FTSE Spread Betting

Yesterday was a nightmare for spread betting the FTSE as it kept trending sideways, so I tried a mini turtle experiment on the euro; scaling down to the last 20 bars on a 3 minute chart (i.e. hourly) and taking a trade on the break of the high or the low of the previous 20 bars.  This worked fine and I was quick to move my stops which gave me some scalping fun whilst the FTSE stood still.

A Simple FTSE Day Trading System

I believe candles may be the answer. If previous day was an up day then trade the break of the high with previous day’s low as your stop. Let it run each up day, pulling your stop up to the previous day’s low. Eventually you get stopped by a candle with a lower low. You then trade the break of the low with your stop at the previous day’s high…etc. Inside days are ignored. You must wait for end-of-day but need to set stop/limit orders.

Given that there are usually half a dozen or more days in the same direction it’s very hard to lose. Signals can be taken from end of day charts or futures charts. I’ll do a chart to explain.

I think what we are seeing presently is an adjustment to a sustainable bull trend. The recent rise was far too rapid to be sustainable. Pulling back into the blue trend channels gives a similar trend angle (growth rate) as we had in nineties and mid 2000′s bull trends. So I’m comfortable with any pullback above 5100 but don’t think it will get anywhere near that level again.

Turtle Trading Timing System

I’m also been reading about the turtle trading system lately.  I know the turtles strike rate wasn’t fantastic but it was all about running the trend for as long as possible, looking at recent possibilities taking the euro as an example, they would have probably made a good 1000pts or more each way, making up for the failed trades along the way, mind you a 360pt stop on end-of-day euro would hurt and also if you got into a 250pt drawdown situation it would take some nuts not to kill it!

Summary and Trading System

Usually I only spread trade 1-5min and only about 40% win: lose but when you get a good’n like wheat it more than makes up for the losses. It’s said that day trading via financial spread betting requires a discipline that most of us don’t have.  Beware that end of day FTSE trading is as difficult as it gets. The institutions do all in their power to stop us making easy money.

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