FuturesTechs Blog

Apologies for not posting any Blogs of late. The current market conditions have made for a busy time at FuturesTechs towers!

I’ve said a few things on today’s reports that don’t usually appear in our comments. Things like this from the Bund report:

Short Selling, eh? This is a highly contentious issue, of course, but mostly because there is a lack of real understanding about the mechanics of the market, particularly by politicians and churchmen.

Data Explorers is a fine company that I came across a few years back thanks to an introduction from a good friend of mine in the Stock Loan industry. In simple terms they track percentage of stock that is “on loan”, which gives an indication of the amount of shorting happening in any particular stock. They do a lovely job of collating all the data from the various firms who are involved in this industry, then redistributing it to give everyone a “bigger picture” view (this info doesn’t come cheap, mind!).

Their figures show that there wasn’t any extraordinary shorting going on in many financial stocks in recent weeks, and therefore the banning of short selling is probably a complete waste of time, and is a knee jerk reaction to uninformed people’s ranting on about city fat cats.

Now let’s look at the share prices of our high street banks. Let’s pluck RBS out of the air as an example. The ban on short selling, designed to stop large downward movement in the share price, was announced last Friday morning, and RBS traded up to a high of 263. Where is it now, without the evil fat cats able to short it? 164 is the answer. So has it helped? You be the judge.

Also now bear (no pun intended) this in mind: Today the market has recovered some of yesterday’s drubbing after a bad start. FTSE Futures are up 233 points from last night’s late close as I write this at 12.30 on September 30th. This sort of recovery sometimes has shorts running for cover, and their buying can exacerbate the up-move, except the shorts have been banned from their trading activities, so they haven’t got anything to cover, and it could be argued that this has created a false market that’s actually stopping or at least stalling the recovery, by taking out an entire potential stream of buyers “on the bounce”…

What a mess we’ve got oursleves into…

And now for something I said in my Dow report today, and I quote:

Whether you’re trading direct market futures, or CFDs or Spread Betting, the lessons you need to learn to become a successful trader are the same, and they’ve been learnt, usually the hard way, by the best traders in the world. The reason they make money trading isn’t anything to do with the type of product they trade, it’s to do with the lessons they’ve learnt, and their day to day disciplined application of those lessons.

Why have I started today’s blog posting along this line? Because it’s the beginning of September, and we’ve just come out of a tough month. August can often be a tough month for traders, as I suggest in the “PS” from my last blog posting. The other reason I’m talking about this is because we’ve lost a few of our newer “individual” customers this month (which is unusual), and the main theme seems to be that they have lost money in August.

Why is August such a tough month? Because half the market participants go on holiday, and the lack of volume can wreak havoc. There are two very different conditions that can ensue:

The market can suddenly become extremely volatile, with moves making little sense. Moves also tend not to last too long, which can be a real problem for analysts like us and traders like you, who rely on sustainable trends unfolding.

Or the market can just go very very quiet and crab sideways with very little interest shown either way. Again this is problematical for many traders, as there are no big moves to get on.

We find it frustrating to talk about these sort of markets as we feel people don’t want to hear “the market not really going anywhere”. But if that’s what’s happening, then that’s what’s happening! This introduces a use for the FuturesTechs service that I’m not sure our newer customers are fully utilising. We will do our best to get you on the right trends at the right time and keep you in a solid move by sticking with the trend, but if things become messy and confused then we will tell you, and if you’re looking for a solid trend it’s time to step away from the screen. Either look at a different market, or catch up with that pile of paperwork that you’ve been meaning to deal with.

The best traders in the world abide by one word more than anything; and I’ve already mentioned it once today: DISCIPLINE. One very important discipline is to make sure you don’t over-trade, you don’t trade because you’re bored, you don’t trade because you need to make X amount by the end of the month. If there’s no clear trend then you are only going to give your money to the market, and there’s plenty of willing takers of your hard earned lolly.

So always be aware of market conditions, and on this note be aware that we are now entering a very interesting period of the year. The run it to Christmas is usually a time when there are strong moves in the market. Between now and November I’m sure we’ll identify plenty of big moves that can be jumped upon and provide profitable trading opportunities.

We may already have the first of these, with Oil selling off through key support (around $110 in Brent Crude) first thing this morning, and Gold Futures failing at key resistance (850) towards the end of last week.

We’ve been in these markets for years, and been analysing them for professional traders since 2000. We’re giving you the chance to share this wisdom on a daily basis, for just 50 quid a month. Can you afford to pass up this opportunity? Do you want to make money trading, or become another one of the 80% who fail?

You decide.

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Cheers,

Clive.