Risk: 0.55%
Short: 7547.8
Stop: 7591.3 (44 pips)
Target: 7465.5 (4h100, 82 pips, 1.87 RR)
Mindset: Nice set up. Divergences on multiple timeframes

Updates

Stopped out, but still looks good – 2 June
Missed a second entry by 3 pips! 🙁 – 2 June
Sometime later – 9 June

I’ve been watching the FTSE for a while, I’ve had a number of opportunities to get short and haven’t done very well getting my entries. There’s such a big difference between seeing a trade (especially in retrospect) and actually making money out of it. (E.g. Spikes taking you out and you not being around to get back into the trade, waiting for a better entry that doesn’t get triggered, trading the wrong market, etc etc.)

The FTSE has been looking great on a number of timeframes for a short and I’ve missed the boat on one of these trades already. So I was pleased to get another set up come along. We had a divergence (double) forming on the weekly (not in yet), another double on the daily (currently active) and a 4H & hourly divergence! Set ups don’t really come better than that, right?

I’ve been losing quite a bit lately so I’m trading tighter now (only taking a divergence when confirmed on another timeframe) and looking for correlation on other markets.

FTSE Monthly Chart

A marginal divergence might form this month?

FTSE Weekly Chart

A double divergence may form here.

FTSE Daily Chart

The rise in prices have a diverging trend on the MACD

FTSE 4H Chart – the setup

Price rises haven’t been coupled with a strong MACD. The MACD is very flat so it’s hard to pick an entry from this chart.

I’ve taken the most recent spike high as a place to get long. The entry is on the 8ma. I think this trade is a good set up and could run if the weekly divergence comes in. If it does, this will need stop management. Not something I have been in the position to worry about. I can also see this getting stopped out so I will need to be ready to get back in.

Stopped out, but still looks good – 2 June

Prices have continued the trend higher. Not surprising really. If the move that stopped me out immediately reverses, I will try another entry immediately.

Missed a second entry by 3 pips! 🙁 – 2 June

Doh, I set a couple of price level alerts to see how price behaved following my stop out, both alerts were hit quickly so I felt a reversal could be happening soon; it did. I’ve been keeping an eye on the price all morning, waiting for my time to get short following a retracement. I was looking for an upper band test at 7580 but it only made it to 7577 (3 pips short).

I took this screenshot in preparation for the trade log but it never got there.

NFT was this afternoon and price has fallen away since. Pretty annoying to see, but we haven’t broken the higher timeframe trend yet so I am hopefully that I might get another entry to go short again.

The hourly chart might set up a divergence and the 4 hourly, daily and weekly would still be diverging. So that would make another nice entry.

Sometime later – 9 June

Thought I should start monitoring how markets play out following my trades (win or lose). Here’s the FTSE. Would’ve been a great trade had I got in, but I didn’t and that’s trading, sometimes you get lucky.

Maybe a shouldn’t be too precious on my entries?

Account Risk: 0.3% (looking to increase leverage to 1%)
Short: 1x 7355 & 2x 7362 (order)
Stop: 7408 (1x 53 pips & 2x 46 pips)
Tgt 1: 7225, D 50MA (130 pips 2.4 RR)
Tgt 2: 7113, W 21MA (242 pips 4.5 RR)
Tgt 3: 6773, W 50MA & M 21MA (582 pips 10.9 RR)
Mindset: A little uneasy – worried about missing out on the full position.

Update #1 – Second part of my position has triggered – 6 Mar
Update #2 – Stopped out – 16 Mar

This trade has been in the making for a while! The FTSE has broken to new highs and we’ve got a divergence showing on the 4H, Daily and almost the Weekly (Not sure about the monthly yet). There are so many juicy targets as well, I just can’t wait to see how this plays out. I’ve got the feeling this might be one of the better trades of the year for me (just got to play it right!)

The set up is on the daily chart (I’ve entered a little early on the 4H chart)

Daily chart set up

I’ve entered the first portion of my trade at 7355 manually from the 4 hour chart. The remainder will be entered at the upper band. I’d like to be trading more than 3 units but I’m already on the smallest position size with ETX I don’t want to risk more than 1% on this trade right now. Maybe if we had a double or triple divergence I’d feel different.

Weekly chart

Not quite confirmed but price has moved inside the bands, a decent close under 7340 would confirm the weekly divergence. Monthly chart would set up if we closed under 7255.

This one is a big time wait and see job. It could take weeks to work its way down to my target.

Update 1 – Second part of my position has triggered – 6 Mar

Date: 06 Mar 17
Account Risk: 0.6%
Short: 1x 7355 & 1x 7362
Stop: 7408 (1x 53 pips & 1x 46 pips)
Tgt 1: 7113, W 21MA (242 pips 4.5 RR)
Tgt 2: 6773, W 50MA & M 21MA (582 pips 10.9 RR)
Mindset: Ok for now – waiting for a decent break-down. Not sure about adding to my position now.

The second part of my trade has been triggered now, so my average entry is 7359. I originally wanted to go up to add 2 units to increase the trade size to 1% but if I’m being honest with myself I’m not ready for it. Just not used to it and I’d like to build up some trading mileage and a bigger margin before I up my position size.

So I’m happy to risk £50 per trade for now.

Here’s the set up I’m trading.

I’ve noticed people at work talking about buying shares, I don’t get the impression people are greedy though, just that getting into equities is on their radar – so I can imagine a scenario where price goes higher yet.

The opposite to that though, I can easily see price on the weekly & monthly charts closing inside the bands. If the monthly chart sets up, I may have to move my targets to the monthly 21. At the moment the weekly divergence is in play so my targets are set for the 21 and 50 weekly MA.

Update 2 – Stopped out – 16 Mar

Got stopped out of the trade. Two things surprised me about this:

1. When the fed raised rates, prices went higher. Higher interest rates are usually bad for equities – debt is more expensive and there’s less money for people to spend on stuff.
2. How long this trade took to decide anything. Just not been used to that much waiting around!

I have to be honest and say I was disappointed about this stop out. Bruce Lee sums it up pretty well for me.

I know I shouldn’t be, but I’ve had a few losers lately, trading costs are adding up and I was hoping this trade would cover those losses. I’m not used to this – probably the first time I’ve experienced it – although I’m covering many markets now and these losers are spread around, so it’s to be expected but it wasn’t what I was planning for March.

Here’s the final chart.

Looks like we still might get other set ups coming. Gotta keep plugging away. I’m sure I’ll look back on this one day and shake my head in disbelief at how easily up set I was.