18 Apr

Day 3 – live trading room

Day 3 – Yesterday was absolute out of the ordinary. I have made a call that the (week of) 8th April is major turn for indices. I won’t bore you again with how I do it. So I am not sure why I am so surprised that the markets reacted to my turn, but to see DAX slip from 7680 to 7514 in 10 minutes is out of the ordinary.

The paradox is that the low was 7514, and I bought it at 7511.8. I have attached a screen shot in case you don’t think that is possible. I didn’t think it was either, but there you have it. I have had some quick trades in my life. That was definitely one of the top 10.

spike low dax 17 april 2013

I had tried buying at 7580, but my trade was rejected because the market moved too fast, or the price I tried to trade at was markedly different to the underlying price. That is one thing I love about ETX Capital.

Let me explain: If I am long at 75, and the market moves to 85, and I want to take my profit. Imagine the market goes 88 from the moment I click to ETX receive it? What happens then? Well, most brokers will say that you are filled because it is in their favour. Not ETX Capital. There they will reject both those which are in your favour and those which are not. That is the kind of fairness I like. You get the underlying market, for better or worse.

 

My ETX OFFER: http://www.whichwaytoday.com/exit.htm

 

A few years ago when I traded with the biggest crocks in the market called (name starts with I, but I won’t reveal their name as they would probably put their pathetic legal department on my case again, like they did the last time when they cheated me out of thousands and thousands of pounds), I would never benefit from any improvement in the price. Sure they made a big splash about it in their advertising, but I never saw it materialise. Crocks!

Back to trading: The hard part about trading a price spike is where you enter. There is no manual to read in cases like that. You just have to feel your way. I am looking for a spike in volume and a really exaggerated extended candle. Even then you are still catching the proverbial nail-studded super-charged chainsaw, and it is easy to get that wrong.

I had my fair share of bad experiences, but overall I am still happy to get in there when the market gets stupidly volatile. I remember when Dow opened after 911. It jumped up and down in clips of 50 points. You could buy it at 9200 and 2 seconds later it would be 9150 or 9250.

The rest of yesterday was boring. After the spike the market became very stale, almost scared, and by noon I wrapped things up. There is no point sitting watching a market if you know in your heart you are not going to trade.

Today was quite a routine day. I always put a horizontal line at the opening price. It means that no matter where the Dax opens, gap up or down, I treat any markets above the horizontal line as bullish and below the line as bearish. It works for me. Once the initial opening shenanigans had faded, the market settled into a nice uptrend, and it was business as usual. I traded for an hour and got 15-20 points for my effort. The real excitement today came in the form of the quest speaker. I invited my old friend Larry Pesavento into the live trading room today. Larry and I go back a few years and I was a student of his on his private mentorship.

Larry is a true market wizard. He is humble but he knows his stuff. He spoke to the group about Apple, about Gold, and about the ratios in the market. It was truly entertaining.

The room is currently free of charge. I will probably start charging at some point but for now I am keeping it free. You can sign up to the individual days here:

https://whichwaytoday.omnovia.com/register

Tomorrow is Friday. I hear that the option expiration is going to move the market about. It often happens when there have been crazy moves just before the expiration.

Tom

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2 thoughts on “Day 3 – live trading room

  1. Tom Post author

    30 minutes to write blog – 60 minutes to figure out how to enable comments… thank you Google 🙂

  2. Will

    Hi there Tom

    Firstly let me just say, you are the person who introduced me to trading a few years back, when you did some work with Saxo Bank. I thought the whole risking 5% on divergence was a little crazy but hey 😀

    So I did some of my own research into Divergence, what I found is that it was caused by a Moving average not being able to adjust to the dynamic support and resistance in the market, and that if you tweak the settings enough on the indicator, the divergence would very much completely dis-appear, so what was divergence on one time frame could very much be nothing on another.

    Iv’e noticed you quite big into your Fibonacci analysis, do you still make use of divergence or?

    I also noticed the value of Gold dropping so much, this is highly un-usual, everyone always knew Gold as the safe haven, even safer than money, so whats changed in the global scene to cause such a massive shift in value perception?

    The cash S&P Index versus the Commodity Index correlation I find quite interesting as well. Something very strange is happening in the global scene, what it is, only time will tell.

    Regards
    Will

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