Tonight we are doing a free one-hour webinar with Jeffrey Gibby from Thompson Reuters and Metastock. This one-hour class will feature the MetaStock programs system the RMO and starts at 7pm UK time.

You can register for this free class by clicking here

We have made this webinar available for our subscribers and readers because it’s important to have access to good charts and market data and I believe that the charting package from Metastock and Thompson Reuters is the best available, so much so that I use Metastock 11 Pro and Quote Center every day in my own trading.

Regular readers will know that I rarely if ever promote other products or services to our subscribers because quite frankly, most of them are not good enough for us to promote and we don’t want to put our name to something that we don’t use. So, when I do recommend a product, you can be sure that it is for good reason.

As you are aware, I’ve been providing trading services aimed primarily at the financial spread betting markets for nearly 4 years.  I believe in the power of technical analysis over fundamental analysis as my research shows that what is needed to trade a market successfully is contained in the price and the chart pattern. The price contains all the knowledge about each particular market of all market participants at any given time and the chart pattern can indicate the all-important long and short-term trends.

A trader does still need a system to follow and the discipline to stick to it. That’s why a combination of our spread betting systems and Metastock charting software can be very powerful.

For this reason it is of paramount importance that a trader has access to good, reliable market data and a good charting platform to view it from if they are going to make their own trading decisions. For this reason, we have teamed up with Metastock so that you can get special deals on your charts and data and also know that the products are approved of and used by us. Metastock and Thompson Reuters provide numerous packages for this to cater for all different trading styles and different markets.

Now, as you know, it is not necessary to use any charts or data services to follow either the LS Trader system or the LS Forex system as we provide you already with everything you need. However, many of our subscribers trade additional markets to those that we cover and we get asked many times about charting and data packages and which ones we use and recommend. In addition, many of our subscribers like to look at the charts of the markets that we are trading and looking at charts gives an excellent visual representation of what’s going on in the markets.

If you are interested in trading your own choice of markets or want to learn how to read charts or follow along with the trades that we make, we invite you to check out the products and special offers that Metastock has for you.

You can register for this class by clicking here

Good trading

Phil Seaton

Last week legendary hedge fund manager Stanley Druckenmiller announced his retirement from the investment world and stated that he was going to close down his Duquesne hedge fund. Druckenmiller was part of the team (along with George Soros) that broke the Bank of England in 1992 when they bet that the British Pound would fall against the Deutschmark and racked up profits on the day of around $1 billion. Druckenmiller cites his reason for retirement as his inability to make out-sized returns over the past 3 years due to very unfavourable market conditions.

Now, I don’t know what his issue was in 2008 as our spread betting system had a record-breaking year and there were a lot of very good trending markets across many different market sectors and this enabled our trading system to have its best year on record. 2009 and 2010 I can understand though as market conditions have been tough for everyone due to excessive volatility and global uncertainty.

The question is, what does this say about the future of hedge funds and the future of trend following? Whilst many believe that this is a bad sign if someone of the knowledge and experience of Druckenmiller has struggled to make money I actually take the opposite view. My belief is that Druckenmiller quitting is actually a great sign for future performance of hedge funds and especially trend following systems and funds and my reasoning is as follows:

All trading systems regardless of what they are based on will go through periods of good performance and periods of lesser performance. This is down to the nature of the markets and the fact that no strategy can be effective in all market conditions. Trend following systems will suffer during periods of excessive volatility and non-trending markets because they rely on good trends to make profits.

What we have seen in our own research and this is also quite well known amongst experienced traders and fund managers is that investors, especially amateur investors generally tend to bail out at the worst point, usually near the bottom of the equity curve. This is usually due to a period of poor performance exceeding their threshold for what they can handle.

At a higher level, the fund manager, also feeling under pressure from his investors and due to the need of better performance also seeks to change his strategy after a prolonged period of under-performance. Once the pain reaches a certain level amongst investors and fund managers, Druckenmiller quitting is evidence that we are at or very near that point we will then likely see mass withdrawals from hedge funds.  This will mean that moving forward not everyone is chasing the same moves and many will then use different or even opposing trading strategies. This will very likely free the markets up again and return them to a strong trending phase.

When someone of the calibre of Stanley Druckenmiller calls time on his trading due to how tough he is finding market conditions, that to me telegraphs the fact that we may be near the bottom of the equity curve and that it is in fact a great time not to quit, but to begin.

The markets essentially do one of two things, they either move directionally, i.e. trend or they move sideways, i.e. consolidate. In our trading research we have seen without doubt that following a prolonged period of one, a good period of the other follows. This is in fact quite logical and can be seen in many different markets. In 2008 for example, there were many out-sized trends in many market sectors and what has followed since has been a brutal period of consolidation.

It has always been my belief, based on my own research, that following a brutal consolidation phase, the likes of which have not previously been seen to the extent that are currently seeing, that an excellent period of trending markets will follow. These large trends could be either up or down. Trend following systems don’t care whether they are buying or selling, they can make money in up or down markets.

Now, whilst it would be foolish to say that Druckenmiller’s inadvertent timing is perfect as a contra-indicator, I wonder if around a year or so down the line we can look back and say that Druckenmiller actually came out near the bottom of the performance curve. My bet is that he won’t be far off and the next few months will tell the tale. I also would not mind betting that he makes a return to the markets himself at some stage in the future.

Until next time, good trading

Phil Seaton

PS. You can find out more about our trend following financial spread betting systems and spread betting strategies by clicking here. Our system comes with a full 30 day money back guarantee.

Today we are bringing you an update on spread betting strategies for the S&P 500. This market has continued to be of great interest to many traders as it is the primary stock market from which the other stock markets take their direction. The only stock index not following the S&P 500 at present is the German Dax, which continues to be in a long term uptrend. That said, a major move down on the S&P 500 will very likely drag the Dax down with it.

In our most recent post on the S&P 500 2 days ago we wrote that the market had held within a range from 1127.5 to 1102 and a break out from that range could give some decent movement in the direction of the breakout. We also mentioned that we had a rising wedge pattern that added weight to an eventual breakout and that we were therefore still favouring short spread betting strategies for a breakout to the downside, especially if the market moved back below the 200 day moving average and the 1100 support area.

We have since got that breakout to the downside with the S&P 500 moving back though the 200 day moving average and through the 1100 support area, making a new low for this move at 1070.50 during yesterday’s trading. This was the lowest level for the S&P 500 in 3 weeks and we still have our next target to the downside at 1050.

What is of great interest in this market is that the major resistance level that we had been writing about for several weeks at 1129 held firm in spite of numerous attempts to break though, all of which failed. This means that 1129 may be a significant high for this market and that we remain in bearish mode as long as the market stays below this level. Because 1129 failed then the market is still making lower highs and this is also bearish.

If the market does fall to 1050 and support there fails then we will be looking for the lows formed on the 6^th July on the September contract at 1003. For now we will continue to trade the S&P 500 with the trend and that continues to be to the downside.

Until next time, good trading

Phil Seaton

P.S. You can find out more about our financial spread betting systems and spread betting strategies by clicking here. Our system comes with a full 30 day money back guarantee.

P.P.S For those that are interested in spread betting forex markets we now have a dedicated forex system. You can take advantage currently of a 30 day free trial to our forex system here

This week’s financial spread betting update is now available and can be read by clicking here. The weekly update is to bring you up to speed on what has been happening in the markets over the past week as well as what to look out for in the coming week so that you can plan your spread betting strategies accordingly.

During the past week we saw continued weakness for the US dollar and an overall rise for the stock markets. The S&P 500 stayed below the key resistance level of 1129 but will likely test that level this week and possibly as early as today as the futures are opening higher at the time of writing this on Monday morning. European stocks indexes, in particular the German Dax, have continued to rise, and the Dax has reached its highest level in almost 2 years.

The best trending markets continue to come from the interest rate futures sector and all of the markets in this sector remain in a long term uptrend.

The biggest moves of the week came from the grains sector and we saw some limit moves from Wheat as well as higher prices virtually across the board from the grains markets.

This week’s financial spread betting update begins with:

The past week has seen US stocks continue to move higher but still remain within the overall lateral trading range. Last week’s US jobs figure sent the markets tumbling at the US open on Friday but then show a strong recovery. We may see a breakout for stocks this coming week..….continue reading by clicking here

Good trading

Phil Seaton

PS. You can sign up for a risk free trial of our proprietary financial spread betting system by clicking here. The system comes with a 30 day no questions asked money back guarantee and covers each of the stock, commodity and forex markets discussed above.

Our last post of spread betting strategies focused on Gold and the S&P 500 and we’re going to continue with those two markets today.

Beginning with Gold, we last said that we had a bull harami pattern, which was indicating that the bears were running out of steam. We also said that there was support around the $1150 area and that the markets was still above the 200 day moving average.

The bull harami pattern has so far proven to be the short term bottom and we have now had 5 successive up days in the December Gold contract. Yesterday the market pierced the $1200 level intra day, reaching a high of $1205.5 but was unable to close above that psychological number and pulled back to $1195.9 on a close. We need to see a close above $1200 in this market soon otherwise we may see a pullback to the bottom of the bull harami pattern.

The long term trend is still up for gold but a break above $1220 resistance will be required before entering longs. For now only spread betting strategies from the long side should be considered as the long term trend is up. I would not consider shorting this market yet for that reason and would need further downside confirmation to change that point of view.

On to the S&P 500 September contract. The S&P 500 has so far not pierced the resistance levels seen on the 21^st June, although it is very close to doing so. The Dow and FTSE have both already cleared that resistance level. At the time of writing this morning the September contract is at 1125 so it is very likely that we will get a test of resistance today. Since the resistance at 1129 is major (it has held since 18^th May) a breakthrough may provide the impetus for a move higher towards 1170.

Even if the S&P 500 does clear this level the long term trend is down, so I won’t be taking this breakout if it does come as it is counter to the long term trend.

Until next time, good trading

Phil Seaton

PS. You can find out more about our financial spread betting systems and spread betting strategies by clicking here.

Over the past few years we have had a number of our subscribers ask us to create a forex spread betting system. Although forex is part of the original LS Trader System, our subscribers wanted a system that was dedicated to and optimised for the forex markets.

I’ve been working on creating this forex system for a couple of years now and completed my research on it at around the end of 2009. Since then we have been trading it ourselves to check that the actual trading results lived up to the promise of the backtesting results, and so far this year things have been very encouraging.

As of now the system is up 56.2%, and being that we have had just over 7 months of the year, we are pretty much on target for 100% this year assuming that things continue in their present fashion. This is especially pleasing considering how volatile other markets have been and the lack of trends that we have seen so far this year across most of the financial markets.

Forex has been one of the best performing sectors this year and we have seen some decent trends already. Earlier in the year we had strength in the US dollar, which led to some good winning trades, especially against the Euro and Swiss Franc. Over the past few weeks we have seen a reversal of fortune for the US dollar and the dollar is now moving lower against most of the majors and we are benefitting from this move lower by trading with the trend.

A huge advantage of forex spread betting is that on the whole the forex markets trend very well. Other advantages include tight spreads from the spread betting companies such as and obviously highly liquid markets.

All in all, combing forex markets with financial spread betting and trend following is a very powerful, profitable and easy to use combination. You can find out more about our forex signals here

Until next time, good trading

Phil Seaton

PS. Click here to find out more about our forex signals. We’re currently offering a 30 day all access free trial.

This week’s financial spread betting update is now available and can be read by clicking here. The aim of this update is to help you decide on your spread betting strategies for the week ahead.

During the past week we saw further weakness for the US dollar and indecision in the stock markets which having tested recent highs ended the week pretty much where they began. In early trading on Monday stocks have begun the week higher and we may get a test of 1118 on the S&P 500, which is resistance 1 soon. If that level is cleared then a test of resistance level 2 may follow, which is major resistance at 1129. The trend remains down as long as resistance level 2 holds.

Elsewhere the commodity markets had a good week with some decent up-moves seen in numerous markets, especially in the grains sector. One of the few commodity markets that did not fare so well was gold but this market seems to have found support.

The strongest and best trending sector at the moment continues to be the interest rate futures and both the 5 & 10 year T notes made new contract highs during the past week. We continue to be long this sector and have been since early May.

This week’s financial spread betting update begins with:

The past week saw the stock markets continue in the mixed fashion that we have seen of late and the markets remain undecided on future direction. We have also seen commodities begin to pick up, with some markets making decent moves to the upside and have seen continued weakness for the US Dollar.….continue reading by clicking here

Good trading

Phil Seaton

PS. You can sign up for a risk free trial of our proprietary financial spread betting system by clicking here. The system comes with a 30 day no questions asked money back guarantee and covers each of the stock, commodity and forex markets discussed above.

Today we are going to discuss spread betting strategies that can be used ahead of a major news item. Later today the second quarter US GDP numbers come out and we get asked frequently about which spread betting strategies we use ahead of such major news announcements.

The answer is actually quite simple. Since we are technical traders and follow mechanical trading rules we are either already in a trade if we want to be in it, or know where we will get in should our entry criteria be hit. We don’t base our trading decisions on trying to predict the news items, or how the markets will react to the news. We simply follow the trend.

Since our spread betting system is a weekly system, we don’t enter trades immediately before, during or after a news item as we are already in the trades that we want to be in. We don’t therefore enter again until the following Monday, using the closing price on Friday as our entry should the price action in the immediately preceding week trigger a buy or sell signal for us. We therefore use spread betting strategies based on a weekly timeframe and don’t concern ourselves with intraday news.

Trading systems are either predictive or reactive. We don’t get involved in trying to predict, but rather react to price action. We know already where we want to get in and where we want to get out based on the price and chart structure. The rest is irrelevant. Should the market exceed the levels that we have predetermined will be optimum for entry, either for long or short trades, then we will enter. If the market does not exceed those levels then we stay out.

Let’s just look at what is expected today as far as the news is concerned out of interest, although we won’t be basing any of our spread betting strategies on it. Economists are expecting that US GDP growth for the second quarter will come in at 2.5%. I expect that it may disappoint and come in lower than that, possibly closer to 2%. If that does happen then we may see a reaction to the news that moves stocks and currencies considerably.

We have already covered this week that the long term trend is down for stocks and have identified a couple of key resistance levels, which are 1118 and 1129 on the September S&P 500. As long as the market stays below those 2 levels then the short and long term trends will remain down and the odds favour lower prices.

Yesterday we got a close below the important 1100 level at 1097 on the September contract and also below the 200 day moving average, which many traders look at. We also had an evening star pattern form on the S&P 500 earlier in the week which is bearish for the short term so various things point to lower prices to come.

What this really boils down to is that you should have a trading plan in place ahead of any news items or price reactions and know exactly what you are going to do and why. Once you have your plan in place then you stick to spread betting strategies within that plan and trade accordingly.

There are many traders and economists that try to predict news items and how the markets will react to the news item depending on what the numbers are. It’s far better in my opinion to just focus on the most important indicator of all, which is the price itself. Then all you have to do is follow the price and the trend.

Until next time, good trading

Phil Seaton

PS. You can find out more about our financial spread betting systems and spread betting strategies by clicking here.

In our most recent post of spread trading strategies for gold we wrote that the $1215 level for gold was still key to the upside and failure for the market to clear that level would lead to a test of strong support at $1185. Last Friday’s close at $1185.8 was a new low close for 9 weeks, so without doubt the short term trend was moving down.

Considering the short term weakness in this market, a failure of support at $1185 should have led to a move down to the next support area at $1168, but having moved lower initially on Monday to $1176.9 the lows were rejected and the market climbed a bit but still closed below prior support at $1181.9, giving a new low close for this contract and a close below prior support.

Yesterday the market made another push lower but once again the market rejected the lows and pushed higher again. This formed a piercing pattern on the daily charts, which is a bullish reversal pattern and the market closed back above $1185 at $1191.7. At the time of writing this morning, the market is fairly quiet, hovering just below the $1190 level.

When considering which spread trading strategies to use on gold, there are a few things to consider, firstly, without a doubt the long term trend is still up and therefore the odds favour higher prices. It will take a large move to the downside to change that long term trend to down.

Also to be considered is that we have 2 good support levels in the market at $1168 and also at $1157. We also have a third good support level at $1125 and the obvious $1100 level as well. Therefore, to get a decent move to the downside would require bulldozing through several strong support levels.

In the more immediate term, the last 2 days candle patterns have reasonably long lower shadows and this indicates rejection of lower levels as well as yesterday’s piercing pattern, which is also bullish short term. I’m not a buyer at these levels as that would be counter to the short term trend and will be waiting for more strength before entering longs, but will not be entering short any time soon.

Good trading

Phil Seaton

PS. Find out more about LS Trader and our spread trading strategies by clicking here.

This month’s financial spread trading newsletter is now available. To read the newsletter, please enter your email address in the box at the top right hand corner of this page and we will send it to you instantly by email.

In this month’s issue we take a look at the majority of the 43 markets and the major market sectors that we spread trade at LS Trader, focusing particularly on the major stock indexes, commodity and forex markets as well as the interest rate futures sector which covers short term interest rates all the way through to 30 year bonds.

This month we focus primarily on the stock and forex markets, as that is where much of the action is likely to be over the coming weeks. We look specifically at major support and resistance levels in some of these markets as well as what our LS Trader trend indicators say about the markets and what may happen next.

In each month’s issue we focus on the long term trend and cover some spread trading strategies that can be used in the direction of the long term trends to increase the odds of successful trades.

We also have a market of the month section, which this month focuses on a market that has continued to rise against the odds and looks set to continue higher, especially if further weakness hits the stock markets.

Good trading

Phil Seaton

P.S. To receive each month’s newsletter by email simply enter your name and email address in the box provided in the top right hand corner of this page for instant access.

P.P.S If you are not already a subscriber to the LS Trader system you can sign up for a risk free trail by clicking here. The LS Trader system is a complete spread trading service and comes with a 30 day no questions asked money back guarantee.