Sorry for not posting an update at the weekend as promised. I’m going away on Wednesday and time was eaten up getting things ready for then. Still here’s my update with the very latest events.


So what has happened since last Wednesday? Well Thursday saw the FTSE 100 fall 250 points in a day yet again confirming the 5400 is level as resistance, then on Friday it fell below 5000 only to recover and confirming 5000 as support. I have no idea which way we are going from here, it seems the sideways market will be continuing for a while yet.


After the massive falls of Thursday there were plenty of opportunities for Friday. I made one new short trade in Drax at 491.22 which fell initially but rose in sympathy with the FTSE 100. Today it has done the same do far hitting 500. Usually these round numbers can act as support and resistance so I’m hoping for a resistance level to hold true here. On checking the chart it seems there is potential for a resistance level at 507 ish. If this is to hold true then this would be in keeping with my theory on how prices tend to act at these round numbers. If y theory stands up the price should rise slightly above 500, then fall back below and continue to fall from there. Knowing my luck this will probably be one of the cases where this doesn’t happen but I guess we’ll find out.


As I mentioned at the start I’m going away for 10 days on Wednesday. It’s time for my well earned annual holiday which I am so looking forward to. It’s been a good year but with work, trading and updating the website it has sometimes felt that I’m constantly working. I wont have access to a PC or internet where I am going so I will not be able to update any blog posts etc. I have to say I am looking forward to the break and hopefully the weather will be nice too.


With not having access to PC for so long I am thinking to close out all my positions before I go. I have definitely decided on that yet but I think it would probably be for the best. Since I have no way to update stops or close out trades manually I will possibly be leaving my exposed to the markets. That said most of my positions are shorts and I only have a few open so if the markets were to tank again it could work out well. I’m undecided on this at the moment and I don’t know what to do for the best. I guess I’ll have a think and see what I want to do tomorrow. With all my trades being a medium term view I think I may leave them open. I mean you wouldn’t sell all your shares you bought as an investment just because you were going away for a week would you. That said I’m not really investing per se. It’s more trading/investing or travesting(new word I just made up). Anyway I’ll have a think and see what I want to do.


I was reading an article on BBC news today about automated trading and how it’s mathematicians that rule the markets these days. It’s interesting that banks and trading firms all want to employ qualified mathematicians with hindsight I wish I’d done a pure maths degree rather than the networking and communications one that I ended up doing. I’d love to go back and pay more attention to the statistics lessons that I did as part of my Maths A-level. The problem is we can’t go back we can only move forward. I think brushing up on my statistics could be on the cards in the near future. It will certainly help me with my understanding of all the technical analysis information there is out there.


Speaking of technical analysis Offthelip has very kindly helped me out with some information on RSI – Relative Strength Index in return for which I’m sending him a copy of Malcolm Pryors Second Edition of the Financial Spread Betting Handbook which is courtesy of Global Investor Bookshop – for all your financial book needs. The plan is to add a new section to the site dedicated to technical analysis, explaining construction of indicators and oscillators and how they can be used in trading. It’s going to be a little while before I can get it all up and running but I’ll add what I can when I can. For now you can read all about the Relative Strength Index.


Ok so that’s probably going to be my last update until I get back of Holiday if to you want to e-mail me you can but I will probably not be able to respond until I get back. Happy trading everyone and I hope the markets are kind to you while I’m away.


Until next time,
“May the markets be with you!”
The Spread Betting Beginner

September 26, 2011 by Harry
Category: blog