Further declines across the global equities markets this week saw the FTSE remain under the 6000 level, closing out the week just shy of 5800. The FTSE bounced off the lower trendline of the downward sloping channel with much of the recovery actually happening outside of trading hours on Friday.

As for my personal performance I finally managed to get in sync with the market at the end of the week and had 10 winning trades and only one losing trade on Friday. The mid-week break and trip to Anfield was a bit of a distraction which meant that I couldn’t trade on Wednesday or on Thursday morning, and was glad to get back in the swing of things on Friday.

There were a few areas of improvement such as trading larger size when the market looked like it was going to tank, as well as holding onto my winning trades for longer, and adding to existing positions (Friday was a perfect opportunity to do just that). Looking forward to trading next week, expecting the markets to rally back initially as they normally do, and set themselves up for further falls later in the week. 5850 could be a key area of resistance next week; also will be interesting to see if this channel holds.

Its been a very volatile week with the FTSE being dragged down with the global sell off following the huge falls in Chinese stocks and currency. Unfortunately my performance has been a little hit and miss, especially towards the end of the week as I was a little anxious, expecting the market to rebound.

The 4 hour chart below shows the extent of the decline and also provides a look at the bigger picture:

My intentions going into this week were to continue to trade with the trend, and that was the case at the start of the week. After reviewing my trades, however, it turns out that I placed a few risky counter trend trades which I may have done well to leave altogether. I also hesitated and missed taking positions off some key levels with the FTSE trading in the downward sloping channel as it was; case in point being that 6014 level on Friday.

We saw a recurring pattern with the FTSE this week (except for Friday) which was a sell off at the open, the market stabilising from about 11am till 1 to 2pm, recovering during the US session, and then finally selling off after market hours or overnight. Again, I failed to maximise my returns as I didn’t manage to exploit this recurring theme – I should have traded larger at the open and followed the initial direction of the market, and left the counter-trend trades for the afternoon session. Additionally, the trades that I did take with the trend were closed out for a profit, however, they could have netted larger returns had I held the trades longer till the end of the morning session.

On the positive side, I finished the week in the ‘blue’ again and managed to hold onto the gains from earlier in the week. Just kicking myself that I failed to really smash it … Still more room for improvement.

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!

It was a good start to the week but unfortunately I didn’t manage to keep that momentum going and was getting a little sloppy towards the end of the week. The points tally was positive which I guess was the main thing.

So what made it a tough week? On Monday we had some heavy buying during the out-of-hours Asian session, but once the market opened it headed back down quite sharply. I think I got short trading the MATD (morning after trend day) and had a good read on the market up to then…

The FTSE 100 index reversed later that afternoon and really took off from there, recovering over 300 points from Monday’s low, trading within the upwards trending channel until Thursday afternoon. Think I was a little surprised with the strength of the pullback given the rest of the news (e.g. the FED planning to raise interest rates), and couldn’t bring myself to really get totally in sync with the market this week.

Looking back at the chart now it would have been good to hold a portion of my trades for over a day or two. Additionally there were several good opportunities to add to longs during the course of the week, especially as price fell back to the lower trendline along the channel or the 20-period moving average.

I’ve also marked out Fibonacci extensions on the chart and as you can see the marked has fallen through the 50% retracement level. In hindsight I was expecting the 38.2% level to hold on Friday; partially why I took that counter-trend trade which unfortunately lost me 20 points. Will be interesting to see if the FTSE makes it down to the 70.5% level (ICT OTE), as that will be an ideal area to get long. Watch out for that 5950 level … remember, you heard it here first!!

Also noticed that my charts are getting really messy by the end of the week with too many levels which can get confusing at times. Normally I start off marking my charts over the weekend and mark up the key levels on the daily and hourly charts in pink (bold line). I then go down to the 15 and 5 minute charts to draw in the intraday support levels plus the high and low of the previous day in red (thin line). On Monday morning my charts look relatively clean, however, during the course of the week more intraday support and resistance levels are defined and added so by Friday the 5 minute chart gets a little noisy!

Only one more week to go before Christmas … Perhaps we may have a Santa rally the week after and close out 2015 with a bang! Have a great weekend!