Short Swing Trading

SST Newsletter

Issue 11 March 2010

Hi Traders, and welcome to my latest newsletter. I hope you are enjoying your trading and showing a profit. I apologise for the delay in getting this edition out, I have had a lot on recently and the time just seems to slip by so quickly.

Since the last newsletter we have seen a significant retracement in the markets (Dow back to 10,000) followed by a very healthy push up to new highs for 2010.

For further comment, analysis and new charts go to the Market analysis page

It has been a pretty good trading period so far in 2010. The retracement provided some good short trades then the push up has produced some good long trades. The near future is not so certain as you will see from the chart commentary. As I write this the market is looking overbought but whether we see a retracement down or a sideways consolidation is impossible to tell. Sideways movement is the worst case scenario. As I am sure you appreciate, it is VERY difficult to make money if prices are just going sideways.

SST SwingTrader is generally pretty sensitive to trend changes. Obviously there is a point when the trend is changing and some small losses can be expected but this doesn't usually last long and can be detected by seeing that the "Prospective Trades" shown in the list have a real mix of long & short trades. Once a trend is identified you will see the vast majority of Prospective Trades showing in the same direction.

INDICES *
The final quarter of 09 did not trade well for Indices but they have picked up again now. In the most recent trades produced by SST SwingTrader it shows an overall profit of 565 points. The interesting thing is that the FTSE 100 made a profit of 229 points short closing on 12th February then the FTSE 250 made a profit long of 250 points closing on March 9th. The Dax also showed a profit of 167 points. Overall the profit for the period was 565 points.

Indices open positions are really interesting with long trades on all and doing very well following the recent bullish move. As I write this the indices watch list in SwingTrader is up by a fabulous total of 1,031 points.

For the full list of recently closed indices trades click here. Use "Back" in your browser to return. For open indices trades click here.

UK STOCKS *

If you look at the recently closed trades for the SwingTrader UK watch list you will see a number of whipsaws (losses) for short trades taken before the market turned up. However, to counter that there have been some excellent results from recent long trades. AVV.L produced 120 points, WCC.L made 155 but the star performer was RIO.L which made 170 points (169.9 to be precise). The total was a profit of 406 points.

AVV.L is again open long and up 63 points with all open positions currently up 160 points.

For the full list of recently closed UK trades click here. Use "Back" in your browser to return.
For UK open trades click here.

US STOCKS *

The US results have suffered a little recently due to a loss with GOOG. We can't complain because GOOG comes in with some spectacular profits. You may remember that in the last newsletter GOOG made 4,512 points and was up in an open trade by a further 4760 points so this time we can forgive a loss of 1987 points.

Other good performers were AAPL (+817 points), LULU (+ 511 points), VAR (+382 points with the star performer this time being TSL which made 2,903 points. Overall the US watch list ended up 2604 points. Not a great performance by our standards but a glance at the open positions reveals a much better story.

AAPL is going great guns again and up 2,804 points, JCP is up 703 and LLL is up 690. In fact only one trade is down and that is VCLK and only by 13 points so overall open positions in the US watch list are currently up 5,495 points.

For a full list of recently closed US trades click here . Use "Back" in your browser to return.
For US open trades click here.

Total points profit for all my recently closed trades for Indices, UK and US watch lists was 3575.

NOTE: These results are also available to view on the Trading Results page of the SST SwingTrader website. Use "Back" in your browser to return.

Note: I often get emails from UK traders asking if they should switch to the US market as it seems more profitable because they see trades in thousands of points rather than the hundreds we see from UK stocks. The answer is that first you must trade the market that appeals to you the most - perhaps because you know it the best. The points made can be misleading because US stocks are far more expensive than UK stocks and therefore you are bound to see a much larger point swing in a day. However, this also means that stops have to be placed with a much larger points risk and this must mean that position sizes must be smaller to have the same monetary risk. As an approximation your position size for a US stock would need to be a tenth of that in the UK. Looking at it another way a points gain on a UK stock of say, 60 would be the equivalent to 600 points (10 times) on a US stock to represent the same risk/reward ratio.

* All trades mentioned above are as a result of trading with the Short Swing Trading (SST) strategy after optimisation using SST SwingTrader trading software. Please click the link for more information and take a few minutes to look at the SwingTrader video - the link is on the left side of the page.

FOREX
My forex trading is progressing very well with my own robots still producing very good results and I will be trading a new hedge fund once it has been set up properly.

If you are interested in trying robots yourself then visit the Robot List page on my website. These are "off the shelf" robots that you can buy from other people. I am afraid I have not had any time in recent months to look closely at results produced by these robots but they are not that expensive and are worth looking at. Go to the Robot List

Two books this time:

Forex Trading Made E-Z By George Smith

I came across this book because it was recommended to me and it certainly lived up to expectations. George is an ex pilot who now trades Forex. The book is very well written and details his trading method very clearly and in a way that is understandable by novices but can benefit experienced traders. He supplies actual trading results and the book has links to 12 excellent videos showing examples of his method as well as live trading. In addition he provides an exceptional email service to all traders who buy his book. I cannot recommend this book highly enough! For details click here.

Bets and the City (Sally Nicoll's spread betting diary)

This is a great read for anyone interested in spread betting or trading generally. The Author, Sally Nicoll has an account at Finspreads and has also read all my books to hopefully help guide her on her way. It is a very funny account of her spread betting experiences and details her journey from novice trader, a journey that many of us will find familiar. I really enjoyed reading this and just had to finish it in one sitting with a huge smile on my face the whole way. It is available from Amazon.co.uk at £6.99

Spring is here! My skiing holiday is a distant memory, the snowdrops are out, the clocks go forward and we are looking forward to a fantastic long hot summer, getting out on the Harley and playing some great golf. Of course the markets will be perfect for trading. Well you must keep your dreams alive even if reality rarely lives up to expectations.

I have posted up a new entry on the "Just for fun" page of the members website. It is a genuine complaint written by someone to the police. One of those letters that you wish you had written yourself!

Very best wishes, stay healthy and enjoy your trading,

David Graeme-Smith

P.S. Just in case you are considering opening a spread betting account, remember to look at the special offer from WorldSpreads.