Posts Tagged ‘Dow’

13:20 Sometimes it is better not to listen to guts feelings… Barclays is 11 points down from my order but I chose not to cancel my sell order… Glaxo is 4 points down from where I bought it…

8:23 I am in with Glaxo but something hold me form entering Barclays. So I will give up this one.

7:40

Looking into the News Calendar it seems that all eyes are looking for tomorrow Nonfarm payrolls. Good results can send the Dow around 11k bad one and we can see it back to 10300 level.

So I don’t expect big movements today but here is my orders for Thursday:

1) Barclays Buy 346 stop loss 331 target 376 or Sell at 331 with stop at 346 with 301 as a target. Reason: Triangle & outside bar on the daily chart.

2) Glaxo. Buy 1139 stop 1121 target 1175. Reason inside bar on the daily chart near support level. MACD & Elder ray are rising.

Good luck

Hi all,

Have a look on today Dow Jones chart before 14:30

You can see that in 12:30 the high was 10451 and low of 10420. The next bar the high was lower and the low was higher which gives me some indication that a strong move is on the way. Nothing is really happening on the next two bars.

So how do you trade this? there are two options:

1) Go with the trend.

2) Ignore the trend.

In option one we switch to a different time frame to check the trend. I just multiply the current time frame by 4 or 5. So if I am using 30 minutes chart I will switch to 2 hours chart and if I am using daily chart I will check the weekly. Now that I know the trend (in this case it is up) I will put a buy order a bit above the recent high. In this case it is 10451 so I will put my order level at 10455. Because the trend is up I will ignore the down side.

In option two I don’t really care about the trend. This is more for quick trades where you try to catch a small movement and you don’t care if it is correction or changing of direction. In this case I will put an order to sell at 10415.

Target & Stop loss? it is 30 minutes chart so the target should be quite small and so the stop loss. But the stop loss shouldn’t be very tight because you can stopped out and miss the move. In this case I would put 30 points stop and target of 40.

and look what happened at 14:30:

You can see that in 14:30 there was sharp movement down which broke the 10420 level. This trade would have been successful if you were using option 2 and ignore the trend. If you were using option 1 and stick to the trend nothing would have happen for you today.

I do think so!
After amazing rally last week and yesterday I think the Dow is ready for pull back. The RSI is almost 70, the Stochastic is 97 so if you don’t want to go short stay out!

The index is way above the 22 ema so in my opinion we should see the Dow back to 8550.

On the other hand the MACD is still rising which gives us mixed signals. So I think it is a smart idea to use a tight stop loss.

It is! and this is what my friend has just did. And this is how he did it with 3 trade only:

Bought a PUT option 4700 on the DAX for at 7, £10 a point. A day after the Dax lost 3% and the option was 40. 33 points = £330.

Last Friday he open a short position (£4 a point) on the Dow with 100 points stop loss and 50 points profit target. The Dow almost touched his stop but changed direction and he got the 50 points or £200 profit.

Yesterday again on the Dow he went short with £5 per point and got 120 points or £600 profit.

All together £1030 profit and with the £70 the balance is £1100.1471% profit in 10 days. Amazing but…

I don’t think this is the right way to trade. In fact I think my friend did all the mistake he could… but he has a lot of luck. The way he trade is more like gambling when you may have a good strike but in the end the Casino most of the time wins.

Mistake number 1:

Trade on all the money in the account. It is ok when you have only £70 in your account to trade on all. But when you account is more than £1000 it is not wise. One bad trade and you are out.

Mistake number 2:

Thinking that only the £70 is his money. He always says I don’t mind losing – it is only £70. What I try to explain him is that was £70. Now it is £1100 and it is belong to him. He can take it and put it in his bank account.

Mistake number 3:

No strategy. He opens positions according to guts feelings. He follow the market quite long and he has the experience, but he is not using technical analysis to back up his instincts.

Today he opened a new position on the Dow. This time it is £15 a point with 75 stop loss and 100 points profit target. Again this is a mistake because the ratio between potential loss and profit is to low. You should always aim for 2:1 at least.

I do hope for him that it will go well for him but I don’t recommend you to follow this method. Although with 1471% profit some will be tempted

The Dow is 8185 after it has already touched 8250 today. The FTSE 100 is 4189 and the Dax is 4704. Is it the time to sell? I think we are getting near the point when the direction is going to change south. I think that the economies are still in dire situation and there is no real substance for the latest rally.

But the question is when to enter the market and sell? it is a good question which I don’t have the answer but I feel that by somewhere next week the direction will change. It is only guts feeling which you don’t really want to count on but I am quite sure that we will see the FTSE & the Dow below 4000 and 8000 respectably.

What I am going to do is wait and see. Once I see that on both side the atlantic the indexes are down by more than 1% I am in. Selling.

Hello all,

I have bought today a put option on the Dax. Why the Dax? The FTSE 100 didn’t jump as high as the German one or the Dow. While the Dow jumped from 6500 to 8000, and the Dax from 3600 to 4500, the FTSE was much more solid and jumped from 3500 to 4000.

So if I am right and the market will change direction, my logic says that the FTSE will slide slower than the other two. So I left with 2 options. The Dow options seem to me expensive so I’ve decided to choose the German index.

Bought it for 36.3. The lowest price today was 30 but I missed the bottom. I guess you can’t catch the bottom. So I have 4.5 weeks and my target is to double the money. I will keep you updated.

Hi all!

I am not that impressed with the last rally. It is nice to see the market changing direction, but I don’t think that this is the end of the bad period. But I do think that the rally will continue for one or two days depends on the Goldman Sachs results tomorrow. If I am right then I will buy a put option on the FTSE 100 and maybe on the Dow Jones as well.

So I am looking to buy the PUT 3750 for May. I think by Tuesday it should be cheap enough. The nice thing about options is that you know how much you can loss. In fact every time that I buy one I consider it as ‘lost money’ and I am always looking to double my investment. Sometimes it works, sometimes not, but I have more than 50% success which is enough

I’ve bought Tesco shares on Friday. As I said before I do feel that we are near the bottom and it is time to buy good companies. Tesco is one of them. Of course no one knows where the exact bottom will be. We can see the FTSE well below 3000 and it won’t be a big shock for investors. But I try to take a different direction than the market. Buy when everyone sell, sell when everyone buy.

So I buy strong company with low debts and high income. Tesco is one of them. If the share price will fall more, I will buy more. Same with the other shares I have.

Another thing that I want to do is to buy the Dow at 6000 for the long term and check it in two years time. It may be that it won’t touch the 6000 mark or the opposite, it will go down to 4000. But one has to try and calculate when is a good time to enter and I feel around 6000 is good enough for me. 10 years from now I am sure it will worth much more.

…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…

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…