Caseynotes

Hi @DGRL, the calc will be different if you were using a guaranteed stop. "If you’ve limited your risk, by using a guaranteed stop for example, your margin could be calculated in different ways depending on the size of your trade".

Dow currently retesting the recent low after the disappointing retail sales yesterday so waiting for either a break below or a reversal to retest the recent high. Not much on the calendar today.

Poor US retail sales and PPI data dragging indices down;

Dax caught out this morning. Slightly better than expected German GDP figures on the Euro open sent Dax racing higher but Dow found sellers at the H4 resistance level and reversed hauling Dax down with it. H1 charts;

Though occasionally a false spike can occur for the reasons outlined above I've never seen anyone complain it affected their account. An interesting situation arising for one Plus 500 client on Tuesday . A spike down on eurgbp which doesn't occur on any other platform caused a margin call and position close on a short trade. A professional client with 1:300 leverage he has not been able to get any response from Plus 500 so is telling all, loud and clear, on twitter instead. I'll keep an eye out for future developments. See his video below.

Dow after a second retest of support at 25439 now looking for resistance, the most recent level to test is at 25626. The other indices look poised to follow. H1 charts;

IG 'Trade of the Week' Dow moves up through the daily chart resistance level 25439 mentioned in Monday's post, may see a retest of that today. The others following on with Ftse back up through the weekly resistance level for a second attempt on 7188. Dax making hard work of it and still has a lot of ground to make up to reach resistance at 11387. Nikkei finally breaks up through 20967. Daily charts;

Dow stalled yesterday after initially pushing up though 25156 from yesterday's post. Nikkei had a strong push up overnight and Dax has worked it's way into clear space while Ftse has moved up to resistance. Today will be looking again for Dow to push up through H4 resistance currently at 25244 and for Dax and Ftse to follow. As ever though, a failure at resistance usually initiates a test of support. H1 charts;

4 Hour charts and looking for Dow continuation of the uptrend with a test of the H4 resistance 25156 and then on to the daily chart resistance 25439. Ftse in a similar situation, UK GDP and manu prod data at 9:30. Dax and Nikkei with similar looking charts, Dax suffering a stream of poor data releases last week while Nikkei pulled into the Asian slump. Japan public holiday today. Not much on the Euro calendar this week, if Dow can make progress will be looking for Dax to follow.

Hi @Yvanka this occurs occasionally (for charts only, accounts not affected), when IG does it's routine system shutdown every Friday evening after the US market close. All platforms are shutdown for a few hours for updates and site maintenance and can cause a temporary false reading which disappears on the IG system restart which is usually in the early hours of Saturday morning. I see the false candle has been removed from the charts now.

right @Justinian, i only rarely hold positions overnight so doesn't really affect me.

That's right @Justinian, probably number one cause of failure is hanging on to losing trades. It's not even necessarily about the money, it's more to do with not wanting to admit you're wrong. There is a noticeable trend whereby the new trader starts out making predictions on the market then realising they can't do it, next step is to try and find someone who can and that blows even more money. Unless you're getting illegal insider information from an investment bank think to follow the market rather than trying to second guess it all the time. Major turns happen at major support/resistance levels or on major news, once a new direction is clear look for a place to climb aboard. Increased margin means keeping more in the account but not affecting trading otherwise, I never sail right on the edge anyway.

Interesting short article from Steve Burns on using moving averages. Moving averages allow traders the ability to quantify trends and act as signals for entries, exits, and trailing stops. They can become support and resistance, and give the trader levels to trade around. Below are examples of the specific moving averages with time frames. 5 Day EMA: Measures the short term time frame. This is support in the strongest up trends. This line can only be used in low volatility trends. 10 day EMA: “The 10 day exponential moving average (EMA) is my favorite indicator to determine the major trend. I call this ‘red light, green light’ because it is imperative in trading to remain on the correct side of a moving average to give yourself the best probability of success. When you are trading above the 10 day, you have the green light, and you should be thinking buy. Conversely, trading below the average is a red light. The market is in a negative mode, and you should be thinking sell.” – Marty Schwartz 21 day EMA: This is the intermediate term moving average. It is generally the last line of support in a volatile up trend. 50 day SMA: This is the line that strong leading stocks typically pull back to. This is usually the support level for strong up trends. Use 50-Day Average For Trading Signals 100 day SMA: This is the line that provides the support between the 50 day and the 200 day. If it does not hold as support, the 200 day generally is the next stop. 200 day SMA: Bulls like to buy dips above the 200-day moving average, while bears sell rallies short below it. Bears usually win and sell into rallies below this line as the 200 day becomes resistance, and bulls buy into deep pullbacks to the 200 day when the price is above it. This line is one of the biggest signals in the market telling you which side to be on. Bull above, Bear below. Bad things happen to stocks and markets when this line is lost.

Market correction yesterday on the realisation that not only did the recent trade talks produce nothing but that there is little hope of anything before the March 1 ending of the 90 day truce. Bets laid on expecting a better result were taken off the table. Thought for the day. For a year now the markets have been ruled by the China/US trade dispute's ups and downs but there are those who will tell you otherwise, that it's all down to technical corrections, or that a top or a bottom is in or whatever. Probably the most important attribute a new trader must learn real fast is how to spot BS, this is difficult because the new trader doesn't realise they are completely surrounded by it, this profession above most others attracts the BS'ers. Probably 80% of related content on instagram and twitter is BS. People calling the market, if they are ever right they crow loudly, when they are wrong they go quiet and wait for people to forget before starting it all over again. You need to block it all out and concentrate on reactions rather than predictions and having a plan for whatever the market does. Back to the charts and several support levels were taken out but Dow looking to find support at the top of the prior bull flag. Dax is more uncertain with the stream of poor economic data releases, fresh data due today so we'll see how that goes. Nikkei still looking for the buyers having not found them at the recent lows around 20401. And Ftse still holding up well and remains in touch with the longer term resistance level at 7146.

Following the early morning post Dow and Dax both broke lower while Ftse held. Dow finding support around 25186 and Dax, following the down graded growth forecasts has dropped all the way to the daily chart support level 11098.

EU officials have cut their 2019 growth forecast for the eurozone from 1.9% to 1.3%. By country see pic below.

Dow spent yesterday defining a new range and very graphically demonstrates what drives price. Price is driven to find buyers if there is a surfit of sellers and visa versa, at the bottom of the range an excess of buyers forced price to find sellers who had congregated at the top of the range, once there, price found an excess of sellers and so needed to find buyers who were congregated at the bottom of the range. You can never be sure 100% where buyers or sellers are waiting but a best guess is at a prior support or resistance level because it's an obvious place to hang out with like minded types, why buy higher up when you can likely get it cheaper, why sell lower when you can likely get a higher price. Indicators have nothing to do with this reality, the only indicator really worth having is an order book that isn't spoofed or dark pooled. So which way will price move next. Until a break it will continue the orderly retesting of the current high and low. If it breaks lower it will most likely head to the next support level, if it breaks higher it will most likely head to the next resistance level. Gauging direction is that simple, the tricky part is the actual trade execution. UK bank rate decision today, not much expected but the usual stoking of Project Fear.

Chart of Venezuela's oil production drop off since 1994.

Dow forms another bull flag overnight and Dax and Ftse follow suit while Nikkei still struggling with it's weekly chart resistance level at 20967. 4 hour chartrs;

Dax lead the charge out, Dow and Ftse followed. Dow back into clear space but Dax and Ftse closing in on their respective weekly chart resistance levels. If Dow can keep going will be interesting to see if Dax and Ftse can follow. 4 hr charts;

Dow and Ftse sitting on resistance looking to break higher this morning, Dax may follow while Nikkei tried to break earlier but was beaten back. 1 hour charts;

@didimakeamistake, most markets are nowhere near as bad as that one, I noticed that not only did it gap every weekend but when looking up the opening spread on Monday's first hourly bar that most of the hourly bars gapped as well. So we know it is a very illiquid market and best avoided for that very reason alone, or at least avoid using orders and go 'at market' on the deal ticket instead.

New week new levels. Dow with overhead resistance at 25189 and support at 24322, looking for a break and upside continuation. Dax sitting mid range between 11047 and 11321 so looking for a retest of either. Ftse held at 7032 and looking to break after a strong run up last week. Nikkei held at 20967 and also looking to break. Not much in the way of data releases this week, China public holiday all week.

@PandaFace, there are a series of links to new pdf files, one of below. https://www.ig.com/content/dam/publicsites/igcom/uk/190200_IGI_UK_FX_Margin_Tiers_Retail.pdf

ok @didimakeamistake, the order ticket decides whether it's a entry stop order or an entry limit order by where price is and where you place your entry and stop level. By setting the sell entry price at the Friday close and the stop above the platform decided it was a sell stop entry. So looking at the chart and if I've understood correctly what happened was that price on the Monday open had very big gap down and the diff between bid and ask (spread) was a very large 25 points, the first available price for a sell entry was at 1213 so the short was opened with the stop at 1238. Price then rose from the open, in order to get out of a short contract (your stop) you buy an equal long contract which means buying the ask price, the ask price certainly got to 1238 so the stop was triggered. Looking at the chart it is very prone to gaps, in fact there seems to be a gap every Monday. Gaps are like slippage, the order can only be filled at the best available price after market open if there are no buyers or sellers at the specified price.