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

Bullish?

Just as a final comment on the tapering issue, the IC carried an article last week starting as follows:
"The long awaited 'tapering' of the Federal Reserve's QE policy is likely to begin on wednesday. Economists expect the Fed to reduce it's buying of bonds from $85bn per month to around $70bn . Tapering is, says David Woo at Bank of America Merrill Lynch 'A done deal'. "
Of course it's just yet another opinion, but these guys are presumably far more qualified to make judgements than private investors on their laptops at home?
Presumably the foreign exchange traders had positioned themselves to take advantage of a strengthening $ in the event of tapering? Or did they also know that it wasn't going to happen yet?

Harry,

I'm not aware of any currency traders being able to walk on water just yet. Maybe that's one for next month....

:o)

But, what I'm saying is that nobody knew what the Fed were going to do. Traders would have only been interested in being long if the market went up and short if it went down.

Personally, I was already long cable from the morning of the Fed and I was happy to hold that position over the news because I considered the downside risk minimal. The day before it had been trading in a narrow range between 1.5885 and 1.5915. On the morning of the Fed, it broke to the topside of that range and resumed the uptrend which had been in place for a few weeks and which was clearly defined by a rising trendline which could be used as a stop. By the time of the Fed announcement, that position was already about 40 or 50 pips in the money and the market had moved into another range between 1.5960 and 1.5980.

I regularly use robots to enter the market and manage trades, and I have one that can be used on news releases. Basically, I set it up with its psuedo code saying:

If it's 5 minutes either side of the news

AND

the bid is greater than 1.5995 and the offer is less than 1.6015 (ie. the market goes up) -> GO LONG

OR

the offer is less than 1.5945 and the bid is greater than 1.5925 (ie. the market falls on the news) -> GO SHORT

I trade with 3 different raw spread ECN brokers (FinFX, FXCC and AxiTrader), and I run a rack of HP DL380 servers from the cellar of Nelson Mandela Towers. Normal round trip latency on a trade for me (ie. send the order to the broker, wait for its execution and get a ticket back) is around 400ms. On Wednesday night, I set the bots to trade up to 20 lots with each broker which was, in turn, split into 4 x 5 lots in case there wasn't the liquidity in the pool on a flash rise/crash. I managed to get 1 x 5 lot trade away with each broker. Presumably, by the time the bot looped around on the next price tick, the price had moved away from my entry range.

The alternative to that approach would have been to use buy or sell stops, but they wouldn't have been guaranteed and the risk would have been of getting a fill which was 50 pips or more away from the order level.

I closed Wednesday's trades manually after the football and once the market had settled. I've gone long cable again this morning.

The other thing to note is that I also act as an introducer for over 20 different Forex brokers. On both Tuesday and Wednesday, my commissions were down heavily, suggesting that most traders were hiding behind the sofa for the Fed.

Well done with that one Hils, just before the Fed I wimped out of a long EURUSD trade that I had held since 9/9 for 150 pips which would have been doubled. I also went long on cable this morning just after the new H4 bar on the basis that the H4 and daily trends are both up and there had been a retracement to the 21LWMA.

LOL... Rodney you dip-stick...

6620.8 gone short

Its witching - I've put a couple of limits in.

John,

With chunnel recently hitting 8 month lows, it's my opinion that cable has got to be the way to go for dollar shorts and fiber the preferred vehicle of dollar longs.

UK Budget Deficit Narrows Slightly

By Ainsley Thomson and Nicholas Winnning LONDON--The U.K. borrowed slightly less than expected in August as government departments reined in spending, but the official data showed little evidence of the country's recent pick-up in economic activity is translating into a rise in tax revenues. The Office for National Statistics said public sector net borrowing, the government's preferred measure of the budget deficit, was 13.2 billion pounds ($21.19 billion) in August, compared with GBP14.4 billion borrowed in the same month last year. Economists had forecast borrowing of GBP13.5 billion. In recent months, economic data has indicated a recovery is beginning to take hold in the U.K. As the economy strengthens it should lead to an improvement in the public finances as tax revenues from companies, sales and employment boost government coffers, while the amount the government has to pay in welfare payments, such as unemployment benefits, declines. An ONS statistician Friday said there is little evidence to-date of a rise in taxes from increased activity. However, he said stamp duty receipts--a levy on purchases of residential property--have strengthened between April and August, reflecting an increase in house sales. The detail of Friday's data show government tax receipts increased 1.4% to GBP41.2 billion in August, while government spending fell 2.2% to GBP51.3 billion.

Bit of a non event - spiked to @6,636.8

Yep agree with that Hil especially as the next euro crisis may be imminent, although the majority of my current trades are long AUD and short CAD.

Thanks for your post 13003 Hilary. I think I understood most of it! Much to learn!

Speaks @12:30.

6604 ftse short closed

arguably a brave call, but going long dow (currently down 140) shortly before the close looks tempting

Fiscal Cliff, emergency money runs out end of Oct begining of Nov cafeful on the DOW.

No doubt the can will be kicked further up the road as congress are unable to make a decision. Either way once news gets going we'll no doubt see a pull back on the DOW once again.

http://theinformact.org/ worth a skim over if you get time.

Apple really are suffering a PR disaster of late.

Apple Touch ID fingerprint tech 'broken', hackers say

Hackers claim to have broken Apple's iPhone 5S Touch ID fingerprint recognition system just a day after the phone was launched.

Germany's Chaos Computer Club claims it "successfully bypassed the biometric security of Apple's Touch ID using easy everyday means".

By photographing a fingerprint left on a glass surface and creating a fake finger they were able to unlock the phone, the hackers claim.