The trade has now broken key resistance and is pushing nicely higher

The trade has now broken key resistance and is pushing nicely higher

Hi there traders,

It has been nice to see the FTSE100 trade run nicely ever since the post pre Christmas http://springboardyourself.com/2013/12/15/will-santa-rally-the-markets/ – a very nice gift 🙂

So let’s recapture on the process from the very start to where we are now:

1. ENTRY – Looking for technical reasons to enter the trade. We have discussed at length the reasons for entry on the video updates, there were many fantastic factors suggesting a turn was imminent. The turn happened and we managed to get a very efficient entry into the very turning point off a key base of support.

2. MANAGEMENT – Based on my own style and one I teach to many of my students, is to take two positions on a trade (see http://springboardyourself.com/2013/12/30/when-to-take-those-hard-earned-profits-its-the-million-dollar-question/).

As we have seen, position 1 (with a 1% profit target) hit target quickly and then enabled us to leave trade 2 alone (just moving stop to breakeven). Trade 2 has no target, instead we can employ a trailing stop where we keep locking in profit as the trade runs in our favour. I employ several techniques but ultimately I look for a location on my chart where I feel my stop will be protected.

Looking at the FTSE100 chart today (see image above) we can see that price consolidated sideways for several days before aggressively breaking out to the upside. This provided a very obvious location for my stop, just under the low of the consolidation. This is an area which buyers aggressively protected and so an ideal place for a stop.

This now locks in another +1% on this trade whilst showing an open profit of +2% to go alongside the +1% already banked. And the most incredible thing about the trade is that if it goes completely against us now, we still take further profit. However based on our bigger picture analysis we can see much more room for further profits so we shall continue to trail our stop accordingly.

In due course I will do a video blog update discussing various stop management techniques I use to good effect.

For those of you who are in this trade, you now have an answer to your question of how to best manage it. For those who didn’t take it, it is a brilliant lesson to help you with your trading for the remainder of 2014.

Happy hunting
Tom

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A look at how the first major trades of 2014 are continuing to show a healthy profit.

Looking specifically at FTSE100, EURGBP, NZDUSD, AUDUSD & GOLD and how these are being best managed for further profits/opportunities.

Video  —  Posted: January 12, 2014 in Trading
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A brief look back and a brief look forward at some of the best current trades of 2013/14. Please view in HD (720p) for best quality (you can alter this in the video settings).

Video  —  Posted: January 5, 2014 in Trading
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Time to start fighting back!

The first training session of the new year is undoubtedly the hardest but the most important so no time like the present to get back into the swing of things!

Mine certainly wasn’t the best session I have ever had, but I feel a whole lot better for it and am now raring to take on 2014!

Happy New Year & Happy Training 🙂

Tom

Image  —  Posted: January 2, 2014 in Uncategorized
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Taking Profits

Good afternoon from a very wet London,

I hope you had a lovely Christmas and took some time away from your charts to relax and enjoy some family time.

No doubt, like me, we are all feeling a little lighter on the money front having come through a very expensive period of the year. So nothing better than to re-focus our attention to the skill of trading and specifically profit taking. Also, ever since I posted the blog http://springboardyourself.com/2013/12/15/will-santa-rally-the-markets/ I have received a number of emails asking about when and where to take profits.  So I hope the below helps.

Knowing when to take our hard earned profits is quite the challenge (and does rely heavily on your trading strategy) and it would take me a great deal longer than a few paragraphs on my blog to explain the full utopia of options out there. Instead, I will provide some suggestions which I have personally used to good effect over the past 7 years of trading and use the FTSE100 trade as illustration for this.

But first, why is taking profits so difficult? You would think this would be a highly rewarding and enjoyable experience but sadly it’s not. When a trade is running nicely into profit like the stock indices have, the confusion that comes across many newbie and even seasoned traders is as follows:

1. If I DO take profits now, what if it keeps going?

2. If I DON’T take profits now, what if I give everything back?

These thoughts are natural and come down to our basic FEAR OF MISSING OUT. As humans, we never like to miss out on anything, especially not profits! So, based on understanding this human psychology (and you know how much emphasis I place on psychology)…let’s go through a step by step analysis of the FTSE100 BUY position we looked at a couple of weeks ago:

STEP 1 – Using your charts and technical analysis, ask yourself, where is price likely to go? 

With the FTSE100 you can see there is a large channel which price has been in-between since 2011 and has reacted sharply to the bottom support level (which was our entry zone). Therefore price, realistically has the potential to achieve around 800-900 points before it reaches to the top of it’s channel. Fantastic reward potential and well worth taking the trade. Knowing this profit potential then encourages you to stick with the position through it’s journey.

ftse

Step 2 – See what technical road blocks could effect your trade on the way?

Do you see anything on your chart which could effect your trade on it’s way to your major target? In the example of the FTSE100, price is in a short term wedge so could encounter near term resistance around 6800 (see chart below). This is reason enough to have a plan for taking profits along the way, just in case price does react here.

ftse1

Step 3 – Decide on when and how you will take profits (before you take the trade)

A long term target is great to focus your attention on the bigger picture of the trade but price may or may not reach this level. So look to take some profits along the way and be able to move your stop to breakeven (your entry price) as early but as carefully as possible. By taking some profits along the way, you get to overcome your desire to realise some capital gain (and to reduce the worry of giving profits back) whilst still keeping a position on to enjoy the rest of the ride.

In the chart below, you will see the technique I often use to obtain my short term and long term profits. These are as follows:

1. Open a trade with 2 positions (I split my maximum risk across these i.e. 2% max risk split over 2 x trades of 1% risk each)

2. Position 1 has a profit target of +1%. Position 2 has no profit target i.e. open ended.

3. Once profit 1 has been hit, I move my stop on position 2 to break even (risk free trade)

4. I leave trade 2 to run and trail my stop accordingly.

ftse2

Summary

So, there are just a few tips and techniques for profit taking which I personally use and also teach to others. Why these specifically? Well I know all too well, from personal experience and from coaching other traders, that our minds play havoc with our trading rules. By having a take profit system that enables you to get both instant gratification (money in the bank from position 1) and also long term growth (position 2) it helps you reduce the fear of missing out that we spoke about earlier and can do wonders for your discipline.

Having the second, risk free position on the FTSE100 means that now I can let the market do it’s thing without having to worry too much. If we do hit the long term target of circa 900 points it would mean a return +7% to go alongside the initial 1% already banked. Even if the trade falls short and the trade only achieves half this amount it is still a return on your investment that you are certainly not going to find elsewhere, and a major reason I continue to love and promote trading the financial markets.

I hope this helps and sets you up nicely for a very profitable 2014.

A happy and prosperous New Year to you all.

Tom

Merry Christmas!

Merry Christmas!

Hey there,

I hope my final blog of 2014 finds you in good festive spirit 🙂

So those of you following the information in my last trading blog (http://springboardyourself.com/2013/12/15/will-santa-rally-the-markets/) should have seen (and hopefully benefited financially) the highly predictive nature of the markets. Global stock markets rallied throughout the whole week as expected and EURGBP turned exactly 6 pips/points higher (0.8466) than the 0.8460 we expected sellers to re-establish their dominance.

So firstly let’s look back at a great trading week on the stock markets. My last blog focused on the FTSE100 and the S&P500 but you could have taken your pick on any of the major stock markets of Europe and the US as they all did a very similar thing. See below for just some of the BUY opportunities which were flagged on my technical indicators last week:

FTSE100 DAILY CHART (Trend Line Support, Stochastic Divergence, 786 fib ret, 1.618 fib ext, weekly hidden divergence, BUY indication provided)

FTSE100 BUY

DOW JONES (US30) DAILY CHART – A similar technical picture

DOW JONES (US30) BUY

DAX (German Stock Index) DAILY CHART – Momentum flows through European stock indices too

DAX (GERMAN 30) BUY

Remember the key thing here is that, as you saw from last week’s blog, we had a major fundamental reason to BUY stock market indices due to the Santa Claus Rally factor but we still needed a technical reason to enter and to help time our positions perfectly. At the time you are about to enter trade, you should have as many reasons as possible (i.e. a strong case) as to WHY you should be buying or selling a particular asset class. In the case of the above examples, each had very strong cases (never any guarantee’s) to buy. They have followed through my expectations and I can now sit on these positions and try to squeeze as much profit from them as possible.

The power of Technical Analysis/chart reading…

Another position identified in last week’s blog (to keep your eye on) was EURGBP (for sell opportunities) around the 0.8460 level. This was due to an abundance of technical reasons that were spotted in advance most noticeable the significant trend line resistance, horizontal resistance, a 61.8% fib retracement and some clear hidden stochastic divergence. Now I wasn’t expecting such a sharp reaction but react it did and on the very day, posted a sell signal via my indicators (see below):

EURGBP DAILY CHART 

EURGBP SELL

If this pair has a similar run down as the last reaction to the trend line in October, it should provide a nice start to 2014.

Charts which look interesting for 2014

Due to the festive break, and the reduction in market liquidity I won’t be looking to trade until the second week in January when I know the institutions have returned. But some charts that are interesting me are (but not limited to) the following:

NZDUSD DAILY CHART

NZDUSD

Based on the technical reasons mentioned in the following blog (http://springboardyourself.com/2013/12/15/will-santa-rally-the-markets/) I will be looking for price to break and close above the key trend line resistance. There is fantastic upside to complete a bullish technical chart pattern so will be worth waiting for if it does what we want. I will also need a BUY signal on my indicators to confirm strength to the upside before entry.

AUDUSD DAILY CHART

AUDUSD

This pair has been on an extremely bearish run, with price reaching the major low of 2013 at around 0.8855. Price tried to break it and failed on 2 consecutive days before pushing higher. The stochastic indicator is also putting in clear divergence suggesting a reversal. I will need to await a BUY signal on my indicators before proceeding with this one. A more conservative approach would be to wait for a higher low to form to confirm the changing trend.

USDCAD DAILY CHART

usdcad

This pair has reached a multi year level of resistance and is now beginning to show exhaustion to the upside. A new high has just been formed without being able to hold above (false break). There is also significant stochastic divergence suggesting a reversal is imminent. An aggressive approach would be to look for technical entries / buy signals around this area but this is recommended against given the fact we are heading into the Christmas / New Year break. Waiting for the first lower high would be a more conservative approach.

Summary 

As ever all of the above are for illustration/education purposes. Use your own skill, experience and strategies to qualify the opportunities you decide to take and as most importantly, risk manage.

So, this wraps up 2013. I hope it has been a successful and highly rewarding year for you and has set you up for an even better 2014. I look forward to being part of it.

I want to take this opportunity to wish you a very Merry Christmas, have a magical time with your loved ones and catch you in the new year.

Best wishes

Tom

A diet may give short term effects, but for long term, sustainable fat loss there are better ways

A diet may give short term effects, but for long term, sustainable fat loss there are better ways

Hello Springboarders,

A controversial heading for this blog, but one I feel very strongly about. I talk from personal experience when I say diet’s aren’t sustainable and thus ineffective for fat/weight loss. I have tried a variety of diet’s (in my strive for that cover model six-pack which kept avoiding me!) from the trendy low carb diets all the way through to the weird and wacky juice diets. All had an effect on my body fat/weight albeit a short term one. Why? The key word here comes to sustainability. Why go through the torture of a diet if the results don’t last? More often we revert back to a position worse than when we started. But, you will be pleased to know, there is a more sustainable way and all it takes is a bit of maths and some discipline.

So let’s get straight to the basics of fat/weight loss. In it’s very simplistic form, our bodies will do 1 of 3 things:

  1. Calories eaten/energy in GREATER than calories burnt/energy out = Weight gain
  2. Calories eaten/energy in EQUAL to calories burnt/energy out = Weight maintenance
  3. Calories eaten/energy in LESS than calories burnt/energy out = Weight loss

However it sadly isn’t that simple and we need to be a bit more scientific/mathematical with our approach. The great thing is, the maths is not difficult and I am going to tell you exactly what you need to do. But why do we have to do this? Well everybody is different and we need a plan that is specific to us and we must take into account key variables such as gender, age, activity levels etc…so that we have something highly applicable and bespoke to us, not our mate who lives down the road who has the body we want but runs 30 miles a week and is 10 years our junior!

So let’s get straight to what we need to do to start losing weight/reducing our body fat % in a sustainable way. I am going to break it down into 3 easy to follow steps, and then it is down to you to implement it to see results:

Step 1 – Work out your personal calorie requirements

It is critical to understand based on your age, gender and activity level, how many calories you require per day to simply stay alive. This is known as your Basal Metabolic Rate (BMR).

Use the following ‘Schofield Calculation’ to work out what your BMR is:

MEN:

18-29 years BMR = 15.1 x Weight (kg’s) +692

30-59 years BMR = 11.5 x Weight (kg’s) +873

WOMEN:

18-29years BMR = 14.8 x Weight (kg’s) +487

30-59years BMR = 8.3 x Weight (kg’s) +846

This will give us our daily calorie amount for our age and weight but we still need to consider our activity level so include a multiplier dependent on your activity level:

BMR x 1.4 inactive men and women (this applies to most people in the UK)

BMR x 1.6 moderately active women

BMR x 1.7 moderately active men

BMR x 1.8 very active women

BMR x 1.9 very active men

(Inactive = dormant life, little exercise / moderately active = active lifestyle, some exercise / very active = active lifestyle, exercise more than 3x per week)

So this will give you a final figure for your calorie requirements per day, just to stay alive. I will use myself as an example, being a 29 year old very active male weighing 82kg:

My personal BMR is calculated as follows:

15.1 x 82kg + 692 = 1930 k/cal per day

1930 x 1.9 = 3667 k/cal per day

Reference: Dietary Reference values for Food, Energy and nutrients for the United Kingdom. HMSO (1991). Thomas B and Bishop J. (2007) Manual of Dietetic Practice, Fourth Edition; Blackwell Publishing.

From this amount, roughly 30% should come from fats (11% from saturated fats, the rest from unsaturated), 15% from protein and 55% from carbohydrates. These are generalised figures based on healthy eating guidelines which will suffice most of the population however naturally there will be slight variants for specific people. I will blog about the importance of food ‘quality’ in future articles but for now, this guidance will help you hugely with your weight management goals.

Armed with this figure, we can now move to step 2 and plan how we can produce a calorie deficit.

STEP 2 – Keep a close eye on your calorie intake

The food industry has come on leaps and bounds over recent years and now it has even become a legal requirement to provide certain nutritional information on food packaging and in turn making our lives easier to keep track of our intake of calories.

It is now much easier to collect calorific content information in the food we eat

It is now much easier to collect calorific content information in the food we eat

Now don’t get me wrong, there is a little bit of hard work involved here but if you are determined to lose weight then it will be a worthy exercise to do. The great thing is that we have the internet to help us with working out the calorie amount for anything we eat. A simple Google search will provide you with this information within seconds for almost every food we eat.

As an example, for lunch I have an egg and cress sandwich which will contribute 324 calories to my daily amount. This information was provided on the front of the packaging. Easy. In time, you will get a better understanding of what foods contain what calories. I don’t spend all day looking at food labels, it is just something I now do subconsciously.

Why is it so important to understand our daily calorie intake? Well it comes down to needing to produce a calorie deficit (difference between energy in verses energy out). A person needs to have a daily calorie deficit of around 500 k/cal or a weekly reduction of 3500 k/cal to lose 0.5kg of fat per week or roughly 2kg per month. That’s a loss of 1 stone in just over 3 months! This can absolutely be achieved by doing 2 key things:

1. Keep just under our BMR figure (not going on a fad diet)

2. Exercising (see point 3 below).

Between the 2 elements, you will be looking to create a daily calorie deficit of 500 k/calories. This can be any combination but the ideal scenario would be 50% / 50% whereby you eat 250 less k/cals and then burn 250 k/cals through exercise. This way you don’t have to starve yourself or go crazy at the gym. It is much easier to adhere to and thus, sustainable.

STEP 3 – Plan some weekly exercise to ensure you create the deficit

Exercise, as I mentioned in last week’s fitness blog, doesn’t have to be long and arduous for you to get results. You just need to do it regularly and give it your all when you do it. Exercise fires up the body and naturally this causes a spike in calorie burning as the body uses the energy to perform the exercise. I have already introduced the concept of Tabata cycling (4 minute workout) which will be one form of exercise which can push you towards your calorie deficit goals and I will be blogging about many more going forward. Each which can quite comfortably help you burn 250 + calories.

There are some fantastic calorie counters on gym machine equipment and some mobile versions that you can carry on you to track calorie expenditure throughout your day. One that comes highly recommended if you want to professionally track your calorie expenditure, plus a number of other cool features , is the Nike Fitbit Amazon.co.uk Widgets

This morning, I completed a 12 minute cooper run on the treadmill (with a 2 minute warm up and 2min cool down). Here I was able to observe my calorie expenditure on the dashboard and I hit just over 300 calories. Not bad for 16 minutes exercise and the great thing now is that I will continue to burn a good deal more calories throughout the day as the ‘after burn effect’ kicks in. I now don’t need to starve myself to the point of insanity. Instead I will fuel my body with the correct amount of nutritious, balanced food to ensure I have the energy to make the very best of the day ahead (more information on power foods in future blogs).

SUMMARY

Weight management / fat loss is something that I get asked about all the time. It has to be the single biggest desire/goal for 90% of the people I talk to and work with. The internet is littered with magic formulas for weight loss but for me they all come with a price, they simply cannot be sustained. The real magic formula is simply keeping tabs of energy in and energy out, eating is an important part of weight management so long as the food is nutritious, controlled and combined with regular exercise. So start putting this into action because without action we won’t get results. Workout your daily calorie requirement, take note of the calories you intake and then plan some regular exercise to ensure you produce that deficit. A few dedicated and consistent months and you will really start to see and feel the positive effects.

I am more than happy to answer any questions you may have, just post them at the bottom of the article and I will do my best to respond within 24hours.

Best wishes

Tom

P.S. I do appreciate that holiday season is here and creating this deficit is going to be a challenge, but even with our Christmas excesses, the information in this blog can help us reduce the impact so that come January it is a much quicker process for us to get back to our very best. I certainly am one who can’t turn down the odd mince pie 🙂