Index Swing Trading & Technical Analysis - Latest Posts

With potential volatility likely across most markets over the U.S debt ceiling farce I've avoided taking any new swing trades and spent the Week day trading Indices. The DAX swing long survived the correction but its yet to be seen whether the current rally will run to new highs or, as I suspect, a lower high. Despite the trade being taken across analysis from the Monthly and Weekly time frames, I think if we see a lower high on the Daily chart it would be sensible to bank profits and close the trade. The trade went into the Weekend showing 270 points profit, but who knows what will happen when futures open tonight. So far based on currency futures its a bit of a mixed bag, but I think most indicators are pointing towards a bit of a gap down tonight.

Although my concentration lies with swing trading, there are times when a great trading set-up makes day trading worthwhile so here's a quick synopsis of a trade I took earlier today. On the Daily timeframe my system has remained short on the FTSE 100 since May 2013, although the Hourly time frame has switched between short and long on a few occasions. However, today's trade was based on the simplest form of T.A but keeping in mind that I find FTSE a quirky index that has its own characteristics. 

As the Week began I felt quite content in continuing to run both GBP:CAD and DAX swing long trades but the short term picture for both has changed, drastically so for GBP:CAD. Being committed elsewhere on Friday I didn't even log into my account so you can imagine the shock when I logged in after market close to see GBP:CAD that had been showing a +300 pip profit now showing a -160 pip loss! It's unbelievable how much damage can be done to a great trade in a single day, and I absolutely didn't see it coming.

Following my 3 Week break I feel I'm trading at quite a comfortable and relaxed pace continuing to hold the DAX and GBP:CAD swing long positions. DAX as with other indices seems to be going through a correction at present but its quite clear DAX remains one of the strongest Indices. As you know, my system shorted FTSE back in May on the basis a medium to long term top may be in place. Bearing this in mind it could turn out the DAX Monthly break-out candle is little more than a fake-out and I am concerned that the huge profits seen on that trade will turn to dust, but I'm quite determined to stick to the plan on this one unless I see a real break-down in the technicals.

Just a quick post to say following on from previous GBP:CAD analysis I've entered a swing long position with stop loss set on a Daily close below this Week's low. I don't normally buy break-outs like this generally preferring to buy a back test of the break-out level but I miss so many trades with that strategy that I've just bit the bullet and entered long. After all, price has just broken out to 3 Year highs and it would be incredibly unfortunate if I've bought the top!

It's been one Week since restarting trading and the very first trade I opened got off to a brilliant start. The DAX long was taken on Friday 13th of all dates but got off to a great start by rallying 300 points within 4 trading days. It was very tempting to just bank that profit and I do fear my own judgement in being able to hold that trade as originally intended. As a reminder the plan was/is to hold it based on the Monthly and Weekly charts as opposed to smaller time frames and I've never based a trade on such time scales before.

Having briefly made 3 Year lows back in March (which I actually bought and got stopped out at the lowest pip), GBP:CAD has now broken 3 Year highs. So the question needs to be asked; Are we about to see a huge rally or will resistance send the pair back into the long term trading range? Having been wrong around 50% of the time on this pair I'm probably not qualified to answer, however I put the question to members of my ADVFN forum where the majority believed price would sell off back into the long term range.

After a refreshing 3 Week break from the Markets I'm now back and scanning through the charts of which some have surprised me, the strength in the Pound in particular. Last Week I entered a DAX long for which I've only now got the opportunity to talk about. This trade is based on the Monthly chart and I've never before taken a trade on such a large time frame. Furthermore I had to stop myself being influenced by other Indices because none of them support the type of strength I'm seeing on the DAX even as far as to say my system is still short from May on the FTSE Daily chart.