Maxelerator Ltd

The FTSE tracked the Dow after hours and is over 5150 at the time of writing this blog. This is not a good position to be in if you are looking to go long. The markets could open much higher making your positions to be filled in at much higher prices than you wanted and then if they go down you could end up losing more than what you bargained for.

There are no good short trades either, and its better to wait for a pullback to go short.

In summary, its not a good day to get into new trades.

However, I have decided to not follow my own advice. I am going long on BVIC. My software is showing over 70% success ratio (10 out of 17 in last six months) for the setup that I have on this market. So its kind of tempting to go for it. There is also a support level in place at 400, so if I put a stop loss under that there is a good chance that it might work out.

Another setup I would go for is MAB. It has a good ATR ratio, so likelihood of getting some good returns if it turns out to be in favor are good.

- Trade Guru.

Hi All,

I have been away for some time. It is going to be interesting for next couple of days. I expect the FTSE to pull back to around 5000 in next day or two. Then it could either bounce back or go through further down.

If it goes down, then expect carnage. It could be start of another down trend where it could go down all the way to 3600-3700 before any recovery forming a double bottom. This is what many of the analysts are talking about.

The other possibility is for it to bounce around 5000 for a few days and bounce back. Then the next decision point is expected to be around 5250. It could turn back down or keep going up.

If it turns around from 5250 then again it indicates the start of a down turn which would result in the above mentioned double bottom. If it passes through 5300 and then crosses 5600 then it indicates that we are still in bull market. Its unlikely though

As for my trading strategy, I had made a couple of mistakes and missed out in a few opportunities, so ended up losing a bit in last couple of months. However, I did catch the FTSE on the way down on 4th and managed to recover it all in last couple of days. I could have made a fair bit more today but I cashed out even so that I could start again for next wave. After all its better to get off with cash in hand than none at all.

What is certain is that I would not get into any trades now. I would wait for FTSE to get to 5000 and then see if it bounces back and forth or just goes through. Either direction FTSE takes I would wait for a pullback before going big in whatever direction it takes.

Wait and watch now.

- Trade Guru.

11 January 2009

Its too late to be writing anything today. Remember to follow my tweets on Twitter.com on id maxeleratorltd. All the trades would be there.

Today's trades exclusively on Twitter.

- Trade Guru.

09 January 2009

The non-farm data has came out to be worse than expected and the FTSE reacted the way it should, however Dow rallied late in the day setting the tone for FTSE to start the week on a positive note. There is a candlestick forming though that indicates a risk of turn around.

There were a lot of good opportunities today so I put in a lot of trades for market open on Monday.

CNE
Buy: 363.55
Stop Loss: 353.75

SMIN
Buy: 1020.12
Stop Loss: 994.38

EXPN
Buy: 604.5
Stop Loss: 594

RR.
Buy: 506.41
Stop Loss: 495.09

NG.
Buy: 659.93
Stop Loss: 649.07

FGP
Buy: 413.27
Stop Loss: 404.83

WSM
Buy: 568.88
Stop Loss: 548.12

TSCO
Buy: 416.73
Stop Loss: 408.97

-Trade Guru
Twitter: maxeleratorltd

No trades today!

The non-farm payroll data is expected tomorrow. Some of the sectors have had a bit of pull back to moving averages but I expect a lot of volatility in the market tomorrow. So tomorrow we just wait and watch the turn of the dice.

Turn of the dice. Isn't it what trading is all about?

People say that it is glorified gambling. It really is for most people because that is how they play it. I know of many people who got burned. However, there are always people who get burnt playing with fire, but that doesn't mean we don't learn to light fire and cook or teach it to our kids. It is just a matter of learning how to handle the fire and what precautions to take.

Still the fire can be dangerous, if one is not careful one can lose the house, spouse and more. Possibly that is why the first reaction when a guy announces to his wife that he is going to trade is of fear and loathing. Maybe its because she is afraid that you would lose her along the way somewhere, and since the house would have been lost already she would not have any alimony to count on either. So all in all not very comforting situation from her point of view.

So guys how to get her to see the light of the fire instead of just the heat? Any ideas?

- Trade Guru.
Twitter: maxeleratorltd

06 January 2010

The BDEV trade went sour. It would have been ok but I broke two of my rules. First, my last blog said it all, that I had a good feeling about this. As soon as you put your feelings into this you lose. That is what happened. I broke my rule of just sticking to my strategy instead of using feelings.

I broke another rule of placing a trade too close to the day's high and low, so something which would have been harmless wiped my profits for today and yesterday. A lesson to be learnt here.

Today's trades:

RDW
Sell: 134.37
Stop Loss: 139.23

QED
Sell: 62.64
Stop Loss: 65.36

DGE
Buy: 1071.52
Stop Loss: 1056.48

-Trade Guru.

Do not forget to follow me on twitter: maxeleratorltd

05 January 2009

All the sectors are overbought, so its nearly impossible to find long setups out there. Horse has already bolted from the stable, so better wait for it to come back. So I am going short today. Its a bit dangerous going against the trend but I have a good feeling about this. US housing sales have fallen by 16%, the sector and both the stocks are overbought and there is a minor sign of pull back beginning on the Household Goods sector.

BDEV
Sell: 126.14
Stop Loss: 131.06

RDW
Sell: 134.38
Stop Loss: 139.02

Now as far as the trades put in yesterday, BDEV did not trigger and I have cancelled it to replace with the new trade above. The other two were spot on. BT.A and BAY triggered and so far so good. With the three trades in last couple of days HFD, BT.A & BAY, my pot size has increased by around 2% in 2 days. I am targeting 10-15% return for this month.

Its a tricky period to be in the market though. Like I said earlier the pull back to moving averages is imminent, and the US non-farm payroll data around the corner it is going to be a hairy ride. I would see if I need to get out of some of these trades on or before Friday morning.

- Trade Guru.
twitter: maxeleratorltd

PS: I would also be putting all the trades on twitter. Do not forget to follow maxeleratorltd on twitter.

04 January 2009

Looks like everyone who wanted to take profit did so last week.

Everything was awash with green today. It makes sense too, as though markets have been overly optimistic off late, the fundamental reasons for the rally stay the same. Fed indicated that the interest rates are going to stay low for any foreseeable future, the new base price for gold has been set at the price India bought the last lot, for the first time in ages people are expecting the US payroll data to move into positive territory. If this optimism continues then the current bull run would go on through this week. However, almost all sectors are overbought at the moment so the pull back to moving averages is imminent.

This Friday's non-farm payroll data could be the turning point. In next few days most analysts would come up with projected figures for the payroll. If the data shows even higher numbers than analyst projections then the pull back could wait for a few more days. If the data shows growth but not as much as analysts expect then the market is likely to pull back considerably on Friday and then in next few days further bulls market could resume. If, however, the payroll data is still in negative territory then it would be a dramatic pull back, which would continue for next few days.

The calls I had made yesterday turned out to be good ones. Out of the two trades I had put in, CCL did not execute so I cancelled it. The HFD trade triggered and I got in long at 407.01 and it closed at 419.90. Good returns for a days work!

The other setups that I wanted to get into but could not do so yesterday also mostly turned out to be good (GFRD, KFG, RRS), but those are the missed chances now. Its time to look to the future!

My trades for today are:

BT-A
Buy: 138.96
Stop Loss: 134.64

BAY
Buy: 191.82
Stop Loss: 185.68

BDEV
Sell: 122.54
Stop Loss: 128.06

Can you believe that I am going short on something in these market conditions?

- Trade Guru.

03 January 2009

FTSE 100 has been on a downtrend since 11^th October 2009. The accompanying chart shows the trend line which culminated in a symmetrical triangle recently. On 22^nd and 23^rd December the index finally broke through the resistance of this down trend. The year end profit taking resulted in Dow to drop after close of FTSE on 31^st December so the effects of this drop would cause FTSE to open considerable lower on Monday, 4^th January. There is likelihood of further profit taking for people who missed out during holidays so there could be further drop for a day or two but the ascending triangle along with MA20 & MA50 provide support between 5250 & 5325. Also most FTSE 350 sectors that are in up trend are trading too far from moving averages and combined with the drop in Dow on 31^st means there is a likelihood of most of these sectors to show pull back to moving averages early part of next week before any further rally.

In general for next couple of weeks I would be looking for long setups once FTSE hits the support levels between 5250 to 5325 and then look to cash out assuming the next peak would form between 5600 and 5675.

My shortlist from scans has LLOY, KGF, VEC, PFG, GFRD, BDEV, RRS, CCL & HFD. I would have liked to put trades on all of these if possible but I do not have good brokers so most of the times I can not even put any trades even if I want to. I have CMC Markets and Barclays and each of them have problems which force me to let go of opportunities where I know I could make money. CMC has good commission structure but it has some torrid spreads. As an example the CFD spreads being offered on CMC Markets at 16:30, 3^rd January for some of these stocks are ridiculously high.

For PFG CMC Market is offering Buy price of 937 & Sell price of 750, that makes the spread to be whopping 187. The corresponding CFD spread on Barclays at this time is 1.25. Also CMC market has a business rule where the if done orders can only be placed a minimum distance of twice the spread so for PFG the closest buy stop order can be placed at 1311.01 (937 + 187 * 2) and sell stop order at 375. This is just plain simple stupid. There are a lot of such setups that I am unable to place on CMC Markets as a lot of its stocks have very high spreads or sometimes spread is not too high but the rule which forbids you to place orders less than twice the spread makes those orders unviable. They also have a rule where you can not place both stop and limit orders with your if done order. You can only place one of these at a time. This makes this platform very dangerous because if you are in a trade and they choose to increase the spread to such phenomenally high levels, you could effectively get screwed. The only reason I can think of such restrictions is that they want to discourage people from putting if done orders, and they prefer day traders. Their low commissions corroborate that as you get good spreads and low commissions on indexes you would normally day trade, but if you are into end of the day trading you would find a lot of the setups are unviable due to these restrictions.

Barclays on the other hand have good spreads, which seems to be either the same or less than CMC Markets for the setups I have been seeing. They do not have any restriction on the minimum distance you could place your orders. They also allow stop and limit orders to be placed at the same time you place your if done orders. So they do not have any of the problems that are there in CMC Markets. However, their commissions and margin requirements are very high. Its so common to see margins of 25-50% on LSE stocks. They also have a minimum commission of £17.50 so this is not the right platform for traders who put many small trades. So again I have to let go of many opportunities due to this. I am still looking for better platforms and as soon as I find one I would let you know what I have found.

With these kind of problems like most of the other days, I have to let go of most of these opportunities today. However I have managed to place the following trades today:

On CMC platform:

CCL

Buy stop: 2168.79

Stop Loss: 2126.21

Limit: None (CMC Markets does not allow placing stop loss and limit at the same time when you place if done orders)

HFD

            Buy stop: 407.01 (I wanted to place it much closer but CMC Markets does not allow placing orders closer that twice the spread)

            Stop Loss: 397.36

Limit: None (CMC Markets does not allow placing stop loss and limit at the same time when you place if done orders)

On Barclays, some of these stocks need 30-40% margin and there is minimum commission of £17.5, so I have to be very careful on what trades I put on this platform. There would be a lot of good opportunities opening up later next week so I do not want to use up the available margin at this stage.

So the other opportunities which I would have gone for under normal circumstances I would be passing these on and wait for better opportunities would present themselves in next few days. Each of these could have been good opportunities if right combination of spread and margin were to be available on some trading platform.

Also, for those of you who are curious I maintain my trading history in a spreadsheet and I am trying to figure how best to upload it to this site so you would be able to see my trading history for yourself. Give me some time to sort this out.

- Trade Guru.

Warning for readers of this blog!

Even though I do have fortune telling skills I do not yet know how to apply these to markets. The markets have their own free will which I can not forecast. All I care about is some set of assumptions and if and when those assumptions come true I come out with cash in hand. There are numerous times though when those assumptions may not come true and I could lose money, and so could you, if you try to follow any of these strategies. If you use any of this information for your trading, you must do so at your own risk. I do not offer any guarantees.

- Trade Guru.