Sat November 22, 2008

We have all experienced something unusual in the last few months, increased volatility in the stock market. Prices are moving fast and it is not uncommon to see the FTSE move up or down by a few percentage points in a matter of minutes.

These wild swings are making life difficult for investment managers, but for the intra-day trader they represent profit opportunities.

For example here is one intra-day trade in Marks & Spencer I did for my clients:

This is a minute by minute chart of Marks & Spencer on 20^th November. The market opens at 8am. Note the strength of Marks & Spencer at the open which is a positive sign. On that day the FTSE 100 opened sharply lower but Marks & Spencer was resisting the decline as shown by the rising relative strength line at the bottom of the chart between 8h and 8h30. I bought Marks & Spencer at 8h30 and sold it at 9h30 when it was 4% higher.

This is an example of a profitable trade that anybody can do in a fast moving market. The conditions for an intra-day rally in Marks & Spencer were in place:

-         The stock is positively correlated with the FTSE 100

-         A rising relative strength in a declining market

-         An oversold differential between Marks & Spencer and the FTSE 100

-         An end of correction as defined by the Elliott wave pattern in Marks & Spencer

-         An expected rally in the FTSE 100 on 20 November

As a result it was a low risk, high reward trade and it was executed successfully. 

If you would like to learn to trade in a fast moving market come along to my seminar in January in London. I will show you the techniques I use to trade stocks intra-day.

I will be running two seminars:

Interpreting the FTSE Short Term Forecast Report

Date: Wednesday 10 December		Click here to register
Time: 14h00-17h00
Location: Central London
Cost: Free

Learn to Trade in a Fast Moving Market

Date: TBA		Click here to register
Time: 11h00-18h00
Location: Central London
Cost: £220

Alternatively if you don’t have the time to follow the market during the day but would like to profit from intra-day trading, open a managed portfolio with Twowaymarkets and I will execute the trades on your account. To open a managed portfolio click on the link:

http://www.eyield.co.uk/form/managedportfolio.htm

Mon October 20, 2008

Not many investors would have made money in the current turmoil. The truth is most investors lost money. Why? Because most investors do not have the confidence to sell high and buy low. The FTSE short term forecast gives investors the confidence to sell high and buy low.

"Excellent forecasting" says one of our subscribers, and he is not the only one. Our clients rely on our proprietary timing indicators to trade the FTSE 100 and UK stocks. So far in October our FTSE short term forecast has been spot on:

2 October Sell at 5030

3 October Sell at 4900

6 October Sell at 4800

8 October Buy at 4420

14 October Sell at 4410

16 October Buy at 3950
 

To subscribe to the FTSE short term forecast click here

Sat October 4, 2008

In the last three months our scoring system has produced a 78% success rate.

e-yield scoring system is a sophisticated analytical tool which identifies shares that are ready to start a move up or down, see scoring system. It gives star ratings on UK stocks, for example four stars up has a high probability to move up and four stars down has a high probability to move down. Take a look at the table:

http://www.eyield.co.uk/myarea/performance/ss_last3months.htm

All the stocks in the table were rated four stars up or down. We monitored the performance within four weeks following the date the signal was given. During the three-month period we recorded 43 profits and 12 losses which is equivalent to a 78% success rate. You will agree this performance is exceptional in the midst of a general market turmoil.

This is not an isolated good run. Our clients have used the scoring system since March 2006 when it was launched and the results have been impressive too. £20,000 invested in March 2006 would now be worth £81,000*.

To subscribe to the scoring system click on the following link:

http://www.eyield.co.uk/paymentssmp.htm

Save money with a managed scoring system

If you do not have the time to follow the system, we in association with Twowaymarkets Ltd, can now offer you a managed portfolio. There is no monthly subscription, instead you open a trading account with Twowaymarkets and Twowaymarkets will execute the trades generated by the scoring system on your account. You can relax and watch your money grow. To open a managed portfolio click on the link:

http://www.eyield.co.uk/form/managedportfolio.htm

*Past performance is not a guide to future performance. The above figures are based on the following:

All stocks recommended by the scoring system were included in the portfolio, 20% of the value of the portfolio was invested in each stock, trading costs of 0.2% per trade have been deducted.

Tue September 16, 2008

On Thursday 11 September the 34-day BTI, a sentiment indicator, turned negative indicating a continuation of the bear market. This unique indicator was in line with the Elliott wave count calling for a significant decline in the FTSE 100. I was waiting for a final push higher before turning bearish as the Elliott wave pattern did not appear to be complete.

On Friday 12 September I wrote: "The main trend is down and we will treat any rally as a counter trend"..."prices should turn down near 5420, the next move will be a third of third, wave iii of (iii), which is one of the most powerful moves in the sequence". I sent the report to e-yield's clients earlier in the morning.



On that day the FTSE 100 closed at 5416. The next session the FTSE 100 opened sharply lower, the decline was underway. As I write the FTSE 100 is trading near 5000 or nearly 8% below my call.

Anyone who follows my research would have made a considerable amount of money shorting the FTSE 100. You can receive my research for as little as £29 per month. Simply subscribe to the FTSE short term forecast, an innovative strategy based on Elliott wave analysis and my own forecasting indicators.

To subscribe click here

Fri September 5, 2008

If you trade UK stocks or if you are thinking to start trading, try e-yield’s scoring system, a tool that will improve your trading results. In the world of trading, profitable traders are those who consistently produce more winning trades than losing trades. This is where the scoring system can help you.

In the last two and a half years our scoring system has recorded two winning trades per losing trade. The results are as follows:

372 winning trades (66%), average gain 4.3%

191 losing trades (34%), average loss -3.9%

To see all the trades, click here

The scoring system is not a tipping service. The system is a report published daily on e-yield website which provides high probability trading ideas on UK stocks. When a stock is rated four stars (* * * *) there is a high probability that the stock will start a move up or down. For example on 13th August the system gave Kingfisher (KGF) * * * * down. The signal was good and Kingfisher started to move down. A few days later the system gave * down, which meant the downtrend was nearing an end, an indication to close the short and take profits.

To see what the ratings mean click here

It is as simple as that. Each morning you receive ratings on 40 UK shares and the FTSE 100 index that the system follows. The more stars the better. Read more…

I really believe that the system will give you the edge, you should try it. To subscribe click here

Sat June 28, 2008

On 19th June I issued a buy on the FTSE 100. Well we all know what happened next. This is the reality of trading. The odds may be in favour of a rally but there is always a small chance that the index will go in the opposite direction. Fortunately I always use stop losses so at least I can close the position early and re-assess the next move.

This is the way it should be done. Hanging on to a losing position in the hope that prices will turn is not wise and will result in larger losses. In general a trade should be profitable from the start. If it’s not, it should be closed.

Anyway, today I would like to tell you about a relaxed and profitable way to trade.

It’s called intra-day trading. Buying and selling during the day, closing the positions at the end of the day, researching new trades and opening new positions the next day.

This is what I do for a living. I already advise investors on the short term direction of the FTSE 100 but most of my time is spent researching intra-day trades and executing the trades for my clients. The majority of individuals do not have the time to follow the market minute by minute, this is where I can help you.

Why can you relax?

The positions are closed at the end of the day so you can sleep without worrying about what will happen the next day.

Why is it profitable?

I have developed a strategy which is specific to intra-day trading and so far it is profitable. I trade US, UK indexes and UK stocks intra-day. For example take the S&P 500 index. In association with Twowaymarkets Ltd, we launched the S&P 500 intra-day advisory service on 27 May and the results have been impressive:

Number of winning trades: 18

Number of losing trades: 8

Total gains: 78.4 points 

To give you an idea, a £10,000 account a month ago would now be worth £11,960*.

For the index I will not risk more than 2.5% of the account on a single trade. For example, assuming a £10,000 account, a typical position on the S&P 500 would be 25 contracts. With a 10 point stop loss the maximum loss is £250 or 2.5%.

For UK stocks I normally start trading after 8.30. The strategy is to buy the low of the day (in a rising market) or to sell the high of the day (in a falling market). Here is an example of a trade I did for my clients on 25^th June:

As you can see we are looking at a return of between 1% and 2% in a matter of hours. If the profit does not materialise as the day progresses, I will close the position and start from fresh the following day. Remember that these trades are leveraged so a 2% gain on this trade resulted in a 1% increase in the value of the account.

If you don’t have the time or the knowledge to trade intra-day please complete the form below and I will contact you. I truly believe that this is an effective way to create wealth and I would be delighted to help you.

Click on the following link:

http://www.eyield.co.uk/form/managedportfolio.htm

*Past performance is not a guide to future performance 

Fri June 13, 2008

Author: Thierry Laduguie

My approach to investment management is a three-step process:

 1. FTSE short term forecast

 2. Stock selection

 3. Hedging

Before any investment decision is made, I define the FTSE short term forecast. Afterward, all stocks picked for the portfolio will be selected according to the FTSE short term forecast.

 1. FTSE short term forecast

The FTSE short term forecast is an essential part of the investment process and tells me the likely direction of the FTSE over the next few days. The analysis is based on three analytical tools: Elliott Wave Principle, Bullish Trend Indicator (BTI) and Top 20 Differential, see FTSE short term forecast.

The Wave Principle is a detailed description of how groups of people behave. It reveals that mass psychology swings from pessimism to optimism and back in a natural sequence, creating specific and measurable patterns.

One of the easiest places to see this phenomenon at work is in the financial markets, where changing investor psychology is recorded in the form of price movements. If you can identify repeating patterns in prices, and figure out where in those repeating patterns we are today, then you can predict where we are going in the future.

The Elliott Wave Principle is named for its discoverer, Ralph Nelson Elliott. Mr. Elliott completed the bulk of his work on the Principle in the 1930s and 1940s.

 2) Stock selection

Once the FTSE short term forecast is defined, I will select stocks that fit with the forecast in terms of correlation and Elliott wave pattern. For example if the FTSE forecast is bullish I will select stocks with a high beta and with a bullish Elliott wave pattern.

The selection process starts by an analysis of the US markets i.e. the S&P 500 or the Dow Jones. The next step is to analyse the UK market (FTSE 100). Both the stock and FTSE must point in the same direction. If the FTSE forecast is up, I will look to buy stocks, but if the FTSE forecast is down, I will look to sell stocks.

If the forecast is up, I will select a list of oversold or near oversold stocks. These are about to move higher so they are the best buy.

If the forecast is down, I will select a list of overbought or near overbought stocks. These are about to move lower so they are the best sell.   

Exception: low acceleration move

A low acceleration move in the FTSE is one in which prices will not advance/decline rapidly. This low acceleration tends to occur at the end of a correction and is mostly seen in counter trends (wave 2 and 4 of an impulse wave, wave C of a corrective wave). In a low acceleration period, individual stocks tend to NOT follow the FTSE.

You can buy oversold or near oversold stocks in a low acceleration decline.

You can sell overbought or near overbought stocks in a low acceleration advance.

Always look for stocks giving the same signal as the general market. If a stock has just made a bullish signal, such as the breaking of a resistance or the breaking of the neckline of an inverse head and shoulders, but the FTSE 100 is going down, the stock should be avoided. In the majority of cases a bullish breakout in a falling market will not be profitable.

 3. Hedging

In addition to selecting the right stocks, my portfolio always includes a short position in the FTSE 100. In that way I can be leveraged and control risk effectively. For example I could be 200% long of stocks and 100% short of the FTSE, this would result in a gross exposure of 300% but a net exposure of 100%. I constantly adjust the net exposure according to the FTSE short term forecast. In bull markets my net exposure can go up to 100% and in bear markets it can be neutral (0%) or negative.

To request more information about the managed portfolio click here

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Thu June 5, 2008

A strong buy signal was given last night when both 13-day BTI and Top 20 Differential became oversold. When these two indicators are oversold the chances of a rally in the FTSE are high.

Many sectors are oversold, like banks, oil and mining, see:

The stocks with an oversold differential should bounce back.

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Mon May 26, 2008

The BTI or Bullish Trend Indicator is a sentiment indicator used to assess the immediate trend in the FTSE 100. The market is like a magnet, the more it rises the more bullish investors become. After a long advance, sentiment becomes extremely bullish with very few investors willing to sell. It is during these periods when the bullish mood has reached an extreme that most reversals will occur. The 13-day BTI measures when an extreme in bullish mood/bearish mood is reached. Any reading near or below -400 is extremely bearish, an indication that the FTSE is near a bottom. Any reading above +400 is extremely bullish indicating a potential top.

However the most precise signals occur when we combine the Top 20 Differential with the 13-day BTI as shown on the chart below.

The Top 20 Differential detects short term overbought/oversold levels in the market. Potential supports in the FTSE 100 coincide with a Top 20 Differential near -3%. These signals, based solely on the Top 20 Differential, work pretty well in the very short term, however, I prefer to have a secondary indicator giving a similar signal such as the 13-day BTI. In the last twelve months we had six buy signals when both Top 20 Differential and 13-day BTI were oversold, four of them occurring on the reversal day. A buy signal occurs when the Top 20 Differential is below -2.5% AND the 13-day BTI is below -400.

During the same period we saw some sharp rallies and two sell signals on 6 December and 7 April. A sell signal is given when the Top 20 Differential is above 2.5% and the 13-day BTI is above 400. The sell signal on 6 December was right at the top of the decline that we saw in early January while the one on 7 April marked a temporary top. A near sell signal occurred on 12 October when the Top 20 Differential rose to 3.2% but the 13-day BTI failed to move above 400. The indicator reached 329 but this proved to be sufficient as the FTSE 100 turned down.

Further reading: FTSE Short Term Forecast

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