The FTSE managed to recover during the after hours session forming a double bottom on the hourly chart, and was trading up as far as the 6160 level overnight. At the open it was a similar scenario to yesterday with a sharp fall at the open. I managed to get in a small scalp as the market pulled back to the 20EMA and closed out at the overnight support level. Just taken a counter-trend trade off the 6100 level which really needs to turn up from here. If it falls back I may just cut this trade early.

The FTSE continued its decline from this morning’s session and despite a small recovery after lunch it ended up sub-6100 at the close. I managed one more trade this morning which was a counter-trend trade off intraday support (ideally I should have waited for the market to test the 6100 level) and was swayed by a little class-B MACD divergence pattern that was developing at the time. This afternoon I managed to get back in sync with the market and shorted off an intraday resistance level with MACD divergence (in the opposite direction) which worked out.

Start of the year and we could be in for a red candle day with the FTSE selling off overnight and taking another sharp fall this morning at the open. Looking at the higher time frame charts the FTSE is still within the downward sloping channel on the daily, on the hourly the decline has accelerated noticeably as its fallen out of the channel it was previously in.

My initial premise was to get long this morning as the first trading day of the year tends to be bullish, but I hesitated and waited for the market to retrace to the 20EMA, then got short trying to stay in sync with the trend. Closed out the trade for 25 points as the FTSE rallied back up off support, so a good start to the week.

First of all I’d like to begin the year by wishing all of my readers a very successful, profitable and prosperous New Year! I hope you’ve enjoyed reading my blog and over the course of the year, I hope to make it an even better resource for both experienced and budding traders. Please feel free to contact me if there is any specific content that you would like me to share or provide, and I’ll endeavour to do my best to deliver.

Now to business and a look at last weeks chart which shows the final stage of the end of year rally which managed to push the FTSE 100 index over the 6300 level, before selling off again along the downward sloping channel to close the year at approximately 6250.

Over the three days that I traded (didn’t trade on the 31st as market was only open for half a day), my performance was average. I tried to keep in sync with the short-term trend although I did place a few counter-trend trades based on MACD divergences and key levels. I was quick to bank the points when they were available and in hindsight would have done well if I held some of the trades longer, especially when trading with the trend.

As the market turned and sold off I took my foot off the gas pedal as it were, with the expectation that the rally would resume into the last day of the week. I would have done well had I simply traded off what I saw on the chart, and held onto some of the shorts from the 6300 level. Looks like the market has handed me another lesson!