Great S&P gap trade

I spoke about the S&P gap trade before and we got a great one today.

In fact, there was a huge spike in the S&P today after it closed the gap but I had put in a ‘take profit’ order at a certain point as I knew I wouldn’t be at the PC all day to manage the trade. Still, the gap trade itself worked great and a good profit was made. If you look at the chart, I have drawn vertical line at 1195.1 (where the market closed yesterday). 

I got up and watched the market from 6am and it was falling at that point. I was waiting on a turnaround (a 15min green candle) and that happened around 7.30am (point A). I bought at point A and put in a stop loss. After that, it’s really just a matter of waiting on the gap to close. I had to go to work so I put in a ‘take profit’ order just below the black horizontal line. Around 10.45, the market had nearly closed the gap and I’m confident that it would have done so anyway but at 11am, the news was out about the Central Banks’ action and the price shot up. My order to get out was hit at point B. 

That’s the downside to leaving orders, if I had been watching it, I could have left my order open and enjoyed a huge price move rather than closing out early for a profit. That said, not watching the markets has its benefits: it takes away the emotion. All in all, it was a good trade and I was very pleased to log in a lunchtime to see a nice profit.

On the racing front, I only had the one bet today Derwen Pryde which won at 4.0. This brings my form study bets up to 64 bets and the profit to an all time high of over €200 to a €10 stake. I’m pleased with that and so far, I’m on track to start proofing again soon if it keeps going well. 

Haven’t had a look at tomorrow’s racing markets yet – I think I’ll get up early in the morning and do it as I’ve a bit of reading I want to do tonight. 

Driving, Euro trading, Betfair trading, Racing tips

As mentioned, I’m learning to drive and I’m quite proud of myself after yesterday. OK, it was only half a mile, but I drove down to the local train station and back, taking in some tight bends and a hill start along the way. This was my first time on the open road and while I was a little nervous, I felt a great buzz afterwards. I’m determined not to lose that bet with the missus and I think she’s getting worried! The car has a slow puncture though, so I’ll have to get that sorted today or tomorrow. I used to fix punctures years back when I worked in a garage so I should be able to do it myself. I’m going to try to keep up the driving as much as I can – even just small journeys but often will help.

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With regard to the trading (financial markets), I’ve been staying away as I just can’t see any opportunities. No point in trying to trade for the sake of it. The Euro (versus USD) is a puzzle right now – there’s been bad news for most of the week but it has rallied strongly this morning (see picture below). At 7.45 am, we were down around 1.3282 but as I type, we are already up touching near 1.34. A good bounce trade if you can get it but I’m sitting it out for a bit as I’m finding it hard to trade. There’s rumour of a massive IMF loan being made available, mainly for Italy, but we’ll wait and see if that materialises.  

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Haven’t really been trading on Betfair much – I’m working during the daytime and I decided to knock the evening all-weather on the head as I wasn’t making money on that. I hope to get back to it soon though and I’ve bought a new microphone as I’ve had a number of emails asking me if I’d make some more youtube videos. I’ve some time off over the Christmas and new year so I hope to clock up plenty of hours then – although I do want to actually go to some of Leopardstown (as I do every year). I’ve also had a few emails asked if I’d run a trading course for those that are trying to learn – I’ve no immediate plans to do so but it is something I might think about in the future. There could be a couple of bob in it if I got the right numbers – but when you start charging people for stuff, there comes a lot of responsibility and extra hassles. I’ll think about it after Christmas maybe but for now, it’s an idea that is being put on the long finger.

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I was complaining about a bad run on the horses a few days back but I’ve had a good turnaround and hit six winners in-a-row with the form study stuff I’ve been doing. Funny how things can turn around quite quickly. Years back, I would panic during the bad spells and start changing things around. But when you start to fiddle with things, sometimes you  muddle the whole thing up and end up worse off. You have to prepare for the bad runs and take them on the chin. Likewise, you can’t let the good runs go to the head. Individual races don’t really matter too much – it’s all about grinding it out over the long term. I’m back over the 50% strike rate which is pleasing so fingers crossed, it continues to go well. As mentioned, I may re-establish the free tipping website in the future if these continue to be successful. I didn’t charge for the tips in the past but I used to make a nice couple of bob from affiliate links and also donations. I said I’d give it 100 bets before I started proofing again, just to make sure I could still make it pay, and also to make sure I could get up early every day and put in the graft! So far, I’ve had 31 wins from 61 bets and the profit to a ten euro stake is around €196. Generally speaking, I’ve been focusing on the shorter end of the market and the average Betfair SP is 3.32. I'm comfortable with this although the margins are tight. Sometimes there seems to be an obsession with punters trying to get ‘value’ bets at big prices but value can be found at all ends of the market and I don’t have any rules about what price I will or wont take. Some people won’t back odds-on for example but the only rule I follow is that the horse should have a better chance of winning (in my opinion) that the odds suggest. If so, then it’s a bet. I don't really understand the idea of not taking short prices. If a full strength Manchester United showed up to play the local pub team and someone offered you 10/11 on United, would you refuse as you don't back odds on? OK, it's a silly example but ye get the point. 
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I got up early and done some work this morning and picked out two interesting ones – although I’m going to watch the market as I’m not 100% on either of them. In the 1.30 at Folkstone, Ohio Gol d looks like a good thing and my own ratings have him some 20lbs clear of the field. But 1/2 seems a little tight with some unexposed sorts in the field. Hmm, I’ll have to study this on a bit more.

In the 2.55 at Ffos Las, Azitone looks well ahead of the handicapper and by my reading of the form, she should win with plenty in hand. But I have reservations about this one too – I’ve been watching some of her races and she’s not what you would call genuine. Like most of the fairer sex (!), she’s  contrary and she only gives it her all when she feels like it. She’s currently trading around 11/10 and I think I’ll have to do a bit more work on this race too before I decide to back.So overall, I think caution is the theme for today.

Anyway, that’s enough rambling from me for now - best of luck with your punting, trading, or whatever else you get upto today.  

Euro/Dollar 15 minute chart:

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Great day

Had a good day punting so far with my Irish Independent article doing very well. I had Overturn as my main bet which won at 7/4 and Carruthers at 10/1. Just had Half A Sixpence go in there too which is one half of my double. One more to go, Circuitous, at 8.50 which I've backed each-way 'to nothing' although the price is now in to around 3/1.

Hope I don't come across as boastful but ye gotta sing when you're winning!  God knows, there's enough losing days in this game. 

It's nice to get a few nice priced winners in this side of Christmas - as mentioned I hit a rough patch recently but thankfully, it didn't last too long.

Was out for a few jars with the lads last night so I think I'll just take it handy tonight and do a bit of reading or maybe watch a DVD. Actually, I have one called 'Enron' which is suppossed to be good so I may watch that.

Haven't had a chance to go through tomorrow's form - think I'll get up and do that early in the morning. Won't get to trade the racing as I want to go out and practice my driving. That's going OK although it's proving a bit harder than I thought! I kinda miss the motorbike but I'm going to keep plugging away at it. As mentioned, I've a bet with the missus for €150 that I'll drive down and pick her up from work before Christmas and I hate losing!

Today's Indo:

HORSE RACING can be a great leveller of men and it doesn't let you stay smug for long. Last week, I was feeling a little vainglorious down in the local with the lads when Overturn, which was my main bet of the day, came home at 5/2.
But soon after came the Betfair Chase at Haydock, in which a mate of mine had backed Kauto Star. He asked what I thought of his bet and I told him that Kauto was finished -- and that I wouldn't back him using my mother-in-law's account.
I was bullish about Long Run, but five minutes later my mate was all smiles getting the rounds in while I was sent to the corner of the room to think about what I'd done. But on this occasion, I was happy to be wrong and it was great to see the old battler turn back the years.
I did my dough on it, but as Kauto came over the last, the racing fan in me became stronger than the punter and I actually found myself cheering him on. Win or lose, those type of races remind me why I love this sport.
As mentioned, Overturn took the Coral Hurdle at Ascot last week and I'm happy to stick with the seven-year-old as he takes on Binocular in the Fighting Fifth Hurdle at Newcastle today (2.20).
As pointed out last week, Overturn has got to be one of the most versatile horses in training and we were set for a cracker of a finish before Oscar Whisky fell at the last. Whether Oscar Whisky would have won we'll never know, but Overturn ran a great race regardless, and I was particularly impressed with his jumping this time.
The 2010 Champion Hurdle winner Binocular is a great horse, but I'd have this pair evenly matched, so taking 11/4 over 4/5 is a no-brainer. Indeed, Timeform have them both rated equally and, on official ratings, the handicapper has them only a pound apart.
Binocular's backers have to assume that he's fully tuned up on his first run of the season, as he hasn't been seen since finishing third to Hurricane Fly in the Rabobank Champion Hurdle at Punchestown. He was beaten twice in this race before, so I'm surprised to see the backers get stuck in once again this time around.
On the other hand, Overturn's backers will be hoping that last week's race didn't take too much out of him, although the vibes from the yard are good on that front. While Binocular beat Overturn in the Christmas hurdle at Kempton in January, there has been a lot of water under the bridge since then and I reckon it could be closer than the market suggests.
Celestial Halo is a decent animal and will take them on a good gallop, but it looks like a match between the top two market leaders. At the prices, Overturn is the value option.

EACH-WAY OUTSIDER
I read this week that the inaugural Hennessy Gold Cup in 1957 was won by Mandarin, owned by Peggy Hennessy. Peggy was a member of the family that founded the drink, and it's now the longest commercial sponsorship in British racing.
Trivia aside, though, this is a tricky one to figure out and it looks like Aiteen Thirtythree will go off as favourite.
While that gelding has strong claims, he's a bit short in the betting and preference is for Carruthers, which is generally available at 16/1.
He managed to finish sixth in last year's renewal, which was excellent considering the strong field that included Denman and eventual winner Diamond Harry.
Mark Bradstock's front-running gelding can go the distance, he's a good jumper, and he always gives a genuine effort (3.10 Newbury).

TODAY'S SELECTIONS
2.20 Newcastle: Overturn
3.10 Newbury: Carruthers (e/w)
8.20 Wolverhampton: Haaf A Sixpence
8.50 Wolverhampton: Circuitous (e/w)

DO THE DOUBLE:

SOCCER
Manchester City may be on top of the table but a trip to Anfield is often fraught with danger for the Citizens, and they haven't won there in their last eight league visits. This could be tight and I'm going to play it relatively safe with a double chance bet on Liverpool (win or draw) at 4/7 tomorrow.

HORSE RACING
Haaf A Sixpence ran well to come second in his first career race at Kempton recently considering he took a wide course. While he was no match for the winner, he looks reasonably promising and should land a maiden sooner rather than later. The Enjoy The Party Pack Group Offer Maiden Stakes is a weak enough contest and at 6/4, Ralph Beckett's gelding is a fair price to get off the mark this evening (8.20 Wolverhampton).

Irish Independent

http://www.independent.ie/sport/horse-racing/overturn-can-strike-again-2946404.html

The Euro, a bad spell on the racing, mobile devices, tooth fairy

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Have to say, the Euro (versus USD) is proving more resilient than I thought despite all the bad news. When a product is constantly receiving bad news but still holds its price, it must be respected. I’m still bearish in my view of the currency but I was surprised to see it hold above 1.33 and rise back up to over 1.34 this morning. This comes on the back of German bonds not selling which did put a bit of pressure on yesterday. I must admit that I feel it should be around 1.30 right now but it doesn’t really matter what I think – the markets will have their way. It’s a holiday in the US so it may be quiet enough, but I think I’ll leave the Euro alone for the next while. 

By the way, the S&P gap never closed yesterday so I got stopped out for a small loss. Nothing much to worry about though but it’s still a kick up the arse. 

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I mentioned before that I’ve been doing some proper form study each day and that it has been going well. But I’ve hit a bad patch and of the last 17 bets, I’ve only had five winners. Included in that,  I had five losing bets along the way which cost me a few bob. Considering the strike rate was 50% up to this, it’s a little disappointing. But I’m not too worried – I did hit 7 winners in a row at one time so the opposite must be expected now and then. It’s all about taking the good with the bad. Thankfully, the early gains have provided a cushion for the losses and I’m still up overall. Again, after 100 bets, I’m thinking of proofing these again for my site (provided it stays successful). As we stand, we have:

Bets: 55
Wins: 24
Strike Rate: 44%
Return on investment: 27.57%
Average price (Betfair SP): 3.54
Profit to €10 stakes: €140.60

I’ve a couple picked out for today – although they are mostly short prices. Please God, they give the bank a little boost:

12.50 Uttox – Golden Chieftain
1.05 Thurles – Apt Approach
2.00 Uttox – Mangonel
2.10 Newb – Grand Crus

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For anyone who reads this blog on a mobile device, you should see an improvement in the layout. I’ve switched to the simple view for smartphones etc rather than the regular webpage. Hope it helps a bit.

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Best of luck with your trading/betting today – I could do with a good day as the tooth fairly called again last night. A fiver she left! 

In my day, you were lucky to get twenty pence as the tooth fairy’s husband “was out of work” and they hadn’t got much money, according to my old man. Ha ha, God rest him, and God bless the early 80s.
I do remember one particular occasion though,  when the tooth fairy’s husband must have found some work - as I woke up to find one of these beauties under the pillow:

Course in trading, S&P 500 gap trade, Lingfield racing

Finished the diploma in Financial Trading last night and I found the course excellent. I learned tonnes and am looking forward to putting it into action and hopefully earning a few bob. I also have access to their trading days in their office on the 3^rd Friday of the month which I’m looking forward to. Basically, you bring in the laptop and trade with the tutors for the day – they are on hand for mentoring and advice. Can’t go this week but I may try make the December one. 

The next step with my financial trading is to go through all my notes and come up with a proper trading plan. I’ve been doing OK at it but it’s been quite hap-hazard which isn’t ideal. There’s no point in jumping on the laptop whenever I can and trying something out – I need a timetable and must decide when I’m going to trade. I need to know what I’m going to specialise on and what style of trades suit my personality.  For now, daytrading isn’t really an option but I do have the two hour timeslot from 6.30am to 8.30 to place a few strategic trades, plus some time at the weekends to look at longer term positions. I may concentrate on that timeslot for the next month or two and see how it works out – although it does mean getting up early each day. Still, I’ve never been afraid of a bit of graft so I don’t think it will be any bother. 

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One of the topics on the course was the S&P gap trade and I have an open position on that today. I’m not giving any secrets away when I explain how it works – it’s one of the most widely known trades out there and as such, it has certain self-fulfilling qualities. 

Basically, you check what price the S&P closed at the night before (around 9pm Irish time). At this point, the Asian markets take over while the Europeans go to bed. In the morning (6.30 to 8.30), you check if the S&P futures has dropped from that closing price overnight. If so, you buy it and wait on the gap to close to the previous night’s close. It can be quiet for a while but when the Americans come in, they usually close the gap as most Americans still prefer to buy rather than selling - and don’t like to see us pesky Europeans and Asians shorting their stock.  If the gap hasn’t closed by around 3pm, you get out as by that stage, the ‘real’ market is in full swing. 

To see an example, look at the chart below.

Last night, the S&P closed around 1188 (I’ve drawn a black horizontal line at that price). I’m basically hoping the price rises back up to this price. You can see in the night/early morning trade, the price went lower and dropped to around 1169 at one point. 

When I got up at 6am, the price was around 1172 which was a fair gap from 1188 so I bought in anticipation of the gap closing before 3pm today. As I type, it’s slightly up on that and I’m hoping the gap will close up to the black line when the Americans arrive at their desk. 

As mentioned, because it’s one of the most famous trades out there, it kinda becomes a self-fulfilling prophecy as people buy in anticipation of the gap close and thus push up the price. Of course, it doesn’t always work and a news item could destroy the trade so proper stop-losses should always be in place. I’m heading out now but I hope that the gap has closed by the time I check back around 3pm. If so, the profit will be in my account and that’ s a good job done. 

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One the racing front, I’ve no huge fancies today although I do think Princess Lexi is worth a punt in the 3.45 Lingfield. She’s off a lower mark here on the all-weather and she ran well for the new yard last time. 3/1 on the machine looks a fair price. 

Best of luck with your trading/betting or whatever it is you get upto today!

Gloomy Monday?

Seems to be a gloomy feeling in the markets so far this morning with a lot of major products down.

I'm bearish on the Euro and it's taken a fair hit in this morning's trade. The S&P500 and the EUR/USD have been pretty much tracking each other over the past couple of weeks and it's not surprising to see the S&P down too.  I normally like to try the well-known S&P gap trade - but I'm going to give it a miss today as there's been a fair drop this morning and the mood continues to be negative. Besides, we've some 'Existing Home Sales' data due out in the US later so that will probably take over the markets.



By the way, Forex Live is a great site for finding out the latest news that will be coming out each day and how important or not it is - they have an excellent calender for that stuff:


http://www.forexlive.com/economic-calendar/


Make sure you adjust the timezone to suit locally. It's essential to know what big announcements are being made. When I started trading, I'd often forget to check the calenders and the next minute the markets would start going mad over some news and I'd lose a packet!


On the racing front, there doesn't seem to be a lot of opportunities out there although I do like the look of Mangoel in the last at Kempton, priced around 9/5. She wasn't doing much at all but she switched to Jim Best's yard and he seems to have figured her out.



Anyway, here's the Euro vs Dollar 15min chart for this morning, showing the early losses. It's interesting to see it test the 1.346 level numerous times here and fail to break up through. There's almost a straight line of about 6 candlesticks on that level:

Update: racing tips, financial trading, Euro 2012, books on trading

Haven’t been online much this week so hence the lack of blogging but here’s a quick update of what’s been going on:

Form study
Going much better than expected. As mentioned, I’m putting the work in each morning and being very selective. The long term view is to get the free tipping site back up in running if I continue to be successful. So far, I’ve had 23 winners from 46 bets – the strike rate has been remarkably consistent around the 50pc mark. I’m very pleased with this win rate as the average price is 3.2 (Betfair SP). A price of 3.2 suggests that the horses should have a win rate of only 31pc so a win rate of 50pc is great. The profit to a €10 stake is €179.90. The longest sequence of winners was seven in-a-row and the longest sequence of losers was 3 in-a-row. I don’t want to get carried away, any high strike-rate strategy is bound to hit on nice winning streaks and that’s possibly what happened - although as the bank and the number of bets build, so does my confidence. If the profit to a tenner is anywhere between €250 to €300 when I’ve 100 bets under the belt, I’ll be a happy bunny. Just one bet for today (Rith Bob, 1.40 Wincanton) although the price will be short. 

Diploma in financial trading
Is going great – we are into week 6 and have covered tonnes of stuff. Really starting to form a view on things and the course was definitely worth the money. Some of the work we are doing really reinforces the idea that simplicity is often the key. Who was it that said KISS (keep it simple, stupid)? I think this principle is definitely worth thinking about in trading. Again, some of it is obvious – risk reward ratios, stop losses, not fighting the market, learning to live with a lot of small losses... It’s stuff most traders should know inside out but rarely follow. The course reinforces it all but also gives strategies and insights from traders that have been doing it for a living for donkeys years. 

The markets
Haven’t had the chance to trade Betfair in a while with work etc, and the evening racing now finished. I said I’d leave the poor all-weather stuff alone for a bit as I was losing money on it so I’ve done that. On the financials, I’ve been trading in small sums and also using the demo account. I’ll continue to do this until I’m finished the course as I still feel I’m learning all the time.  I’ve been mainly selling the euro and trying out some stuff we learned on the S&P on the course. I still have a fairly bearish view overall. I was probably moving a fair bit off my horse racing brief but in my Irish Independent ‘Betting Ring’ column on Saturday, I suggested that the Euro would fall a couple of cent against the dollar this week and it’s went from 1.37 to near 1.34. I’m happy about that – but my racing tips that week turned out to be donkeys! Ah well, ye win some and you lose some. 

Ireland soccer
Fantastic to see Ireland qualify for Euro 2012 and it kinda takes me back to the good old days of ‘Jacks Army’. Please God, we’ll have some good times in the summer – half thinking of going over for a match or two. 

Books
Currently reading Mastering the trade by John F. Carter. I’m not far into it, just three chapters, but I can tell that this is a really excellent book. It’s very readable (which is rare in the trading genre!) and has plenty of real life examples and strategies. It’s good on the psychology of trading too which is of huge importance. Most trading books are hard work but this one is enjoyable to pick up. I recently finished God in the pits, confessions of a commodities trader by Mark Ritchie. It was a very interesting read (although it’s a good few years old) and mainly concentrates on how he is trying to lead a good (religious) life alongside his other life in the often murky world of trading. It’s very interesting although it’s more of a biography than a trading book.

Cheltenham, Novebmer

Anyone who knows me well will be aware that I much prefer punting on the flat and find it easier to make a few bob - so the return of the National Hunt is not something I welcome as much as most Irish people. However, as a spectacle, the NH is always better to watch and it's hard not to get a little excited as the season starts to kick off with some decent races at Cheltehham. Of Irish interest, Garde Champetre is hard to oppose in Friday's Cross County although at 12 years of age, he's no spring chicken. Still, early odds of just under 11/10 on seem pretty decent and I may just have a dabble.

In the soccer, I'm hoping for an Ireland win obviously although their style of play can be odd and I'm not doing to well betting wise under Trap's set-up. We are 4/11 to qualify so fingers crossed we get something away to Estonia.

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The badge of a Garde Champetre, which is actually what rural policemen are called in France:

So far, so good

I mentioned last week that I may set up the tipping site again. As stated, I’ve been putting in some serious form study again and so far its paying off so I’ve a loose plan on what to do with the site. I’m going to continue testing at home until I reach 100 bets at which point I may stick the selections on trial on the blog (before re-establishing the main site). 

If it continues to be successful after, say, 100 bets on the blog, I could then start the main site again and start proofing. Not sure if that’s what I’ll do but I want to keep working hard and testing before I decide to get the site up again. Sure we’ll see how it goes. At the moment, I’ve 34 bets under the belt, with 17 winners (50%). The ROI is 50.47% and the average price is 3.57 (Betfair SP). The profit to a ten euro level stake is €171.60. 

I don’t expect to continue to hit those highs (especially as the season has changed over) hence the further testing before I post but I have to say, I feel good to be getting up early and doing the old form work again.

Don’t take these as tips !  but there are two selections today I hope will go well – Distime (3.10 Bang) and Sheikh The Reins (5.20). Fingers crossed they go well.

In the financial markets, it’s been a mental week. Can’t believe the Germans and French got rid of Berlusconi. That’s two European leaders in a week – the cynics could say that the takeover is well and truly underway.  Markets rose last night but fell this morning and it’s looking like Italy needs a bailout – one that we can’t afford really. Interesting times, although hard to trade. 

No more Bunga Bunga parties:

Betfair, Greece & trading the Euro/Dollar

Sorry folks, haven’t posted all that much lately, mainly because I haven’t been trading much.

On the Betfair front, I haven’t been around during the day as I’ve a lot on with work and most of the evening stuff has been crap. I’m finding it harder than ever to make money from the low quality all-weather meetings and I get the feeling that there’s not much non-trader money in the markets that can be picked up. The liquidity is low and you see the markets getting manipulated quite a bit so I’m thinking of quitting the poor quality evening stuff – or at least reduce stakes.

On the financial trading, I haven’t done much either as the markets have been mad with all the chaos over Greece. Good old George Papandreou really threw a grenade into the room when he said he’d have a referendum on the bailout!  Now he’s backtracked but you’d wonder what he was thinking all along.Whether you agree or disagree with the whole bailout thing, most sides would agree that they are all as mad as hatters.

I’ve been keeping an eye on the Euro against the USD on all of this and was a bit surprised that it didn’t drop a little further. For a good few weeks, it traded in a range from around 1.40 to 1.45 but then took a dive for the month of September. It recovered a bit in October but it’s too hard to predict at the moment and I reckon the best option is to go to cash right now and sit it out for a bit. At times like this, I like to go to my demo account - in that way, I’m continuing to trade (and keep on top of the markets) but not risking any money. There are other influencing factors of course but until the Greece (and possibly Italy!) thing settles, it could be choppy waters. As I type, we are at 1.38 or thereabouts. 

Managed to make  €320 day-trading the S&P 500 today with a bank of 20K.  Pity it was my demo!!

EUR/USD daily chart & my S&P trade.