JSE looking for direction

[_nova]

Only one thing matters today and probably for the rest of the week... the S&P500. At 840 it has now built a support base. If the S&P again goes below last week Thursday's low at 818 then it's all over and it will take every bourse on the planet down with it and a whole new bottoming process is on the cards. The S&P consolidation range is 840 to 1000. A breakout must happen either way and when it does it's going to be vicious. I'm not taking any further positions (other than currency swing trades) until that happens as the volatility in this consolidation is just plain awesome!

[Wizard]

nova would u ever look at the RSI indicators as part of your trading strategies??

[_nova]

Hi Wiz. Absolutely! RSI14 and Bollingers are two of my primary indicators. RSI, Bollies and swings go together. For example, that's why I'm worried about the S&P and DOW since 14 period RSI on both daily graphs have lifted to neutral in a consolidation phase and could go either way. I think that's why there's so much nervousness because it's very difficult right now to get any firm TA due to the volatility that's messed up many indicators. I also use old stalwarts like MOM, Stochastics, MACD and DMI. Any 3 together with a swing pivot above or below the Bollie is confirmation for me. I steer clear of fancy name indicators with lots of little lines and flashing lights

[_nova]

Wizard, here's an example. High probability swing short coming up on the 5min TOP40. Swing pips already well above today's average. Above the Bollies, RSI14 is 81 and Stoch 97 while MOM and MACD is flat. I'd go short on the first lower high lower low.

[_nova]

Yep, no brainer, short at 17030 with a tight stop in case the DOW pulls a surprise. Target is 16700

[_nova]

btw, I'm using the live TOP40 in this example (not futures) so other guys can also unnerstand this swing play

[#7]

That was good nova.

[_nova]

thx Vitalstats but it's a bit of luck too. Now if I can just call it like this everytime I can mebbe retire one day. The thing with swings is that even really good swing traders generally have a 30% to 40% success rate. The secret of course being risk/reward management and an eagle eye on any sudden changes in the indicators for quick exits to protect profits

[_nova]

Wizard? This is a classic swing play. See, now the RSI is neutral and the Stoch is oversold but I've got further confirmation of the trade in the lagging indicators with a MACD and DMI crossover and MOM going quickly negative and these can keep RSI and Stochs down for a while. I would probably look to lighten 50% at 16800 and leave the balance for 16700 while I add a trailing stop from 16900 to protect the first 100 pip profit. Simple innit? Now if I can just pull this off every time.

[Wizard]

good! ;)

[Theater_Cat]

Simon, where does one see the live Alsi futures price? Thanks.

[_nova]

Eish, and here is also a classic example of what a swing can do. Swings are not like normal entry/exit trades. You generally do not want to stay in a swing overnight so you swing trade from 09h30'ish and you exit at 17h20 latest (on futures)the trade didn't touch 800 so I'm still committed to 4 contracts (on paper of course). Also, there's almost zero chance that I would have stopped out on the close as it just moved too quick (often happens in FX). So we assume I'm still in the trade on 4 contracts with a 70 pip margin and a reset stoploss. This could cut me nuts off or make me a bundle tomorrow. DOW and S&P are iffy and this is a consolidation phase. Cowboys don't cry.

[_nova]

EURUSD indecisive... I hate consolidation, nuthin to work on for direction. At a rough guess from brutal experience the USD is going to get long legs for a while and eat up all the USD shorts, but then it's over for the greenback. Could take a while though. My focus is still short and still with the primary trend... short

[#14]

Ja Nova ! good call ... man 16 trades tonight and out with a mighty R 980.00 hehehe

[_nova]

Wow I don't think I could have given any better example of the good, bad and ugly of a swing play. This one could have eaten me alive because I misjudged it's depth and it locked me in overnight ( a reality of a late swing) but the S&P did what I expected it to do. Target is now 16700 on all 4 contracts with stops moved to 16900. Medium probability long swing at 16700 and below but that depends entirely on whether we see a gap down. I think this example proves clearly that swings are not a system but a strategy based on several indicators, access to instant news, and above all things the experience to recognise forming patterns. Swings are highly profitable but will destroy you if you don't apply super disciplined risk/reward rules

[_nova]

Ja Hennie, the USD behaviour has me worried. FX markets are jittery, illiquid and VERY indecisive the last 48 hours. Almost like there's something brewing but nobody can pinpoint it. I haven't traded FX since last Thursday as I simply cannot see enough resolve even for a medium probability swing. The EURUSD range is 1.24 to 1.28 and that leaves right in indecision land. I think at the moment the S&P and DOW are going to be the leading indicators. If they drop, the USD gets legs and if they rally, the EUR, GBP and JPY get legs

[#17]

AGL down to R 18300. See, that is what I was talking about. I sure hope you got out last night before close Brazen, it looks like the support on AGL might be gone...

[_nova]

All bets off on a long at the moment. Stochs are way oversold on the 5 min at 3 but the RSI is lagging at 24 and should hit at least 20 to confirm the way down stoch. If we get a bump here it will be small, no more than 100 to 200 pips so any swing trade should be in the direction of the primary trend which is down. Lagging indicators are also way oversold which tells me we'll likely go sideways from 16500 or slightly and slowly up over the next couple hours. Again it's all down to the US open and Asia looks ugly and US futures are red

[_nova]

medium risk long swing coming up on the TOP40 5min chart. RSI14 at 7 and Stoch at 7 while lagging indicators are way oversold. MOM and MACD turning up from oversold. I reckon there is a 100 to 200 pip long in the making right now from 16580 on the TOP40. However, it's against the primary so it's high risk with tight stops and a target of 16800

[_nova]

Stop moved up to 16600. Target 16800. Protected profit by selling 2 contracts at 16700 with another 2 aimed for 16800.