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Wednesday, November 30, 2011

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. 

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