CFD Trading and Spread Betting: FTSE perks up, but struggles to find momentum
Giles Watts, Head of Equities at spread betting provider City Index (http://www.cityindex.co.uk/), takes a look at the financial activity shaping the markets on 15th April 2011. Headlines include investors remaining cautious as equity markets traded marginally better and hedge fund manager Man Group posting 3 percent gains. Investors remained cautious in early trading as equity markets traded marginally better. Strength in retailers and real estate helped keep the FTSE in the blue, whilst miners and banks weighed on the index. By mid-morning the FTSE was trading 12 points better at 5975, but was struggling to find momentum. Top of the leader-board was hedge fund manager Man Group; posting 3% gains after Merrill Lynch moved them onto their Europe One List. Real Estate giant British Land posted 2.5% gains as the sector was lifted by a positive note from JPMorgan. Investors were also buyers of retailers, as John Lewis's Waitrose reported strong weekly sales numbers. Solid updates from a bell weather of the high street proved enough to drive listed retailers better, Next and M&S both featured on the winners list. Trader optimism didn't extend however to the heavyweight Banks and Miners, crucially weighing on any FTSE advance. Banks continue to come under pressure as sovereign debt issues remain, particular in the light of Moody's recent downgrade in Ireland. Barclays and RBS all traded to new monthly lows. The mining sector conspired to taint the FTSE as strong first-quarter GDP growth and high inflation from China continue to fuel concern that further fiscal tightening will be required. Traders remain nervous as US reporting season takes hold, signs of improving profit are encouraging, but with stuttering growth a likely prospect, it remains likely that Investors will take a cautious approach to investment as we head towards Easter. Start spread betting with City Index at http://www.cityindex.co.uk/spread-betting/ Spread betting and CFDs are leveraged products which can result in losses greater than your initial deposit. Ensure you fully understand the risks. About City Index: Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform. As a group, we transact in excess of 1.5 million trades every month for individuals in over 50 countries worldwide. We provide access to a wide range of instruments including margined foreign exchange, CFDs and, in the UK, financial spread betting. We constantly look to widen the range of assets we offer, improve the performance of our platforms and expand the range of services we provide. The result is that our customers benefit from innovative trading tools with transparent pricing, competitive spreads, and a high standard of customer service and support. Visit http://www.cityindex.co.uk/ for more information.
Forex Trend Trading
Forex trend trading can be one of the most profitable ways of trading forex. We always heard people saying that "trend is always your friend" or "never ever trade against the trend". I can tell you that it is very true. Please let me explain more.
When a currency is trending, the price goes in one direction most of the time. If you are able to catch the trend, you can easily predict the movement and catch the starting point of the price movement. If you are good in trend trading method using with just one or two simple indicators or even none of them, you can purely predict a price movement from the chart and actually making profitable trades.
When a currency is trending, the price does not always move in favor of the trend although it does most of the time. There are times where the price will retrace a little once a while to get some momentum before carry on trending. Never ever trade with these little retrace periods as you are putting yourselves in a dangerous spot. These periods are hard to predict and you also will not gain that much as compared to trading along side with the trend. Never be greedy and attempt to trade these retraces just because you don't want to miss any chance. You are just taking in more risks and could lose whatever amount you have won. That is why we call this method forex trend trading. Trade with the trend, not against it.
Trading Forex Breakouts – 3 Simple Strategies You Can Use
Many traders spend a lot of time looking for potential breakout situations when trading the forex markets. This is because when these breakouts occur, they very often yield a lot of points. So bearing that in mind, in this article I will discuss three simple trading strategies designed to catch these breakouts.
The first method makes use of Bollinger Bands. This technical indicator is very useful in displaying areas of support and resistance, which is marked by the two outer lines of the Bollinger Band range. Therefore when one of these outer limits is breached, you very often get a breakout in the same direction.
So to trade this breakout you ideally want to wait for a period where the outer lines of the Bollinger Bands indicator have narrowed because this indicates a period of tight consolidation. This means that a breakout will usually have momentum when it does break out of this tight range. Then when the price does break through one of the outer lines you can either jump in straight away or wait for a pullback to a short-term Exponential Moving Average, for example, for a better entry point.