you scalp DOW, if yes, what strategy?

            1. Oh, sam. it’s hard to explain in 2 words, i’ve been learning from other traders, on my own mistakes. even if I told you how I do it, it will take you time to learn how to do it. it is very complex. however in general i use 1 min chart with support of 10 min, 1 hour (tbh i look at all of them for the bigger picture.) the strategy involves: pullbacks and fibs, trend lines, emas and set of indicators of which macd rci are the most important, i use stochastic as well. i have additional indicators like bollinger bands, parabolics which add to the picture as well.
               pivot levels are also important and also the times of opening of certain markets.
               i found most of my knowledge on youtube, try it. develop your strategy, which indicators you like the most, watch how they work with price action, talk to traders etc. i’ve written to myself tons of articles before i even started understanding what i am doing. i also made videos to myself, hindsight screenshots etc. i also looked and tried different strategies offered on internet and kind of developed my own approach which is more suitable for my personality. GL

6. RSI Buy Signal at 6861 first thing ..
   Divergence signal at 9 o’clock – (I can never see these in real time )
   50% Retracement to 6878 (from 6898 – 6855 )
   Let’s see if we bounce off 6867..

   1. Hugh

      No been trading for some years. Lost 3 big 40K’s.
      1st time – because I did not have a clue – 5***** Clueless
      2nd time – because – my tech analysis – Flawed – 3*** clueless
      3rd time – because – could not get emotions under control – 1*

      Now – Tech – is OK , Emotions – OK under control
      How to trade = on page 164 of a 200 page book.

      Interesting ideas here.

7. If any one is looking at a Long play – ASX may tick a few boxes…

8. MLawerence

   You know you outlined your trading method for somebody – Very interesting – But found it hard to get my thoughts around it.
   If you have time – wouldnt mind hearing about it.

   1. Hi RC,

      I’ll try my best… I use old jobbing techniques or market making. No charts or technical analysis just my book and a pencil. I’ll set my bid and offer and always buy on bid sell on my offer and then set my next price and try to make a turn around my last trade. Due to my low risk point to pot ratio I don’t take cuts just trades. You can keep trading to raise or lower your bull or bear if needed. Eg If this morning I sold @60, set a next price of 40-80, sell @80 – next price 60-00 so sell @00. Some may have a stop in place and see that as a loss of 40 points! But I simply write it down in my book as short of 3 @80. If I then just try to take a ‘defensive turn’ of 15p I could buy 2 @65 = 30p profit. I could either pair these trades off with my shorts or add the 30p to my 1 remaining short @80 pushing my bear up to 6910! I could then set a price of 40-90 and if I bought @40 I could if I wish then pair that off with my bear that I raised to 6910 or leave my bear open (quite happily) and say I am long of 1@40 and short of 1@6910. I will then try and make turns around my long @40. So just because I go short doesn’t mean I will close that trade when I then go long and vice versa (there will still be times when you do). The trading program one might use may automatically close the position but I go by what is in my book. If you were to work out the points you made on turns in your book to that on the screen the end result will still always be the same. I simply set my prices and let the punters bring the market to me don’t get pulled around by the market (which I’m guilty of recently)! There may be a lot of waiting involved and maybe only 1 or two trades a day but with emotions in check, patience and discipline aim to consistently and happily (as long as i don’t get greedy) make an average of 100 points a week.

      1. I could have probably put this in a lot simpler terms… Sorry it’s so long winded.

9. FTSE/4 hrs. background — Overnight movement banishes bearish outlook. Linreg 100 started to climb yesterday at 20:00. Linreg 20 crossed above latter on same bar, moving powerfully. SMA 200 began to turn up on August 21 and has now quickened its ascent. Some short-term pullback to be expected, but I think we are now looking at a growth scenario over the next 4-6 weeks.
   FTSE/10 mins, main MACD/Linreg signals —
   September 18: 09:00 Buy; 20:10 Buy (Gradient Linreg 100 positive from 09:10.)
   September 19: 07:50 Sell (Linreg cross); 09:10 Buy (min. MACD line); 10:30 Sell (max MACD line.)

   1. Thanks Jim
      Agree with you in broad terms

10. Hi All
    back on after 12 month break
    for me i will not trade this market till tuesday ish but will be watching it like a Hawk with a view to short it.

    1. why such a long break?

       1. just personal stuff Pal

       2. I think I remember you. You’ve been on this chat as Nelly, weren’t you?

    2. why tuesday ?

       1. just like tuesdays 🙂
          will start to build my shorts once s&p hits 2040 ish and hedge any bad trades could take a week or so but this market is out of control and needs a good pull back not a crash a pull back.

11. I like your headlines ideas, Nick. Very imaginative.

    1. Let’s see if it get’s up there though. The bulls have raised the market by buying the rumour all week. Now taken their profit and run.

12. Interesting apparoach Mlawrence….and 5000 points a year is a fantastic return! If I have understood you basically copy a market making strategy albeit with very wide spreads.

    How do you manage your risk so that positions don’t too big? For example say you set your initial price at 00 – 40….and your sell at 40 gets hit, now you set your price at 40 – 80 and your 80 gets hit etc

13. MLawrence

    Your system – sounds preety good if the market suits this type of trading .
    But

    1. What do you do – When there is a prolonged Trend against your positions?
    2. What is your Stake : margin ratio & how do you tie this to your capital
    3. What is your max drawdown ?
    4. How do you determine what is the distance between your trade entries?

    1. MLawrence – I think your style is similar to the one I seem to have adopted unwittingly !
       RC – Think of it as a series of trades sometimes in one direction Long or Short. Rather than using Stop Losses – you simply add another trade in the original direction of the first trade and again if need be.

       Also – I’m thinking, you may be over thinking everything….”draw downs” & “trends against your positions”….. you should be trading and using your experience and technical expertise accordingly – Buy Support – Sell Resistance – Sell Stops – Buy Stops – Sell The Buy Stops Higher Up And Buy the Sell Stops lower down.

       Sorry it’s a bit brief – I have to go out this afternoon but I’ll be back later …

       1. Sounds good Hugh. Would love to hear more of your view on it!

          As Hugh said when most put stops in we will simply use that price to trade again. The market always goes up and down even if it’s moving in one general direction. You choose the price you set and the spread by how much you’re aiming to make on that ‘turn’ and how quickly you want to get in and out of position. There’s a good chance that once it’s reached one end of your spread it will then either rally or fall. You can set the turn by how confident you think that fall or rally will be.
          As a general rule you times how much your willing to bet each point by the current market price (i’m sure we all pretty much do this) eg 50p a point x 6800 = £3,400 pot. Even if the market went 100 points against you that would only be £50 and chances are during that time you’ve made a couple of turns to help soften the blow.

          1. It can be very boring and take discipline obviously like all trading. I’ve messed up a couple of times this week. Currently on 55 points but will stick to principles to try and finish strongly. As always don’t go chasing otherwise we will all loose!

          2. you trade 50 € a point 😮 and not adding stops ?

             1. you trade 0,50 a point ? In which broker. IG trades 2 (2€) contracts a point – this is the minimum

          3. I cannot understand those mathematics . 100 points loss is only 50€ ?

             50×6800 =340 000

             1. ‘Lol’ 0.50p. But yes if you wanted to trade at £50.00 a point without stops you would want at least £340,000.
                I went short @65 in frustration this morning so looking for 30-80. How confident are you in us getting the bull?!

             2. 6865 short ? 6830-6880 target ?

             3. Yeah buy@30 i’ll go short again @80. Thinking of settling for 15 points though and calling it a day.

                Can’t see anything left to push these markets higher though?

14. the 6856 level is holding for now. Ready to buy a dip around 6830 area for 30 points. 6820 would be great but do not see it coming

    1. If not SPX this afternoon around 2012-2013

15. Closed my DAX short for 60 points. Still got short running on DOW took some profit off and a 30 point stop just above day’s high.

    1. Nice trade on the DAX, same on DOW, still short, should have probably taken 100 points…. I took a long on DAX at 9817 for a scalp at 31 to keep me from falling asleep on this market..

       1. Got a DAX short 9831 – 9 point stop

          1. long DAX 9816 🙂

             1. Closed it for 15 points profit 🙂 GL with your long

16. Cheers Jack

17. All good news out – markets hitting new highs = time to sell?

18. you trade 0,50 a point ? In which broker. IG trades 2 (2€) contracts a point – this is the minimum

19. change my order to 2009. A bit lower than the ES mini resistance, now support at 2003

20. wow so much selling pressure on the FTSE, what’s that all about? Feels rather managed this index for last weeks, hmm.

    1. Yep its shall we say managed/fixed its in the hands of a few !!!!

    2. Markets all up, Wall street hitting new highs. All concerns gone for the time being. Concerns however will soon come back and when they do the market will go down so safer to be short up here than long?

       We buy on weakness sell on strength?

21. Closed @33, didn’t want to miss it. With any luck called it just right…
    I’ll take what feels like a hard fought 88 points for the week and grab a beer.
    Have a good weekend everyone!

    1. ..and to you, going to do the same after a rather profitable week!

22. The market is roughly where I expected it be today….around 6840, but thought we’d have a bigger fall yesterday and stronger rally today. Ho Hum

    Still bearish for the rest of October especially as the FTSE hasn’t beem able to keep more of its gains overnight.

    Mlawrence….think that you are far too over capitalised but if it works good for you. Unlikely that the FTSE will ever go to zero, and therefore the probability it will do it in 1 day is infinitely tiny (we would all be dead anyway). Assuming that in true MM style your overnight market risk is relatively minimal.

    As a guide on average the FTSE intraday HiLo is 1.2% over 30 years and the largest HiLo was approximately 12% (in 2008 of course). So if you were to use 12% of the opening FTSE level or say even 15% to be safe as your capital per contract you would be in theory be more than adequately capitalised. However you appear to be 8 times higher and therefore not reducing your ROCE.

23. *reducing ROCE

24. Hi Javed,

    Could you please explain further sorry? I am very very very new to this. My aim is to simply make 50% of my pot a year – double it every 2 and in turn double my bet. I started with a pot of £60k and trade £10 a point. Remember i don’t use stops but In my eyes this is still very low risk for such good return? Any input would be greatly appreciated.

    1. Other low risk investments would only return 2% for example? I am very much the tortoise not the hare.

25. I also spread bet on finspreads if that helps?

    1. Hi,
       Back now …I’d like to post …but having just got in …not really the right time.
       So I might post later tonight or perhaps over the w/e …so check in sometime if you’re around…

26. No problem. I can see with a sizeable pot of £60k why you would want to be cautious. A slow and steady approach is commendable. Too often investors will have far too much risk and blow their account…..in fact typically 70% or more of traders will do that. So as I said if it works then that is fine.

    To clarify if I have understood you basically stake the whole FTSE notional for each £1 per point trade. Therefore not taking advantage of the benefits of leverage. Leveragae of course can be both a friend and a foe. So need to determine the right level.

    Assuming that you only trade during the hours the cash market is open then the 30 year average intraday movement from high to low has been approx 1.2% or 50 points (current level it would be 85 points). So if you only did 1 trade……buying at the intraday high and selling at the intraday low you would expect to lose 85 points on average and a historical 30 year maximium of approx 500 points.

    The question is of course how you will risk manage your positions at the close. Do you carry them overnight or square off at the close….taking whatever hit or gain that might be? This is where your strategy practically is going to be different to market makers. As they are price makers they can change the price to reflect supply and demand and their own book. However as we are price takers then we don’t have that luxury. We have to take closing price…..like it or lump it!

    Anyway back to leverage. So you can see that you are stumping £6800 worth of capital for each contract when actually £500 would cover most daily eventualities. Now of course I’m not suggesting you ramp up your risk 13 fold. However you could half your capital allocation and see how it goes………if ok and you feel comfortable then keep increasing your risk in steady intervals as the strategy proves successful too.

    Hope that is clear….if not of course please ask any questions you may have.

27. interesting those statistics Javed. FTSE has a 50 point average per day movement.
    you say 85 points now… from which date ?

28. PMS….30 year average since the index began in 84 the intraday average is 50 points or 1.2% of the opening price. Extrapolating that for the current price gives us 85 points.
    I can provide yearly or more current numbers on Monday. For example this year volatality is low so would be surprised if the average is way below 50. In contrast 2007 / 2008 would of course be far greater.

    Something to bear in mind too MLawrence.

29. *wouldn’t be surprised

30. Thanks javed. This is why I tend to set my spread at 50 points and probably why I’ve felt it to be a struggle at times this year (low volatility)! I will be happy to leave positions open overnight and as you say make my price based on the current market in the morning. If I was short and struggling for example id make a fairly high price. If i buy it’s not a cut, i either try to average lower or get a decent turn on it and use that profit to pull up my bear in my book (like my example this morning). Hopefully my longs will then move below my bear which I can then close for profit.
    As you say I am far to aware of the amount of traders that blow their account. Hence my very low risk approach and trying to not get too greedy! V easy to do… ‘Look at how much you made this month, if only you were betting xx a point!’
    In your view with the size of my account what would be a profitable whilst sensible bet per point?

31. Difficult to say what the best level of risk is…..but 1 way would be to increase your position by 1 lot and see how it goes….if the strategy is successful and u find you have more than enough capital then increase by 1 more etc.

    The other rule you could use is 20 day var…..if we say daily Var is 85 points ……to be safe say 100. A month of that (20 days) would be approximately £2000. Leverage of 3.5 to 1 would seem fine for your strategy as an end point. However it may be better to get there using the 1 lot incremental approach.

    Hope that helps.

32. Javed, what’s your target for the end of this so call bear trend you are predicting in September/October ?

33. No target, but think we will see 6700.

34. PMS…..from a personal target pov I’m just looking for September to be negative for the month, which it currently is.

    Has gone from testing 6900 on Friday to testing 6800 today.

35. Closed my Dow short for 60 points on friday..Shame couldn’t hold it longer.

    I have one position open now.

    Long DAX 9742 – Locked 15 points profit – targeting 9800 before any reversals

    1. Position closed at 15 points profit.

       1. I am short DAX 9778 looking at target of 9735. Doable you think or still believe it will go up first?

          1. Hi Dutch,

             Its 50-50 at this stage. Looking for signals around 80-90 area. I am thinking it will first test the pivot at 9820 if it breaks the 9790 area. Where is your stop ?

             1. taken a short at 9778 with a 7 point stop

             2. Closed the DAX short will wait for it to test the pivot.

             3. I don’t use stops but not liking any of the markets, all seem rudderless atm. So got out of that short with tiny profit. Now on the fence till this pm I think.

             4. Are you still holding your short from Dow ? I closed it end of US trading on Friday.

             5. No closed it same like you. I stupidly went long on the DAX over the weekend (don’t ask) and got a late start this morning so have a bit of damage to recover from..

36. dont forget super maroi at 2 then the yanks at 2.30

37. Javed and what about October ?

38. REad a guy who predicts 4000 in FTSE.

    1. you mean a drop to 4K this year?

       1. yes

39. what your target ? and Why ?

40. Something of a disconnect in the DAX / CAC & DJI and the FTSE.
    But …
    DAX (9773) – Sits below it’s Support on Friday at 9776.
    &
    DJI (17248) also sits below it’s Support on Friday at 17257

    FTSE still fails to recover 50% of it’s previous moves and until such a pattern reverses can’t see any point in adding Longs

    1. There is also a huge economical and fiscal disconnect between European markets and US so maybe that starting to become more visible?

41. Wonder if it is going to be one of those trending days ending between
    6750 – 6770

42. FTSE is doing a V-top. 6644 target ?

43. The hope of a no vote was holding it up but what now? I don’t plan on going long any time soon.

44. Short the rallies in ftse?

    1. ….or hammer in progress in ftse (when US opens)?

45. Any levels below 6700 are good for a long term buy

46. short DAX 6792 target 6750 but tbh no clue if this is a wise move! ohh well Pivot at 6820 so guess that’s me stop..

47. FTSE at 6788 5 Min Chart
    Keeps backing off from the 30 period average (let’s see what it does here).
    Can it close above 6791 ?
    What’s the upside 6818 ??

    Today’s board is open now by the way…….!

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