Sunday 18 January 2009

FTSE100 - Speculative trade


The recent structure of the FTSE 100 lends itself to an opportunistic trade idea. I would suggest buying inbetween 3734.07 and 3665.21 with a target back up at 4530.73. Your stop needs to be placed at a level that is consistent with your own risk tolerance. For a minimum 2:1 profit to loss ratio a stop under 3232.45 is appropriate for entry around 3665.21. In the case of an entry at 3734.07 stops should be under 3335.74.

Alternatively barring a false break under 3665.21, a push lower could be viewed as very bearish, so a tight stop could be employed. That is an individual trade decision. Personally I would allow for a small false break lower.

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