rather than pick out individual stocks to trade, it can often be worthwhile to trade the indices themselves, especially in times of high volatility.

for those so inclined, i attach below charts for FTSE and FTSE 250, though one might equally be tempted to trade Dow or S&P, which is significantly broader in its coverage, or even NASDAQ

for ease of reading, i have attached 1 year and 3 month charts in each instance

So the forecast for the FTSE tomorrow is....?

re these huge rallies or falls - the only explanation I can come up with is that the computer trading programmes are just playing follow my leader

Stay away?, you must be joking MD. Have a look at trading ISF on the up and XUKS for the down..I'll leave the timing to you -):

stan , just been on the traders thread and seen one of the guys has had his biggest win ever so I have modified what I have said. It must be just me but these 100s of points moves in minutes just scares the hell out of me.

timing is always everything .....one could have easily lost money on Dow last night as made it

Maddoctor, that was me.

was not sure if you wanted your fame spread far and wide so left out name! :-)))

"re these huge rallies or falls - the only explanation I can come up with is that the computer trading programmes are just playing follow my leader"

A point I was trying to make on another thread that quickly died for apparent lack of interest.

I track the S&P 500 and it also went from about 5% down to 6.5% up.

In no way could humans made sales and purchases on five hundred different stocks over such a short period to effect that amount of change. And remember that whereas you can trade an index it trading price is determined by the value of the stocks it contains. So the computers that md is talking about are trading the 500 individual stocks - but seemingly making buys/sells based on the movement of the over-riding index.

Scarey stuff when you think that all this talk about recessions and oncoming gloom are dominated by the movement of indices like the S&P 500 - which is being driven by computers.

TP

lol MD.

TP , glad somebody is thinking the same way - although I don,t think they(the computers) are trading all the stocks - I have been wondering if they somehow pick out all the stocks say trading UP and buy those or pick all the stocks trading down and pick those. I would love somebody to try and give an explanation.

MD sometimes it can be irrelevant to "know", but just trade what you see in the short term.

Stan , agree entirely with you but interested cos something seems to have changed over the last nine years although the Elliot boys are presently showing a graph of what happened in 1930 and huge moves were made then over days in the bear market but I do not think in the minutes we are seeing now.

Yes agree with all that, but don't forget that that was then and this is now, all new territory.

I suspect last nights rally was short covering ahead of the G20 meeting. I don't suppose they'll come up with anything, but many will want to lock in profits just in case. I read somewhere this week that trading volumes are down too, so any buying or selling pressure creates relatively big moves. Given recent volatility, many will be running close stop orders, so a sharp movement against the trend probably creates a "domino effect".

My guess is we'll probably restest the lows after the weekend.

In my opinion.

Strawbs.

P.S. Well done Keaydian

md,

Glad someone feels there may be a bit of truth in my theory.

You may find it interesting to take a quick look at this thread

It drifted quite quickly but the theory I was suggesting was that it was the introduction of SETS that precipitated greater inter day volatility. And of course, going back to the pre SETS period we could not have had computer driven trading at all.

And no Stan, I am not saying it's more important than learning to trade in the present climate. I'm just postulating that these relatively dramatic swings in share prices may have ceased to provide a true picture of the world economy.

TP

ok KD, which way are you jumping with Dow today? ...... Freddie's numbers horrid and Dow indicating -190

Cynic, not touching it for the time being.

quite right too!

DOW
just to highlight current volatility
13:23 indicating to open -190
14:25 much the same, though it had been better in the interim
15:20 -210 though it has been lower and also 150 points higher!

Just testing the Dow at the moment. I'll soon see if yesterday was a fluke before I give back all the winnings.