Archive for February, 2009

…and I am in the FTSE. 19:56 the Dow reached a new low 7150 and the FTSE was already 1.7% down so I thought to limit my risk and opened a long position on the FTSE. I was sure that the Dow will bounce back. But it didn’t. In fact it went down. Through all the day I was looking for the bottom. And each time it went more down. I even ordered to buy it at 7199 and canceled it because I had a bad feeling.

So what do you do with a trade that went against you? I left it open. After all I am only 15 points down, but at some point I was 33. But it is not promising. The S&P 500 broke the 750 support and the down lost 1200 points in less then 2 weeks. But markets don’t go down in straight line and I am sure I will be again in the money, but it is a risky business.

I am going to sleep not happy with my position which is not good…

This week I opened a CFD account with IG Index and their client service was very good. There was a problem with transferring money from my spread betting account to the CFD and they solved it quickly.

On the other hand I sent to them lists of questions last week and I am still waiting for answers.

I’ve also noticed that they don’t offer the best spread around. On shares Paddypower offers better spread on a random check. But IG Index platform is better…

Hi all

I hate stop losses. I had one on Rentokil at 39p the share went down to 37 triggered my stop loss and went all the way up to 44. Dam!

You can see it quite well on the graph. I should stop using stop loss tool. The way I see it, it is most of the time play into the spread betting firms than it really helps you.

From now on if I want to stop, I will do it by clicking on the ‘sell’ button. This wasn’t a good week for me. Sometimes I feel very confident that I can beat the market and sometimes not. This week I felt clueless. It is good indicator to stay out.

I thought to but the Dow today at 7350, but I wasn’t sure it is clever move so I didn’t. By the end of the day I will know if it was a smart move…

20:55 Binary bets on the Dow. 20 minutes ends at 21:00 and the Dow was 20 points up compared to 20:40. The bet that it will end up lower was very low – 2.7. This means that if in the next 5 minutes the Dow will go down another 20 points I will earn 97.3 points. Worth a try…

The end? it closed 10 points up… and I as predicted I lost.

No.

Both Citi and Bank of America were down heavily today because fresh fears of the ‘N’ word – nationalisation. And there is a good chance that this will happen. But those shares are already 90% from their peek. So not a lot left for the brave shorters.

Take a look Citi. At 2.51 you have 251 to gain. If they are going down they are all yours. But you have to remember that the government is not very keen doing so. If investors will think that it won’t happen then the share may look cheap and can jump easily to $5-$6. Meaning you will loss 250-350 points.

If you remember not long ago Barclays was on quite the same situation. The share went down to 45p then the bank said that the situation is not that bad (and proved it with 2008 report) and the share jumped to 120p.

So my advice leave the banks alone for a while. They jump up & down like crazy and the trend is down, but they are too low now to go short. This you should have done on the day Lehman Brothers said long goodbye.