Index Swing Trading & Technical Analysis - Latest Posts

Finally after 2 Years of consolidation FTSE has made new highs with the prospect of a new bull run to follow.Its always difficult to ascertain whether a break-out is a fake out or genuine and sometimes the only way to deal with this is to enter the position against the probability that most break-outs are successful. The more difficult aspect is stop loss positioning.

The increase in volatility across Indices has been quite notable over the last 6 Weeks and this often occurs before a deep correction or a trend change. Therefore here's a few longer term charts of some Indices to look at the bigger picture.

DAX

From the outset this looks like a healthy chart. There are historical corrections on DOW and SPX that look identical to this one and on every occasion the Bull markets continued in both Indices. As things stand, shorting this would be a risky place to be.

First of all, Happy New Year to all who have followed the blog and particularly to everybody who keeps in touch with emails and suggestions about the site.As you know, 2014 was a quiet year on this blog not just because of commitments outside of trading and a stint abroad with no internet connectivity, but also because finding trade set-ups I felt confident about was a real struggle. Whilst I should apply my system to every trade, it just wasn't giving any signals on the charts I followed and traditional T.A became the favoured method, albeit sometimes unreliably.

I'm somewhat late posting details of this trade as it was entered by an electronic limit order at a time where I had no internet connection to tweet it live, although details of the trade possibility were posted on the ADVFN forum in advance.In short, here is what attracted me to this trade, entered at 1.4260:

Having day traded the short term range in GBP:USD throughout much of last Week, this morning I entered a long, initially planned as a day trade but after further thought decided to give it some breathing space, albeit with one eye regularly checking up on it.The main trend is clearly down and has been for some Months but a time has come where practically every time frame is showing almost extreme levels of positive MACD divergence. This in itself is no guarantee of a reversal, but should lead to a correction of some kind, and even a weak correction is still adequate to take 100 pips or more.

After some Months without seeing a single swing trade opportunity I felt comfortable with, I've finally taken the plunge with a GBP:NZD swing long.Although its a choppy pair to say the least, the overall trend has been up for almost 18 Months now even though a glance at the chart doesn't immediately suggest that. Volatility aside, MACD and the moving averages do suggest a probable continuation of the ongoing move, which ideally will lead to a more sustained move higher.

Following a discussion on the ADVFN FX forum thread I thought I'd reproduce my post here so as to keep it for future reference. Please note that some of the statements herein are taken from a research paper written by William K.N. Chan, former Head of FX Strategy in HSBC Asset Management.I have a consistent swing trade win rate of around 75% and a day trade win rate of between 75% to 90% of all day trades taken over a typical Month yet the value of my account does not increase proportionally with that win rate because a fair percentage of my losing trades incur a loss greater than the gains made on an average winning trade.