Written 13 April 2018 – 00:16
FTSE for Friday and a bitcoin snarl (FTSE:UKX)
Just for curiosity, we opened a demo trading account to try something with bitcoin, essentially displaying similar fascination as a moth and a flame. The market is, in our opinion, utterly crooked! Firstly, there was the small matter of an immediate 50 quid loss…
This was easily explained, due to the product having a wide spread. So, a sell order was immediately underwater, needing to move by 50 points before the trade was at break even.
This was not really a problem as the entry was in expectation of reversal down to 7,375 eventually.
We’d placed a silly wide stop loss, quite forgetting to take cognisance of the silly wide spread. A fairly large oops moment ensued as the product experienced similar spikes upward to those faced with Forex – another market we distrust immensely.
No worries, we entered the trade again as we’re playing with imaginary money. This time, we had factored in the spread and calculated 7,940 would be safe.
For a few seconds at 10pm, the market took bitcoin 9 points above our calculation, falling back immediately and kept falling. This is why we hate Forex as it almost seems “they” use similar formula to ourselves, then add a couple of points for good measure.
Suffice to say bitcoin remains called bitcon, at least around us.
As for the FTSE (UKX) and Friday, we are seeing early warning signs the UK market intends to strengthen. Since the index finally made it above our 7,217 point trigger earlier this week, it has launched upward in fits and starts.
The immediate situation is of movement new term above 7,269 points now suggesting growth toward an initial 7,298 points with secondary, if bettered, at 7,356 points. If triggered, stop can be dumped down around 7,207 points.
What happens if 7,207 breaks?
Hopefully very little as there are some suggestions the FTSE is entering a cycle above 7,500 points currently. It results in the situation where we tend expect drop targets to fail.
If we choose to take a threat of weakness seriously, below 7,207 is supposed to bring 7,191 points initially. An utterly useless trade, made only slightly attractive by the stop loss at 7,240. But if 7,191 breaks, there’s a chance weakness shall become serious, allowing the FTSE to drip down toward 7,159 points.
Have a good weekend. We shall continue to have bitcon nightmares!
Source: interactive investor Past performance is not a guide to future performance
Alistair Strang has led high-profile and “top secret” software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know “how it worked” with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
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