Lloyds Bank Daily Chart

Hi Everybody,

I am often asked about the best way to trade shares, do you just trade them “in isolation”. I would say no, the best way is to always have an eye on the main Indices. So this Wave C low that unfolded on Lloyds (UK Bank) on March 9 was a perfect candidate to consider as it fell perfectly in line with the potential low on the FTSEE100 on Mar 9 (post below) as well.

As you can see, Lloyds has rallied nicely to reach the DP zone where a profit of approx +8R (ignoring slippage and commission) was available.

But the point is how the setup on the individual share also “fell in line with” the position on the Index.

Thanks, Steve

Daily FTSE100

Hi Everybody.

A few user have asked about the position of the FTSE100 (UK Stock market) on a Daily Chart.

So please take a look at the chart to the left, where we can see how the DP nailed the low perfectly on Mar 6. And since then the FTSE has rallied very nicely. It is always nice to nail the very day a major turn unfolds

But what now, well although we are at the “initial target” form the low (DP from the last minor high) because the weekly chart has put in a Wave 5 low (not shown) I suspect that this will only be a minor high. But we will have to wait and see how the next few weeks unfolds.

So for now the position is that we have made a very important low on Mar 6.

Thanks, Steve

Some days are hard

Hi Everybody.

You have heard me talk about the Cyclical nature of Trading a few times, well yesterday was a brilliant example of how we are now in the harder part of the cycle, which has come after a few good days on the US e-minis. As such a hard day yesterday should have come as no surprise.

There are too many amateur traders who expect everything to work out perfectly each and every day, this is not how the real world works. Trading is about probabilities and sometimes you can do all the analysis you like that points to a high (like on the 15min Russell yesterday, which was at DP resistance early in the day) for it to decide otherwise and the rally continue. Does this mean you have done something wrong, not at all, it just means that we are in the hard part of the cycle.

Trading is not about “predicting the future” it is about making money, and sometimes there will be losses or hard days. It is your job to either not trade when the picture is unclear or take the losses but keep them small (-1R) so you are ready for the good days when the big profits unfold.

Again, this is just the natural way trading unfolds. So to become a professional trader we all must understand this and accept it. There are too many Gurus who do not have a clue about real trading, who simply do not understand this, so many newer traders get fed misinformation by some Gurus. So when they come to us, and we tell it like it is in the real world, it comes as a bit of a shock. So that is what this daily Blog is all about, to tell it like it is, the Good, Bad and the Ugly, to help you prepare for how to tackle trading in the real world...

Thanks, Steve