- Upcoming speaking event in Sydney
- A current market update
- How to trade CFDs with $8 commission, plus other discounts and inclusions
- Continued on from last month's newsletter - an update on a recent trade
| Upcoming Events |
My next event is scheduled for Sydney. The final details are below and you are invited to come along and hear me speak. I will be presenting on The Power of Trading CFDs.
During the presentation I will be covering why CFDs are becoming increasingly popular and the benefits of trading CFDs over stocks.
Event: Australian Technical Analysis Association (ATAA) monthly meeting
Date: Monday, 18 May 2009
Venue: The Auditorium, Level 1, The Bowlers Club of NSW, 95 York Street Sydney
Time: Meeting commences at 5.15pm am and finishes at 7.30pm. I will be speaking for an hour from 6.15pm.
Cost: Visitors can attend the ATAA meeting once for free. There after to attend again there is a once off fee of $30 per meeting or you can join the ATAA. For more information on the ATAA you can visit their website: www.ataa.com.au.
For first time visitors you will be required to fill in a form and present this when you arrive. To make this process quicker you can download this form off my website by clicking here to go to the Seminars Web Page.
| Market Update |
The market has had a strong upward reversal over the last month moving back into its trading range. As you can see from the daily chart below.
Daily chart of the ASX 200 as at 8 April 2009
For those that did have short positions open, like myself, you would have had most of your stops hit during the recent rise and you may have built into some long trades and enjoyed the fast reversal that occurred.
The question now is, is there more upside to come? Or is the market now developing a basing pattern? The market will need some form of base before it can become healthy. This is where the market now catches its breath before it can possibly move higher. There is a major resistance line developed at the 3800 mark in the ASX 200, which is evident in the above daily chart.
For those of you that have completed my Smart Technical Analysis Home Study Course you would be looking at a weekly chart to determine the current market stage of the share and understand where it is going. Below is this weekly chart with the 30 week exponential moving average (EMA) included.
Weekly chart of the ASX 200 as at 8 April 2009
As you can see from this above chart the EMA line is still falling and the share price is below it. Whilst it recently made a lower low, it has now made an equal high from its last high, which could signify a basing pattern, but it has not moved above its 30 week EMA which it would need to do next to base or to start trending upwards. So time will tell if this downtrend will continue or the market is starting its base.
| Special CFD Offer |
CFDs are becoming increasingly popular because they offer many benefits that the stock market does not, such as guaranteed stop loss orders, leverage, ability to easily short sell and access to a large range of global markets and trading instruments, ranging from share CFDs, indices to commodities and foreign exchange.
As most of you are aware, the provider I use for CFD trading is CMC Markets. I have negotiated a special deal with CMC, which I can now discuss due to my authorised representation. This deal is available to you when you open a new account and mention Smart Trading. These benefits are exclusive and include the following reductions and special features on ASX share CFD trading:
- Reduced commission of 0.08% (standard commission is 0.10%)
- A reduction of 0.25% on the overnight financing rate
- Availability of Market Trigger Orders (stop entry orders) – I love these orders and use them regularly now. You can see how I used one on an actual trade later in this email
- Free movement of Guaranteed Stop Loss Orders (GSLOs) – a huge bonus that guarantees all your stop loss orders at the price you set and you can change them as the trade moves your way at no cost
| Update on the Progression of my Trade |
I have now exited the CFD trade I shared with you in last month’s newsletter and can now disclose the share name. The share was Bendigo & Adelaide Bank (BEN).
Daily chart of BEN with my trade marked out
I short sold a CFD on this share on 17 February at $8.88. My trading system had started to give me signals on this share in January, but it had very strong support from the past at $9, which it had touched many times throughout 2008 and in the past in 2005. I knew that if the share broke this price level I wanted to get in and short sell it. So I set a market trigger order to sell the share at $8.88 with my CMC Markets CFD account and when it broke through this price level on 17 February I was entered into the trade at this price.
The share continued to fall heavily after I entered and I managed the trade with my trailing stop loss indicator, which I have coded into MetaStock and it is shown by the blue line in the above chart. This stop was set as a guaranteed stop and as the share made lower closes, I simply contacted CMC and moved the stop loss lower each time, which I can do at no extra cost as part of the Smart Trading set-up, which I discussed above.
The share then hit my guaranteed stop on 20 March when it broke above $7.04 and I was exited out at this price. I held this trade for a total of 31 days and made a return of 20%* on the total trade size and 383%* on the capital outlay, which was based on 5% margin.
I will share another active trade with you in the next newsletter.
| Smart CFD Trading Diary Special – 50% discount |
In October and November 2008 I kept a personal trading diary of all my trading activity for my Smart Traders Mastermind group. During this period I undertook a total of 18 CFD trades and increased my CFD trading account from $5k to $20k - that's a 300%* return in just 6 weeks.
This diary has been very popular and due to it being six months old I will soon be taking it off my website and it will only be available to those that purchase my Smart Trading Plan & System Development Course. Before I do, I am making the diary available at a 50% discount.
Previously $97, you can now purchase the diary for $49. The diary includes a wealth of information and goes through day by day what I do as part of my trading routine and how I make all my trading decisions. You get access to information on every trade that I opened during that period and how I managed each trade as they progressed.
This is what some of my Smart Traders Mastermind members had to say about it when I shared it with them last year:
"This is the best thing ever!! This really does get inside your thinking and show how discipline can lead to a calm trading process."
"This is a fantastic resource you have provided."
"It is really educational and thankyou for the great effort you have gone to."
Until next time, happy trading and hopefully I may meet up with you at the ATAA Sydney meeting on 18 May.
Cheerio
Justine Pollard
Author, Private Trader & Trading Mentor
'Discover the Smarter way to trade'
www.smarttrading.com.au
justine@smarttrading.com.au
Smart Trading Pty Ltd is a Corporate Authorised Representative of CDM Pacific Pty Ltd AFSL 223682
*The returns reported are provided for information purposes only. Results of past performance are no guarantee of future returns. No assurance is given that you will incur any profits or losses in your own trading and it should not be assumed that you will experience results comparable to those as reported. Any trade examples listed within this website or associated material are either ficticious or historical and in no way should be interpreted as a recommendation to invest in any particular stock, CFD or investment. Smart Trading Pty Ltd as Authorised Representative No.336312 of CDM Pacific Pty Ltd AFSL 223682 assumes no responsibility for your trading and investment decisions or subsequent results. There is a high degree of risk involved in trading and as such we always recommend that you seek independent financial advice by a licensed professional prior to making any investment decision.
