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

This week’s financial spread betting update is now available and can be read by clicking here.

As we had written in last week’s post, the past week was an interesting week as expected. The US Federal Reserve meeting sent the stock markets higher and the dollar lower by underlining the Fed’s commitment to easing and supporting the economy. This also led to Gold hitting our $1300 target. So far today the markets are relatively quiet.

In the week ahead we will get a clearer idea as to whether stock indexes are going to continue higher as they approach further resistance levels and will also see if Gold can close above $1300 and continue to advance.

This week’s financial spread betting update begins with:

The past week has seen the US dollar continue to move lower against the majors, commodities continue to push higher and continued short term strength in the stock indexes, pushing stock indexes to 4 month highs. The long term trend is currently mixed for stocks but up for commodities and down 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’re going to look at the importance of having and following a spread betting system in order to ensure that we catch the big winning trades. We’re going to look at a real world example to illustrate the importance on this and how not following a system negatively affected one of the world’s top traders. In our last post on Stanley Druckenmiller, we commented that Druckenmiller had decided to close his hedge fund due his inability to make outsized returns over the past 3 years which he put down to very unfavourable market conditions.

One of the factors that have negatively impacted his performance this year is that, by his own admission, he missed the move in treasuries. Since treasuries have been the biggest and best trending markets this year that has been a fatal mistake. This does highlight a very important lesson for traders and that is that you must have a trading system, or in our case a spread betting system with specific trading rules and the discipline to follow it consistently.

A good spread betting system should include each of the following:

• Which markets to trade
• When to enter a trade
• When to exit a trade
• How much to stake on each trade
• How to know when to stay out of a market

Once you have a spread betting system that incorporates the above rules, all you have to do is follow it consistently. My guess is that either Druckenmiller was relying on discretionary reasons for entering trades rather than specific rules, or his system indicated an entry but he chose to skip the trades because he did not like them for some reason.

This is in fact where many traders fall down and the mistake can be fatal, as seen by the negative impact that skipping these trades has had not just on Druckenmiller’s performance, but on him emotionally as well and these factors may have led to him calling it a day.

In reality, nobody can be sure when entering a trade whether it will be successful or not and this is why once you have a spread betting system it is important that it is followed consistently. One can never tell in advance when the big moves are going to come and if you skip a trade for any reason and it goes on to be a big trend and a big winner you are in trouble.

One of the underlying principles of successful trading is that it is always better to risk taking a small loss than it is to risk missing a big winning trade. If the spread betting system used is good then only a small percentage of trading capital should be used for each trade, for example 2%.

If one is only risking 2% equity per trade then taking a loss of that amount is not too painful. Conversely, if a trader misses a trade that goes on to be for example a 10 to 1 winner, as may be the case in the current treasury trades then that equates to 10 x 2% of missed opportunity. That is far worse than risking the initial 2% loss. It is compounded if there are a handful of correlated markets such as in the case of treasuries, the 5 year note, 10 year note and 30 year T bond. Missing out on one trade is bad but missing out on all three is fatal. That is why we say it is always better to risk a small loss than it is to risk missing a big winning trade.

Because the markets only trend around 40% of the time all trend following systems will have more losing trades than winning trades. Therefore to make money you must have the big winning trades and ensure that you catch them when they come. If you don’t, you have no way to pay for the losing trades. This is why you must have specific rules to enter trades and rules to ensure that you don’t miss any trades.

Our spread betting systems, whether it is our forex system or our primary financial spread betting system for multiple market sectors both include rules to ensure that big trends are not missed and that trades are allowed to run to extract the maximum profit potential of each move. So, the question to ask yourself is “am I using a good system and do I have the discipline to follow it consistently?”. If you can answer yes to both then you are on the road to trading success.

Until next time, good trading

Phil Seaton

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

Today we are going to focus on some spread betting strategies using the 200 day moving average  and we will use the S&P 500 for our example.

The first thing to do on any market is to determine the direction of the long term trend for the market that you are looking to trade. Once you know this, you then select your spread betting strategies in the direction of the long term trend only and ignore signals in the opposite direction.

The reason for doing this is that counter trend moves have a much higher probability of not developing in to a good trend and moves against the trend are generally shorter in duration. In this case we are looking at the S&P 500, which is currently in a long term downtrend.

Each trader will have their own ways of determining the trend and this can be based on moving averages or any one of a number of indicators. One of the most popular indicators for determining this is simple moving averages. The most common time period for longer term trend analysis is the 200 day moving average. If the market is above the 200 day moving average, then the market would be in an uptrend and if below then it is in a downtrend.

I have developed my own proprietary indicators for determining the long term trend and each trader can do their own research to see which indicators and time periods they prefer. The 200 day moving average is widely used and is a good place to start, especially as many traders look at it.

On the S&P 500 September contract, the 200 day moving average is currently sitting at 1107, so as the market on Friday closed at 1070.3 this is below the 200 day moving average and the trend is down. Therefore, for the best chance of success, use only spread betting strategies from the short side.

In our last post on spread betting strategies for the S&P 500, in addition to observing the long term trend we also pointed out that the market was struggling with resistance from the 200 day moving average and the 1100 level. Since then the market had another go up towards the 1100 level and failed, moving back towards the support area at 1165 and even moving below that briefly.

Therefore, the short and long term trends are down so the odds favour lower prices in this market for now. Friday’s close at 1070.3 was a new low close for 4 weeks and this indicates short term weakness. For the short term, Friday’s lows of 1061.8 may provide support but if support here fails then we may see a move lower towards the 1000 level.

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. 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

Today we are continuing our series of posts of spread betting strategies for the S&P 500 as the markets continue to be undecided on short term direction.

The past couple of days have seen some movement in the markets during the build up to the Federal Reserve meeting held yesterday. During that meeting the Fed downgraded their recovery outlook and said that interest rates would remain exceptionally low for an extended period. This is not at all surprising and is in line with my own fundamental view on the markets long term.

Since our last post, the S&P 500 has still be unable to clear the resistance level that we have been writing about for what seems like an age now. Resistance is still holding at 1129 on the September contract but at the same time any declines down towards 1100 are also being rejected and this can be seen by the long lower shadows formed on the daily candles.

The past seven sessions have therefore 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 have a rising wedge pattern that is moving in to a narrower range and this also adds weight to a decent move from the eventual breakout. Long term the trend is still down for the S&P 500 so I’m still favouring spread betting strategies from the short side only and will continue to do so until we get a change of long term trend to up and that is some way off at present.

The 200 day moving average is currently sitting at 1106 on the September contract which is just below yesterday’s lows. Therefore this would be the first downside target, followed by 1100. If the market can break down through this support area then we may see a continuation lower towards 1050.

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. Our system comes with a full 30 days money back guarantee.

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.

Today we are looking at bearish price patterns and spread betting strategies. We will base this primarily on the S&P 500 as that is the primary stock index that we focus on. The reason we do this is that the S&P 500 is the real stock market and the other indexes tend to take their cues from the S&P 500.

There have been a few key levels and indicators in the S&P 500 that we have been writing about of late. We have previously been focusing on resistance from 1100 when the market was below that level and also the major resistance at 1129.

Friday’s close on the September S&P 500 contract was bang on 1100 and this week continued the recent short term strength and pushed up above 1100 and the 200 day moving average. This was relatively bullish short term and the market continued higher to 1118 on Tuesday. Critically, this move fell short of resistance at 1129, so the short and long term trends remain down. This means that only bearish spread betting strategies should be considered at this time as the odds favour lower prices.

Considering the recent strength and the fact that this market cleared 1100 and the 200 day moving average we should perhaps have seen more follow through and an actual test of 1129, but the rally fell short. We also have an evening star pattern formed in this market over the last 3 sessions, which is a bearish reversal pattern and suggests a top in the market. When we have an evening star, we use the top of the pattern as resistance, which in this case is Tuesday’s high of 1118. If the market moves above 1118, especially on a close, then this pattern is negated and a likely test of 1129 resistance will probably follow.

Yesterday’s price action also took the market back down towards support at 1100, with a low for the day at 1099.5, before closing at 1102. This is once again right on the 200 day moving average as well as support from the 1100 level. In the short term then this market can clearly go either way and the levels to watch are 1100 to the downside and 1118 and 1129 to the upside.

As long as 1129 resistance holds, this market is in a bearish set up and the long term trend is down, so we’ll continue to favour spread betting strategies from the short side and reject longs for now.

One other point of interest, certainly for UK residents who use spread betting is the bearish formation on the FTSE. The FTSE is not a market that I like because of its lack of trending properties, but I know many traders in the UK follow it. On Tuesday we had a shooting star pattern, which confirmed resistance at 5385, followed by a bearish engulfing pattern on Wednesday. This suggests a top in this market, and as long as 5385 resistance holds then bearish spread betting strategies should also be favoured here. The long term trend in the FTSE is also down, as with the S&P 500.

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 last post of spread betting strategies for Gold, posted Friday morning, we wrote that Gold was in a trading range between $1200 and $1175. Later on that day Gold actually pierced $1200 resistance intra day but was unable to stay above that level and proceeded lower.

On Monday the market was lower again and yesterday we got a downside breakout through support at $1175 (August contract). IG Index is now quoting Gold on the December contract so we now shift our focus to December’s contract. There is actually only $3.80 difference between the 2 contracts, with last night’s close on August at $1158 and December’s at $1161.8

Looking at the December contract there is some support at $1161, which is right where last night closed. In early trading this morning the market is around $5 higher at the time of writing this. Slightly below that support level we also have the 200 day moving average, which may also provide support. The 200 day moving average is currently sitting at $1150.

Candlechart pattern wise we have 3 consecutive red candles, which indicates 3 straight down days, with yesterday being a log red candle for the large move down from highs of $1190, down almost $30 in the day to $1161.8.

The short term is without doubt down, but the long term trend is still up and the market is above the 200 day moving average, which many traders will be watching. There are still other levels of support in this market that need to be cleared before a long term change of trend to down is confirmed, so for now we are sitting on the sidelines in this market. Longer term we’re still therefore only looking at spread betting strategies from the long side, but will need to see a move back above $1222 before there is any upside momentum.

Good trading

Phil Seaton

PS. Find out more about LS Trader financial spread betting system and our spread betting strategies by clicking here.

Today we are continuing our focus on gold and the S&P 500 and looking at spread betting strategies that can be applied to these markets.

In our last post 2 days ago on gold we wrote that the market was continuing to reject the lows and that if the market was going to move lower in the short term that the breach of support at $1185 should have had more follow through to the downside than it did. We noted that the lower shadows on the candle patterns seen on Monday and Tuesday were indicative of the lows being rejected due to buyers coming in and that the piercing pattern on Tuesday was pointing to higher prices.

Since then we had a doji pattern on Wednesday, which reflects indecision and yesterday we had a bullish engulfing pattern and a brief test of $1200, which was also rejected. Therefore we are in a short term range between $1175 and $1200. A break of either may give rise to movement but there is considerable support to the downside as mentioned in our previous post and upside resistance is firm around $1200. Long term the trend is still up, so spread betting strategies from the long side should be favoured and I’ll continue to hold off from shorts for now.

The S&P 500 continues to be volatile and large swings on an almost daily basis are being seen in this market. Yesterday was a very bullish day, which ended with being a bullish engulfing pattern. However, this would be a very poor long trade candidate for 3 reasons at present:

1. The long term trend is down
2. There is good resistance at the psychological 1100
3. There is also resistance from the 200 day moving average at 1102

If 1100 and the 200 day moving average can be cleared to the upside then we may see some further upside movement towards major resistance at 1129. As long as 1129 is not cleared to the upside then the series of lower highs and lower lows will remain intact and we are still in bear market territory.

As with gold, only spread betting strategies in the direction of the long term trend should be considered, which in the case of the S&P 500 is still down.

Good trading

Phil Seaton

PS. Find out more about LS Trader financial spread betting system and our spread betting strategies by clicking here.