Trading the XJO with CFDs

[>Apocalypto<]

Re: Trading the XJO with CFD's

Guys a little work in progess of mine see attached chart.

Now I have put in a way a use to see what is happening but this is pie in the sky I don't trade off it. I started doing this then I saw it was just like Gann angles so I copied Gann with out even knowing it! I called it my break out/break down strategy. First line shows break out = possible short trem trade. Second line = main direction. third = overall move only use on dropping stocks on major corrections.

It's hard to explain these lines in words but in my head I know what it means but its far from usable yet.

Here goes:

On breakdown I put in first resistance line + top resistance line as where I think the correction may travel during its course.

Once first resistance is broken with a few rises I add the trend with a second posible rise line that will form a triangle with top resistance.

Second resistance (middle) I use to see whether new rally has any strength.


I want to see price stay above bottom line and move to end of triangle and rise out to really tell me to go long.

I know that was rough but please all let me know what you think.

Short term bullish but it is weakening posible drop, over all still bullish till base trend broken.

*these are just my ideas of tracking price through a correction*

 

[Uncle Festivus]

Re: Trading the XJO with CFD's

Hello TI,
I'm not sure how you derived your sloping resistance lines. Are these just arbitrary lines as I don't follow your reasoning.

As far as the Oz market, it's a perenial bull untill the super money dries up, & thats not going to happen till maybe July when the baby boomers start withdrawing tax free.

 

[>Apocalypto<]

Re: Trading the XJO with CFD's

Thats all good UF.

Did not think the way I explained it would make any sense and like I mentioned it is just me mucking about!

Thanks for the info on asx super.

 

[>Apocalypto<]

Re: Trading the XJO with CFD's

UF
How are things going?

Hope you have been going long mate.

I am sitting on a real nice winner, now waiting for weekly confrontation then I will add on to this trade

Looks like we could be back at 6000+ very soon on IG Aussie200 cash!!

 

[CanOz]

Re: Trading the XJO with CFD's

Following your thread closely fellas, just got IG markets this week.

Looks like it may be a while before i try and trade anything but shares though, gotta get a feel for this. Please keep posting, its helping a great deal.

Cheers,

 

[>Apocalypto<]

Re: Trading the XJO with CFD's

Following your thread closely fellas, just got IG markets this week.

Looks like it may be a while before i try and trade anything but shares though, gotta get a feel for this. Please keep posting, its helping a great deal.

Cheers,

Hi CanOz how r u?

I'm Joseph

great to see your interest. I have been with IG since last year and had major probs with there tick charts but the new charts are much better.

I use Bourse data for all my share & XJO decisions.

Right now I am holding 1x Aussie200 contract 1 x Wall street cash both doing great. plus added CSL x 100 to the mix today but got it late in the day.

i am still trying to get a complete understanding of how they work out there overnight prices.

I am also looking at Pacific Continental they offer CFD's over the actual XJO and DOW only open during there market hours

keep in post!

 

[>Apocalypto<]

Re: Trading the XJO with CFD's

hey man forgot to add that.

trading the indexs on IG are very fast paced make sure you really study then before you trade them sick to the minis at the start $25 a poit really adds up quick!!

 

[CanOz]

Re: Trading the XJO with CFD's

hey man forgot to add that.

trading the indexs on IG are very fast paced make sure you really study then before you trade them sick to the minis at the start $25 a poit really adds up quick!!

Yeah i gathered that, just happy to trade shares CFD's atm but very keen to see if there are opportunities to be had.

Thanks for the info and advice, keep it coming please!

Cheers,

 

[>Apocalypto<]

Re: Trading the XJO with CFD's

CanOz

How long have you been trading CFD's what is you feeling towards them?

I also trade share CFD's a lot but sick to the top ASX200 shares.

Are you using a controlled risk account? the Garented stops are so dam wide that it is hardly worth using them one I placed had to be 400 points a four buck drop would wipe your position out anyway but spose in a crash it may be helpful!

What do you think of IG's spread?

 

[Uncle Festivus]

Re: Trading the XJO with CFD's

Hi TI & Canaussiuck,
Seeing how we are all learning here, just thought I'd run my current IG markets mini 200 $5 position sizing strategy with you for comments. It's working fairly good in these conditions.
Entry criteria not discussed, only position size and stop loss strategy.

First, I determine my maximum position size my funds allow me too (my maximum I allow for trading risk), which is currently 20 contracts.

Next, allocate/divide this to entry levels eg open the first position with 5 contracts, set stop level 5 points away - setting the stop at order entry makes you disciplined so as to not let losing positions get out of hand. Now if entry was correct, open second position of 5 at 5 points away, and adjust the first position stop loss to initial open price (break even).

Continue 5 X 5 & adjusting stops for next 10 points and contracts till max position obtained (20) or exit criteria is met. Each time adjusting stops of previous open positions to 5 points away from current open position, so that if/when the last position is opened the first position is 10 points in the money (ITM), the second is 5 points ITM etc. Then, reset stops every 5 points away from then on, let profits run with tight stops or close on exit criteria.

The most you are exposed to lose is $125, but pyramiding in to gain.

Use at your own risk

 

[CanOz]

Re: Trading the XJO with CFD's

Hi TI & Canaussiuck,
Seeing how we are all learning here, just thought I'd run my current IG markets mini 200 $5 position sizing strategy with you for comments. It's working fairly good in these conditions.
Entry criteria not discussed, only position size and stop loss strategy.

First, I determine my maximum position size my funds allow me too (my maximum I allow for trading risk), which is currently 20 contracts.

Next, allocate/divide this to entry levels eg open the first position with 5 contracts, set stop level 5 points away - setting the stop at order entry makes you disciplined so as to not let losing positions get out of hand. Now if entry was correct, open second position of 5 at 5 points away, and adjust the first position stop loss to initial open price (break even).

Continue 5 X 5 & adjusting stops for next 10 points and contracts till max position obtained (20) or exit criteria is met. Each time adjusting stops of previous open positions to 5 points away from current open position, so that if/when the last position is opened the first position is 10 points in the money (ITM), the second is 5 points ITM etc. Then, reset stops every 5 points away from then on, let profits run with tight stops or close on exit criteria.

The most you are exposed to lose is $125, but pyramiding in to gain.

Use at your own risk

Firstly let me say that i have not yet begun trading any CFDs. I want to become more familiar with the platform first, then enter and exit a few trades using only CFDs for stocks.

To answer TI's questions, it is a controlled risk account that i have, yes. I have noticed that the stops can be quite wide, as i tried placing a few trades without the funds available to see how it calculates the minimum stop values.

The spreads seem fine to me on stocks, better than Market Maker, at least on shares, but i need to do more trials first. What is your experience with them so far on stocks and indices?

UF - your stops are they GSL or standard? I get the feeling your stops are standard, other wise you wouldn't get a 5 point minimum? Have eitheror of you traded gold,oil or other commods yet?

Keep the posts coming please, as i value your experiences. Thanks guys.

Cheers,

 

[Uncle Festivus]

Re: Trading the XJO with CFD's

UF - your stops are they GSL or standard? I get the feeling your stops are standard, other wise you wouldn't get a 5 point minimum? Have eitheror of you traded gold,oil or other commods yet?

Keep the posts coming please, as i value your experiences. Thanks guys.

Cheers,

Yes, standard account. The standard account also gives you the option of doing a controlled risk trade if you want, instead of being restricted to GSL account.
I dabble in gold sometimes, but found that as the big moves are between midnight and 4am it was too risky, even with GSL's or controlled risk. Mind you, gold is highly leveraged eg every cent change equals a $1 so can be very profitable if you get it right.
Another thing to be mindful of is that gold and oil etc are traded in other currencies so you will end up with a foreign currency account with IG if you do trade these. You will at some stage have to convert back to $AU at the prevailing IG conversion rate if you want $AU back.
Another instrument I regard as pure gambling is the binaries. I have a bet on the FTSE & Mini200 indices binaries sometimes. Good if the market starts with a big move in one direction & then ends up going the opposite direction the rest of the day.
UF

 

[CanOz]

Re: Trading the XJO with CFD's

Another thing to be mindful of is that gold and oil etc are traded in other currencies so you will end up with a foreign currency account with IG if you do trade these. You will at some stage have to convert back to $AU at the prevailing IG conversion rate if you want $AU back.

What are your thoughts on hedging the position with a currency trade? Or could this add salt to a wound?

Cheers,

 

[MoMoney]

Re: Trading the XJO with CFD's

each personality will be different on how to trade CFD's. They are such a new instrument that we are all pioneers.
i have learnt that with my "rush into things", "bull out of a gate" personality that a trading plan and taking profits....fear is my friend, not greed, is my "style", that the old clique comes into play..."you cannot go broke taking a profit".
I know everyone is different, but for me, slow down, learn to/be patient, and treat CFD trading as a source of income.....be happy with a profit target of $1500 ^ a week
let my blue chip portfolio ride the bumps capital gains wise and pay divvies and let my speccie portfolio either die in the a$$ or return wicked results.
Writing call options with CFD trading keeps me more than comfortable

 

[codeowl]

Re: Trading the XJO with CFD's

Hi there guys,
I have just started looking into the stock market... I got the opportunity to buy in on a private offer of an up and coming company that has a technology that will clean water. This has opened my eyes to the Stock market. I started researching it and buying money mag, etc... I saw an article on CFDs and then bought a book on them, Supercharge Your Trading With CFDs, by Jeff Cartridge, which I found to be a great read. After reading that I started researching CFD Providers, I found:
CFDTools
which had some comparisons, and decided I wanted to go with the DMA model. After a heap more research I thought that IG Markets looked good. I then started researching charting and T/A techniques, also looking into software packages. Which led me to groups and forums, which in turn led me here. I am a real novice and have never traded before, the private offer I bought in on never went through a broker, just bought the shares straight off the company. I have bought a heap of books that are coming in the mail, on everything from Trends to Options, and Warrants as I want to learn about all the main instruments... to know what is better to use for different circumstances. So it is fantastic to come across threads like this.

Trade_It:
I saw your post where you said:
"I have always been very interested in trading the xjo. CUZ IT HAS NO GAPS!!!"
How do you mean it has no Gaps. is this the case with all indexes?

What are you guys using for charting software?
Incredible Charts?
AmiBroker?
MetaStock?

What kind of strategies do you use for finding entry/exit points and setting stops when trading CFDs?

I have a plan to do more research on T/A and get a good understanding of a number of tools to use, then find some software package that will help me to use the charts etc... then paper trade for a couple of months.. to try and refine a strategy, and then start off with a small account of say a couple grand with IG Markets.... and see how I go.

If any of you guys have some suggestions I would love to hear them.

Thanks for taking the time to read my post....

codeowl.

 

[codeowl]

Re: Trading the XJO with CFD's

Trade_It, did you end up going any further with Pacific Continental? I had a look at their site and their software looks great. They don't seem to be a listed company, I wonder how you would find out about their ability to pay up if there was a crash or something.

Does anyone else here use Pacific Continental?

code...

 

[Uncle Festivus]

Re: Trading the XJO with CFD's

What are your thoughts on hedging the position with a currency trade? Or could this add salt to a wound?

Cheers,

Not sure if is worth while as

a) probably take up too much margin capital to hedge effectivly &
b) the small variation in exchange rate (over the course of the trade) won't make a big difference to the profit/loss anyway, assuming CFD trades are short term eg max of 1 week maybe at most?.
c) just another thing to keep an eye on/take up time. I try to keep the number of open positions to a manageable number.

UF

 

[Uncle Festivus]

Re: Trading the XJO with CFD's

What kind of strategies do you use for finding entry/exit points and setting stops when trading CFDs?

I have a plan to do more research on T/A and get a good understanding of a number of tools to use, then find some software package that will help me to use the charts etc... then paper trade for a couple of months.. to try and refine a strategy, and then start off with a small account of say a couple grand with IG Markets.... and see how I go.

If any of you guys have some suggestions I would love to hear them.

Thanks for taking the time to read my post....

codeowl.

hi codeowl,
Charting - intraday trading I use IG candlestick charts, investing longer term I use Bullcharts.
For positon size and stops see my post above?
Entry/exit - 5 min candlestick patterns, macd, RSI, market 'mood', instinct/gut feeling?
TA - start with candlestick & work your way up to Elliot or Gann (then you can argue with the rest of them?)?
You probably need $5k minimum to trade effectively?
I'd suggest to start with IG L1 platfrom with controlled risk trades

UF

 

[CanOz]

Re: Trading the XJO with CFD's

Not sure if is worth while as

a) probably take up too much margin capital to hedge effectivly &
b) the small variation in exchange rate (over the course of the trade) won't make a big difference to the profit/loss anyway, assuming CFD trades are short term eg max of 1 week maybe at most?.
c) just another thing to keep an eye on/take up time. I try to keep the number of open positions to a manageable number.

UF

Yes, after i thought about it didn't make too much sense .

I guess i'm just thinking of ways to use two instruments together.

A longer term position in something like gold (long), and a longer term short on USD, you could do, if the trend was playing out that way, but which pair would be best?

Just thinking out loud UF, I think i'm way out of my depth here.

Cheers,

 

[>Apocalypto<]

Re: Trading the XJO with CFD's

Trade_It:
I saw your post where you said:
"I have always been very interested in trading the xjo. CUZ IT HAS NO GAPS!!!"
How do you mean it has no Gaps. is this the case with all indexes?

Hi Codeowl

Now on Bourse the xjo and xao have no gaps on open they can't but on the Aussie cash 200 there can be gaps nothing like stocks but they are there.

Pacific do have a contract that is based 100% on the xjo from 10 -4 normal trading hours. It is market price x 5% for margin and market price x .1% for brokerage. you make 1$ a point per contract.

now the advantages of the aussie200, it has no brokerage (is included in margin)

also cuz in it just about 24hours you can get out of bad situations before aussie market opens.

the other month on CSL it looked great on the short side then next day opened up 6$ that scared me a lot cuz i saw all the puts bought on sanford day before owch! so gapps

Also Indexes in my opinion trend much more smoothly on a weekly chart.