# Trading the SPI and FTSE



## James Austin

1]  SDI shows diminishing demand (blue elipse) building at this price

2]  SPI struggling to move up to next fib 3270 (yellow circle)

3]  short trade??


----------



## James Austin

1] SDI shows diminishing demand (under purple line) building at this price

2] SPI struggled to move up to fib 3270 (yellow circle) representing overall downward pressure

3] short trade 3247??

4] expecting SPI to find support at fib 3234 or 3218 = exit target


----------



## James Austin

entry: 
red circle -- price finds resistance at fib 3246 and SDI signals diminishing demand at these prices

stop:  
pink line -- just above high 3248

current target: 
3219 or . . . .


----------



## James Austin

well the SDI is no holy grail, surprise, surprise!!

is the SDIndicator completely useless? 

i think it has some value, but like any trading tool, there is an art to using it correctly. My bank account balance post SDI testing is testimony to that. 

the divergence b/w paper trading a tool such as SDI and RT trading never ceases to amaze me.

on the upside, SPI fibs show promise as shown, but translating into a trade plan . . . . a work in progress.


----------



## MRC & Co

lol, like anything hey James!  It's a tough business, that's for sure!

Have you moved on from Franks system or are just looking for another edge?


----------



## James Austin

still my foundation is the D model.

was looking for a way to verify the more dubious DM signals, the SDIndicator wasnt it . . . .

but fibs (particularly that 50%) are showing some promise. 

will see if these have anything to offer, and can be converted into trades in real time.


----------



## James Austin

there is so much rubbish when it comes to indicators, and even if you sift through and find the good ones "YOU" yourself still have to learn to drive your chosen indicator.

nevertheless,
one indicator i think is well worth a look is a leading indicator called "*andrews pitch fork*"

the fork is not as difficult to draw as it might look, . . . after a bit of practice

the chart below shows the fork on todays SPI (30min chart) giving a short signal at the yellow circle, as well as an exit point (the next blue line beneath the yellow circle)

*******************

below that chart is a BHP chart which i happened to be forking after another ASFer posted on BHP.

the chart shows the BHP high meeting and reversing at the fork (blue circle).

in this example, once the fork trader has drawn the BHP fork the general idea is to wait for price to meet the upper resistance line, in this case 3 mths later, before shorting.


----------



## James Austin

the only decent trade i could find today occurred at 3.50pm, and i wasnt onsite, so to speak.

price bounces off 50% fib 3334 and lower median line (blue line), as marked by yellow circles; climbing 40pnts in the last 1/2hr of the session.


----------



## MRC & Co

To be honest James, I don't think any form of fib level, daily level or anything makes much difference post cash hours (not sure if Franks system disagrees, or perhaps fibs will work).  

It really looks like guys with HUGE volume have something to do, and will wait until this cowboy session opens so they can get it done.  This is why you sometimes get price shooting in one direction, and even with huge players coming back to push it back to 'fair value' (i.e. in line with what other indices have done since the cash settlement), you will still get it going in that same one direction.  Usually, you will get it come back just before 4:30pm (such as today), but when someone has a LOT to do, they will use these 'fair value' hunters to just do more and more contracts (this is when a trader can hold until night SPI and hope it gaps back in the other direction, as the big guy has sent it out of whack). 

2c


----------



## MRC & Co

Did that make any sense at all?

If not, let me know and I will try explain what that jibberish was about.


----------



## James Austin

personally i dont have much success after 4pm, sometimes its good, and sometimes i get crucified; my style of trading doesnt seem to work there.

u may be right re fibs etc post cash, not sure!
but in this example it was during cash hours when the long signal came

interesting, for me at least, to see price meet and bounce away from that blue line


----------



## MRC & Co

Oh yes, the bounce was in cash hours, I was just pointing to the big move that followed (a lot came out of cash hours).  But yes, a good example of that 50% level again.  

Cheers


----------



## James Austin

it can be a long haul waiting for a trade sometimes, but finally one appears -- 11hrs later (a long time when intraday trading!)

am enjoying the simplicity of these 2 tools, . . . . we'll see if it lasts.

ftse hits fib 3807 and green median line, then bounces 25pnts back up to 50% fib and pink median line.


----------



## elmundotrade

James, is interesting how this FT software allows you to plot in the chart the close of yesterday follow by the opening of today, it seems like everyday is like that, and then you plot the tools and indicators as you do, seems straight forward, as oppose to having all night after the close of the day which shows in the IG charts........ I can understand now some of the differances....... In IG you can't do this sore of thing can you?


----------



## James Austin

good to see these coming up each session, but it can be a long drawn out wait, 
and you've got to be there at the exact moment it all happens.

SPI hits 50% fib 3438 and lower median line, bouncing up to 3454, and may go further.


----------



## James Austin

this trade appeared right on the open

very difficult to participate when unprepared, or no plan in place

got to be right on the ball or you ("I") miss out

SPI opens right on 21% fib (3519) and reaches high of 3522, pink median line


----------



## James Austin

its probably looking a bit sus, all these trades working out, if its any relief to you, i'm just "testing" the validity of these tools when used in tandem, so no i'm not raking in the bucks

but i am spotting the trades i've blogged in real time, committing to them via simulator and then handing them over to the blog

but i admit, there is a gapping void b/w sim and cash, so we'll see.
for the moment though, i'm quietly confident

this next trade shows the FTSE hitting the 21% fib and at the same time finding support at the blue ML.

this trade took 30mins before it got moving, it kept coming back to the 21% fib, making me think it would fail, but it didnt

entry target 3802
exit target 3824


----------



## James Austin

not high prob trading this one, 
it's the result of *not being well planned*.

price has broken 3495 fib and pink median line, then retraces back to 3495, . . . . will it rise or bounce? *i may as well have flipped a coin*!

once in, i didnt feel it was a good decision, there are better trades available.

short entry 3495
close 3485 (just luck!)


----------



## elmundotrade

James,  have IG increased the min contracts to 2 ha?.. in the ftse 100 $1 contracts....  bastards, making it harder for small accounts holders.  I think they want people like me that are starting out to collapsed.  Hmmm?


----------



## James Austin

sure, they do want to take money from you without a doubt, the trick is to take money from them instead


----------



## elmundotrade

Thats what I'm trying to work out at the moment and almost everynight.


----------



## MRC & Co

Today on the SPI, from the low in the morning through the lunch rally (before the rate announcement), we hit the 50% retracement to the tick at 34s.


----------



## James Austin

yes, u were right, 50% is an important/powerful one


----------



## James Austin

i've been looking for a way to take advantage of some of the bigger intraday index moves. plus i think my personality lends itself towards well thought through trades (ie., taking my time). so i've been exploring median lines.

seem to have found a bit of a guru in the field to. down-to-earth Tim Morge, who's been using MLs for decades and has been trading for 38 years. http://marketgeometry.com/

MLs are a simple tool, but there's a bit of magic in them i think . . . . got to love simplicity.

the example below shows the SPI opening below the ML (top yellow circle) and extending to the brown ML (bottom yellow circle).

this morning i was looking at this ML chart, but had conflicting signals from my other system so i didnt participate; gets confusing when there are conflicting signals, which to believe!!

i wonder if price will bounce at the rose circle? price hasnt quite got low enough yet to know.

but price might get down to 3618-21, we'll see.


----------



## James Austin

update on yesterdays chart.

best entry long at 3618ish (rose circle) which also matched a fib number. low was 3611 = SL  9pnts or greater = survival

exit at next median line (green circle) 3674ish.

nice if u can get it, 
took 9hrs and doesnt need to be watched like a hawk.

** yellow circle shows *possible resistance/ short* at open on SPI today 3675-79


----------



## James Austin

*UPDATE*

best entry long at 3618ish (rose circle) which also matched a fib number. low was 3611 = SL 9pnts or greater = survival

exit at next median line (green circle) 3674ish.

nice if u can get it,
took 9hrs and doesnt need to be watched like a hawk.

** yellow circle shows possible resistance/ short at open on SPI today 3675-79


----------



## James Austin

*UPDATE*


SPI hits median line at 3682 (yellow circle) where resistance is expected.

short entry 3680ish
high is 3685 so SL survival = 3687 = 7 pnts
where to exit? expectation is price will reach lower blue ML.
but will it and when?


----------



## James Austin

FTSE opens right under -21% fib at 3921 (yellow circle), moving down to 21% fib and lower ML (green circle) where it bounces.

short 3921 (**requires speed and planning to take this open trade)
exit 3891 at fib/ML support

long 3891
exit 3904 in anticipation of fib resistance


----------



## James Austin

SPI hits 50% fib and ML20 & ML60 -- short??


----------



## James Austin

*IF the SPI opens below 3714 and
IF the MLs I have drawn* this morning are correct, the studious Greg Fisher has come up with some stats that can be applied to the chart below (SPI 22.04.09)

at the yellow circle, 3715ish, there is a 46% probability of a reversal, and if that reversal occurs, there is a whoping 90% probability price will reach the line pointed to by the arrow.

if it were to do that shortly after open, we are talking 3685ish. as the day progresses, the price will increase due to bar progression up the mid blue line.

anyway, . . . we'll see.


----------



## James Austin

*Beautiful, *
at open SPI heads straight to 3683 = exit target.

*Bummer!* 
. . . missed fill; was waiting for entry at 3713, SPI high at open 3707.

that's trading, . . . another will appear.


----------



## elmundotrade

That's excellent James....how that system of the fork talks for it self!!.... my sympathies by you not getting filled thou .... there is always the next trade..     
I think, I am going to have to study that system and apply it to my arsenal..... too many times now that I see its works...and its potential accuracy, fantastic!!    

Cheers.


----------



## James Austin

yes, there is some magic in the forks.

free teachings from an absolute pro here
http://marketgeometry.com/


----------



## James Austin

when price pushes through the ML at the yellow circle, there is a 70% probability it will continue on to reach the bottom ML.

also, there is a 64% probability price will revisit the mid ML after the initial penetration = entry at 3682

*CPI at 11.30am* may force price into the 30% bracket.

exit target is bottom or 2nd last ML, 
or SL/P, 
. . . which ever is best in RT


----------



## elmundotrade

Thanks for the link James.....


----------



## James Austin

3655 was the target, and finally, albeit at a snails pace, it was achieved.

3682 open to 3655 close

* no worries elmundo.


----------



## James Austin

*feeling long* this morning

we'll see if around open time we get a set-up at the yellow circle 3650-3660ish 

expectation of move up to 3730ish . . . or more?

all depends on how the open pans out


----------



## James Austin

*de ja vu* . . . 

*Beautiful, *
at open SPI heads straight to 3720 = resistance and a worthy exit target.

*Bummer!* 
. . . missed fill; was waiting for entry around base ML.

this entry opportunity did occur as the chart shows, but only if you are trading at 6am, . . . i'm not!!



*note: *the desired entry is where price intersects the base ML. I can take a trade above there, but it is open to higher risk; price may decide to retrace hitting my SL then continue in the anticipated direction

hence i aim for the highest probability entry, anything less *in the long run* will ensure an unprofitable trading system, . . . and we dont want that.

so if i miss my set-up, then tough, 
i wait for the next one.


----------



## James Austin

struggling to stay awake, so i'll put this up to fill some time.

SPI is lacking committment today, so not feeling confident, but the TA is there for the trade

we'll see . . .

*edit: *
exit target is <3715 (not 3725!)
entry 3735
SL 3741
R:R = 6:20


----------



## James Austin

finally got there

exit 3712


----------



## James Austin

MLH & 38% fibs give short signal

ST 3707
SL 3717
target MLM


----------



## James Austin

price is consolidating intraday, back and forth, lack of market committment makes me wonder if there is strength in my TA here . . . we'll see!

a concern with this trade is that price may rise to the purple line, hit my SL, then move in the anticipated direction.


----------



## James Austin

drifting back to my entry + stuck in a wedge

3712 tight stop, above purple line


----------



## James Austin

looking to see if price will begin moving down from yellow circle towards ML

ST 3778 - just under purple line.

Partial exit to cover stop might be the go, given price has been misbehaving for me recently.


----------



## James Austin

caught in another long drawn out wedge (3min chart)
stops BE


----------



## James Austin

see if we can get the SPI to go down to the lower ML


----------



## James Austin

would like to see price rise from the yellow circle, up towards the MLH, 80ish pnts profit

but may bounce around MLM before heading up, but hopefully wont drop below that MLM


----------



## James Austin

price went dn ~20pnts = target not reached, 
then rose back to dbl top = entry 
exit at BE with such a pattern


----------



## James Austin

lower highs and price approaching ML encourage BE exit.

higher highs and price approaching ML encourages a hold


----------



## James Austin

looking to short the yellow circle ~4320ish on the FTSE some time around the open if price plays out


----------



## James Austin

well, 
got my entry as desired, lets see if the ftse will head down to the target shown 
= 50ish pnts profit


----------



## James Austin

with hindsight , that gap on the chart and the fact it hadnt been filled can indicate market bias to the upside.

not that price cant reverse at my entry and move to fill the gap, but the trade prob. is reduced.

-12pnts . . . another lesson


----------

