The weekend is upon us!

A great week for the FTSE as it muscles up to the down-trend resistance line on the daily charts, what will the following week bring? Obama's victory, the rate cut and some good earnings news, can we push beyond the retrace and initiate a genuine upswing?

Let's look at the factors at work here. Despite the Fed and BOE continuing their rate cut bonanza and consistent approach in propping up the markets, the banks will still not lend to each other or you and me. They are sitting on huge reserves that they will not risk for fear of further failures and the world economy is currently hamstrung as a result.

It will be interesting to see where the markets go from here, until the banks start to loosen their purse strings I can't see much blue sky...

However, the skies over the UK are clear and the late autumn leaves are burnished and sparkling, who needs New England in the Fall? Have a walk through the Chiltern woodlands and you can drink in the beauty of the beech and oak, carpeting the lanes with gold.

I bet Gordon wishes he could scoop some of that up and replace our reserves. If I ever meet him I will ask him how the architect of the Labour Government economic miracle sold the Nation's gold at the bottom of the market. That's if I'm not wrestled to the ground for punching the smug bastard in the face first.

Anyway, at the end of my back-testing of the Neutral Zone strategy and we are looking good to go. Next week sees me jumping back into the markets so wish me discipline, focus and NO GAMBLING!

Happy Trading!

Dirk Advocado

Aha! there you are where have you been?

So we are now in the throes of the US presidential election and the markets are behaving accordingly so I have squirrelled myself a way to complete my back testing on the neutral zone trade as applied to the FTSe 100.

I have used the 0800 open and 0830 low/high as my range highs and then waited for the 08:50-9:10 swing which often then initiates the key morning move. I chose the 08:50 swing time as it seems to suit the FTSE and has proven the lowest risk/highest reward option. It may often outside the chosen range, but within 20 points or so. So, for instance, if the bottom of the range is 4100 and the top is 4170 and the swing begins at 4089 I will wait for the cross back into the range and trade to the top taking profit at resistance or sticking with it if there is still energy in the move.

Thus far the risk reward ratio is consistently in the 3:1 areas with typical moves being between 50-100 points so now to put the plan into action. WATCH THIS SPACE and good luck all those Americans rooting for their men/pitbulls. Be careful what you vote for.

Happy Trading 

Love Dirk

29th October PaperTrading Heaven!

Hello world,

After an emotional time I am now into writing my third entry. The last 10 days has been somewhat traumatic. I was handed my marching orders at work just over a week ago which was a shock, as I was certainly not expecting it. Yesterday I heard that my appeal has been turned down, which was a blow so now it's time to pick up the pieces and look forward.

It's a real shame as I was actually enjoying my work and I felt we were about to embark on an exciting time despite the current economic down-turn. My boss obviously thought otherwise. Note to self: Ensure your boss thinks the same way as you i.e. not that you are worthy of nothing but the heave-ho.

Ah me, I pine for the days when life was all sunshine and bike rides around the triangle. (that's not a euphemism by the way) Anyway, the good news is that I had time sit in on the latest OTA Trading Academy course which I took originally this time last year. It's called Professional Trader and I highly recommend it for the following three reasons.

1) All the theory they teach you (which is extensive) can be practiced in the classroom on their account, with direct access to the market. Very exciting if you're doing it for the first time and it allows you to make all the rookie mistakes in a safe environment without it hitting your own pocket.

2) You are taught by an experienced trader using live data, mostly USA based stocks and indices and the classes are small enough to ensure all your questions are answered effectively.

3) They actually care that you are successful. They take time to discuss your plans and strategy. They allow you access to their trading account to practice on at regular grad days, they allow you to re-take their courses free of charge, they even give you lunch! They are a great bunch and I heartily recommend them if you are looking to learn effectively and make a success of your trading.

Anyway onto today's trade!

I am currently paper trading after a solid month of taking pretty good quality trades and then suddenly reverting to taking a gamble and blowing my account in one day! It has happened three times now since I have been actively trading and this is the last time. The beauty and the horror of trading is that you are essentially trading against yourself. You find out alot about yourself staring into the screens, pitting your well worked plans against your ability to execute. All too often Mr. Ego overcomes Mr. Objective and the inevitable blow-up ensues. But not this time Jack I am in this for the long-term and I will keep Mr. Gambler Ego in his box.

On the OTA course I learned about a set-up called the neutral zone trade, principally used on stocks. The quick and dirty is that you take the trading range of your chosen stock for the first 30 mins of the day and use those as your trading parameters. If it breaks above the limit you buy, if it breaks below, you short. The theory is that this this move sets the tone for the day and you are in a solid trade from the start.

I have refined this for my FTSE index trading and back-tested it and it's very effective. Today's trade is highlighted in the chart at the bottom of the page. The two horizontal lines show the neutral zone area, as you can see the FTSE breaks the upper limit and moves to resistance looking to test the 4360 previous high. I take my profit at 4350 for a decent trade, hoorah!

If it moves back down, then you can re-enter the trade, but beware the old whipsaw, use your indicators to guide you, but I will be using this and refining it over the next few days to begin live trading again. Well that's it for now, enjoy the snow and the joy of pitting your wits against yourself. Happy Trading!

This blog is written for my own benefit and in the hope that my stumbling observations may add something to your world. It is not and should not be used as trading advice or tips and Dirk Advocado takes no responsibility for anything you do as a result of reading his ramblings.

8th October Volatility, thy name is FTSE

An interesting session! It's hard to put into context what's going on so I won't try. I am trading what's in front of me, which is not pretty but really quite exciting.

The plan I have been working on for the last 18 months is that there is sufficient in the first hour of trading the FTSE 100 to meet my needs. The average move across this timeframe is 50 points which I aim to trade actively to the point where I take a minimum of 20 points off the market every session I trade.

I use a combination of Stochastics, momentum and timing to enter, focussing on 5 minute and 1 minute charts. After a daily pre-trading research session, scanning the news, reports and sentiment I then plot support and resistance levels from multiple timeframes, starting with monthly, weekly, daily then down to hourly and lastly 5 mins. I am looking for repetition and therefore strength, plotting the key levels on my 5 mins chart which I use to plan my trades for the session.

There are key times in the hour between 8 and 9am that the FTSE changes direction, which I use as a guide, with price action, stochastics and momentum being my three elements that dictate where I enter and exit.

Today, due to the speed of movement I missed out on the top and bottom ranges, but took 40 points and retired. As this blog progresses I will go into more details as to how I plan my trades but for now it's time to do my homewrk and see what tomorrow brings.

How it works

I am currently day trading the FTSE 100 index using a Spread Betting Site. I only trade the first hour of the day as I have proper job that demands my attention post 9am chizz chizz.

After many false starts I am now starting to understand why I am successful and why I fail when trading.

I will share my experiences on this blog, to help myself mainly and to see if there are others out there who may benefit from sharing with me.

I am not a professional trader nor is any of the content on this blog designed to be advice or trading tips. I am not here to make money out of you, I will leave that to the sharks that circle you. If we keep making a noise and stick together we may get through this.

I will not always have time to publish daily but I will do my best to kep you informed. Bon Chance mes amis.

Bonjour tout le monde!

Welcome to my blog! My name is Dirk Advocado and I am a useless trader.

This site is dedicated to all those who strive to be free of wage slavery and have a plan but haven't quite made it yet.

Are you sick of all those "successful" people who have 200 years trading experience and have written books and and have bushy beards but no hair on their heads trying to sell you a quick route to riches through their strategy/methodology/foolproof plan?

Or what about the smooth talking shiny faced slick ones who won't try and sell you anything but will show you the tools and still end up taking thousands of pounds from your wallet?

Well no more! Yes I am one of the suckers who was sold a dream! Yes I have been through all those free seminars that sign you up and spit you out! Here I am baring my heart and head to you in the hope that we may together throw off the shackles of financial restraint, embrace the joy of living and maybe, just maybe find out what the hell is going on out there.

I offer you no solutions, no quick plans, no magic formulas, only my experience as a part-time day trader looking to the stars! Welcome to my world.