Thursday, October 25, 2007

Thursday, October 25th

FTSE opens with a classic

Gap up, sell-off, rebound. It was the scenario in my head prior to the open, it was the scenario the FTSE was playing ...and I botched the trade none the less. Real shame on me

What happened:

Entry on the second blue bar cluster up at 6566.5


As you can see on the left, there is huge volume printing at that level and sure enough it wasn't taken out. Instead the FTSE made a 3rd move down, nearly hitting my 25 tick stop, with the low at 6556.5 of that move. From there we bounced. What you can't see on a range chart due to it's nature, is the struggle FTSE made crossing that 6567 level. It traded above only to be sold down again and again. That's why I took a 1 tick exit. The entry for the trade was just to high, so the Risk:Reward was against me. Of course as you can see on the chart the FTSE continued upward for a double top, which would have given me a sweet 20 tick profit at least. But at the time, when I exited, it was in the balance and I did not want to risk it with a possible break to 6550 on the downside.

What I should have traded instead was the CAC40. It had the same chart pattern as the FTSE, but as it starts trading 1h earlier, the pattern was a lot clearer.

I've market the comparable entry level. As you can see, the CAC40 did also not move up on the entry bar, but the breakdown after it was better confined. It went 7 ticks down to test the 38.2% level at 5709, compared to 20 on the FTSE.


Coming back from a meeting I see the market rallied without me. So I'm looking what to do...

Currencies...CAD trying to break below that multiday low again...Sometimes it helps looking at the cash chart, so here it is, together with the valuable Fib-target lines


Using the July / August consolidation Low to High move, I get the consolidation end of September correctly as first downside target at parity. Next target is now 0.9488 or slightly below the 0.95 level, which makes sense for a stophunt. In the futures that would mean the 1.0528 level. But it might take another FED rate cut to get there.


Short FTSE 6607 on downticks on all US and european indexes I follow


Cover at Fib volume support (brown line) for +10 ticks


Short AUD 0.9043

It's below a 26 year high and not taking it out on the second attempt


stopped +2, I don't like the bottom building at 38 to 40. 12 minutes in the trade and AUD is not able to break the lows

These late FTSE trades are really fast. Long 6599, Exit 6502.5


Missed the reentry, but that red bar below my entry together with the fast action spooked me, as it was already annonced on my exit bar with the FTSE jumping down on 50c orders on the Ask which were thrown in, to keep FTSE down.