FTSE Futures Trading - Analysis and Discussion

[pavilion103]

My analysis of the FTSE futures chart.

My analysis appear to be different to some of the others' on here, but this is how I see things.

I think the 6880 area is reasonably safe now.

 

[pavilion103]

Also note that this Monday 26th May is a public holiday in the UK.

 

[pavilion103]

The last 6 trading days have been interesting.
There has been mixed opinion about my holding approach, and I understand these views and agree that without the context it would possibly not be the ideal approach.

The last 6 days since taking that first position trade I have made:

Intra-day profit - Net 40 points = $720

Locked in profit from position trade 1 = 35 points = $630

Total locked in profit = 75 points = $1,350


Current open profit = 75 points approx = $1,350.


So of the $2,700 profit in the last 6 trading days, 50% is locked in.

For me, this is a reasonable balance given that I've locked in 50% profit and am still holding 2 contracts on the position trade, with a stop in a technically sound (yet somewhat risky) position.



If 6837 gets taken out, I will watch closely to see how price action responds and look to get in again with multiple contracts if price tests between 6840-6880 and fails again.

As always, I aim to minimise initial risk first.
To take on 2 contracts I am almost certain to risk between 15-20 points combined on a trade.


This next week is critical.
IF it does break down then it's a great position to be in.
Every 55 point move will be $2,000 without having to do anything at all, other than watch and trail my stops, while also trading a 3rd contract intra-day and capturing probably around another 50% of the move through those trades.

Sounds all good in theory.
Let's see how it plays out.

If 6880 is taken out with strength, I will change my analysis, but that hasn't happened yet.

 

[kid hustlr]

Agree with the predictions.

2 things:

- If that was a 3 minute chart we would take a short a tick below Thursday nights bar.

- I'm not sure how comfortable I would be holding such a (relatively?) large amount of open profit over what is in effect a 3 day weekend. This is probably more of a risk when holding longs than shorts but the principle still stands that you are now left open to gapping.

 

[pavilion103]

Agree with the predictions. 2 things: - If that was a 3 minute chart we would take a short a tick below Thursday nights bar. - I'm not sure how comfortable I would be holding such a (relatively?) large amount of open profit over what is in effect a 3 day weekend. This is probably more of a risk when holding longs than shorts but the principle still stands that you are now left open to gapping.

It's a good point.
Something I did consider.

I also considered that a short is less risky than holding a long over the 3 day weekend.

I could get this wrong.

I figure that it could work in my favor though. Looking at the DOW and S&P, I see them as pushing up the last week on lower volume. Same with DAX. I would suspect that Monday night they either
1) push-up again a little on low volume (then the FTSE won't gap above my stop).
2) they push down after this little push up fails (in which case the FTSE May gap down).

I see a strong rise on Monday as unlikely given the context.

I having said that, I could be terribly wrong.

 

[VSntchr]

I also considered that a short is less risky than holding a long over the 3 day weekend.

.

Both yourself and Kid referred to this, is this purely in the context of the current conditions?

 

[pavilion103]

Both yourself and Kid referred to this, is this purely in the context of the current conditions?

I think

1) In the context

2) Price can tend to smash lower quicker and further than a long shoots up. I.e. It moves faster down than up.

 

[VSntchr]

I think

1) In the context

2) Price can tend to smash lower quicker and further than a long shoots up. I.e. It moves faster down than up.

Thanks PAV.

 

[cynic]

Agree with the predictions.

2 things:

- If that was a 3 minute chart we would take a short a tick below Thursday nights bar.

- I'm not sure how comfortable I would be holding such a (relatively?) large amount of open profit over what is in effect a 3 day weekend. This is probably more of a risk when holding longs than shorts but the principle still stands that you are now left open to gapping.

I note that your comment appears to be in reference to a "large amount of open profit". Would your sentiments be any different if it were a large amount of open loss instead?

 

[cynic]

I think

1) In the context

2) Price can tend to smash lower quicker and further than a long shoots up. I.e. It moves faster down than up.

I've noticed that these days short covering rallies tend to cause similarly explosive moves to the upside. However, please don't allow me to dissuade you. (Based upon your postings, you seem to be outperforming me at present.)

 

[pavilion103]

I've noticed that these days short covering rallies tend to cause similarly explosive moves to the upside. However, please don't allow me to dissuade you. (Based upon your postings, you seem to be outperforming me at present.)

All good.
I'm still learning mate.

Value your input.

 

[pavilion103]

I just want to reiterate that I'm not putting myself up as an expert on here. Just recordings my trades and thoughts.

I'm still very much learning and contemplating theories and ideas. This is my journey. All my thoughts are my observations and contemplations.

I love people challenging these ideas and offering alternate perspectives. Go for it!

 

[kid hustlr]

Both yourself and Kid referred to this, is this purely in the context of the current conditions?

In this context yeah but probably more so an overall black swan event. If you think natural disaster or crisis or war etc etc - they are all events which are likely to cause a heavy sell of, as such holding longs over a prolonged market closed period is inherently 'more risky'. Put simply, a black swan event is more likely to cause a big gap down than a big gap up.

I note that your comment appears to be in reference to a "large amount of open profit". Would your sentiments be any different if it were a large amount of open loss instead?

No not really. That being said for me the question is moot because I would never have such a large amount of open loss ( I hope!). Not saying there aren't systems which work well and at times have large open losses, I'm just saying for me the issue is irrelevant.

I've noticed that these days short covering rallies tend to cause similarly explosive moves to the upside. However, please don't allow me to dissuade you. (Based upon your postings, you seem to be outperforming me at present.)

I've noticed this to and I think when market are in some form of range trading (as the FTSE has been on a daily scale over the past few months) the highs and lows can get turned around very quickly as a large proportion of the players are more shorter term in nature.

 

[pavilion103]

Black Swan is a very important consideration as mentioned above.

I was thinking about this Friday night when I decided to stay in.

I thought that it is unlikely that some huge event will cause a massive gap up, but rather if something enormous happened over the weekend it is likely to be negative (e.g. crisis, war etc).

I would be far more nervous holding a long.

 

[pavilion103]

Some loosely drawn in lines on the 4 hour chart.

A bearish channel and a micro triangle forming.

 

[barney]

Some loosely drawn in lines on the 4 hour chart.

A bearish channel and a micro triangle forming.

Another way to look at the same position.

The FTSE seems to be the odd man out on a shorter time frame with the DOW, DAX and CAC all continuing up ..... something has to give.

I think Fridays low will be tested either way, but until the Index's sync up a bit, I'm of the opinion that I have no opinion:

 

[pavilion103]

Another way to look at the same position. The FTSE seems to be the odd man out on a shorter time frame with the DOW, DAX and CAC all continuing up ..... something has to give. I think Fridays low will be tested either way, but until the Index's sync up a bit, I'm of the opinion that I have no opinion:

FTSE definitely odd man out. Relative weakness.

Nothing conclusive at all though.
I think it's more weak than strong but it could push up back to the highs at 6980 again quite easily.

 

[CanOz]

Interesting to see, when the market opens tomorrow, if there is a gap up or down in reaction to the news out of Europe on:

1.) The UKR election result (expected?)

2.) The EU Parliamentary elections

I'm not one to hold through a weekend, let alone a long weekend unless I'm end of day trading. Good luck with that, hope it opens flat or in your favor...

 

[pavilion103]

Interesting to see, when the market opens tomorrow, if there is a gap up or down in reaction to the news out of Europe on:

1.) The UKR election result (expected?)

2.) The EU Parliamentary elections

I'm not one to hold through a weekend, let alone a long weekend unless I'm end of day trading. Good luck with that, hope it opens flat or in your favor...

This is all a little new for me.

Maybe it doesn't work out. I'm not sure.

I am used to studying price action.
I understand that other news considerations should be considered also.

I didn't know about the elections. Maybe showing my lack of experience in not researching all the information which could have any impact on price. How much to take these things into consideration, I don't know.


I follow the basics, such as don't trade around times when major news it out etc.

FTSE doesn't tend to gap around too much.

I don't know. We will see.
I'm sure that either way it won't be disastrous.

Going through every one of these different scenarios that I haven't gone through before gives me important experience and perspective.

 

[CanOz]

Yes, the best way to learn is from experience. I think I'd only worry if Asia had a huge day today. The other markets are all closed so you should be pretty safe....As its looking now the HSI and HHI may close the gap...