It was great to meet some Market Maven and What Really Profits readers at the Roxanne Cross seminar on Friday. Someone said that it’s nice to be able to put a face to the name and it’s the same for me.
It was a fascinating day and I’m looking forward to keeping up to speed with everyone’s progress and attending some of the online seminars over the next few weeks.
Well it’s Tuesday, I’m penning the Market Maven alert and would you believe it… The FTSE is down around 1%. (NB it’s recovered a fair bit as I send this off to go out). I wondered if it was just me imagining things, or whether Tuesday really has been such a dire day recently.
I opened up my trusty excel spreadsheet and got the historical FTSE data from Yahoo.
Incidentally, Yahoo is a great free resource for historical FTSE end of day data. Go to
http://uk.finance.yahoo.com, click on the FTSE then historical prices and you can download decades worth of data from each day such as the high, low, close and open of every day.
Applying a nifty little formula I figured out entirely by myself (not pestering my more able techie friends to do it for me, no, not at all). I found out that low and behold, in 2008, Tuesday hasn’t been the worst day of the week.
Had you bought at the open and sold at the close every day of the week this year, you would be up or down as follows:
2008
Monday: -7.46%
Tuesday: +5.02%
Wednesday: -4.19%
Thursday: -5.59%
Friday: -8.27%
Hmm that’s the opposite of what I thought it would be. Tuesday has been the best day so far in 2008. I’m not going completely mad though. Over the last two months (June and July), Tuesday has indeed been the worst day of the week.
Last two months:
Monday: +3.52%
Tuesday: -6.51%
Wednesday: +2.62%
Thursday: -2.12%
Friday: -4.91%
Use historical FTSE data to determine on which days of the week trading should be avoided
According to the Stock Traders Almanac, the worst day on the FTSE is Monday with an average change of -0.024%. Friday is the best with an average change of 0.089%. This includes data going back to 1984.
It’s probably just a quirk and entirely a random thing. However, it is interesting to note the under performance of Friday this year.
I guess there’s no small amount of fear involved there, with traders selling into the weekend, not wanting to have any large positions exposed to the weekend newsflow which they cant do anything about. Recently we’ve had news about Fredddie Mac, Fannie Mae and other US banks going to the wall announced over a weekend. It’s
understandable that traders don’t want to have to worry about what surprises and Saturday or Sunday might bring when the trading week is bad enough!
System watch
I’m still getting lots of questions about ConceptFX, boy oh boy, these guys must have done a lot of marketing. At £5,000 a pop, they only need to sell a few copies to make a mint.
If you missed what I said last week, let me know and I’ll forward my full comments. In short, I have a lot of questions about the whole thing that I’m yet to have answers on. I’d steer clear for the moment.
I’ve also had some questions about www.forex-killer.com, which is an interesting
one.
It’s supposedly a piece of automated trading software that will make you hundreds of thousands of dollars trading the Forex markets. The website is extremely slick with lots of video testimonials and even a video of “Andy” who welcomes you to his website and finishes off with “I trade forex for a living”. Under his photo we’ve a copy of his signature for Andreas Kirchberger. We’re led to assume that it’s his website that the video is of the website owner explaining his product.
However…
If you click on the link next to the video, you’re taken to Live Face on the Web
(https://www.livefaceonweb.com). This is a slick website where you can hire actors to represent your website. We can find “Andy” on the main page and when we click on the list of male models you find out that Andy is actually Robin Greg, one of the available actors.
Nothing wrong with that per se, but the marketing copy does lead us to believe that the guy in the video is Andy. We’re told that Andrew Kirchberger used to work for Deutsche Bank as a Forex advisor. To be honest it’s hard to know if Andy Kirchberger exists at all.
There is a screen shot of a Swiss Bank account which proves nothing other than the fact that someone has lots of money in a Swiss Bank account, which could be from marketing the product or nothing at all to do with trading.
There’s also similarities with www.roulettekiller.com which is registered to the same place in Westchster, USA and has the same annoying pop up when you try to leave the site.
It’s all very similar to the www.forexautopilot.com website which also has “Marcus” pop up and tell us about his robots that make loans of money for him. Guess what? Yep, he’s also an actor and guess where the website is registered to? Yep, Weschester USA!
I’ve also heard reports of people getting sales calls from another outfit after purchasing Forex Killer, as seems to happen with Forex Auto Pilot.
Gotta hand it to them, there’s some seriously slick marketing going on, but you’d be well advised to steer clear.
I had an email from a Market Maven member last week about Forex Auto Pilot. Apparently there’s a user forum set up where people discuss the fact that it does not work as sold. There’s one guy who says he’s set up a dynamic hedging add on, but guess what? Yep you’ve got to pay him for the privilege.
I’m just planning this month’s What Really Profits and am looking to do an update of some of the systems I previously reviewed. Looking forward to it already and highlighting the good guys.
Thanks to all of you who asked to become system testers for the new FTSE system we’re trialling. I was overwhelmed by the response and had to turn some people away. The testers are currently beavering away and I’ll report back ASAP.
My trades
A better week for TUFXP as Forex markets seem to be behaving themselves. The daily markets are a bit more volatile. I lost a total of 150 pips on my USD/ CAD & EUR/ GBP trades but managed to lock in a fantastic 283 pips on cable. My EUR/ CHF trade is currently +50. This is all based on TheWizard.com. I’m still short the SPY ETF that tracks the S&P 500 cash market and opened a short trade using futures from 1250 on Monday. My stop is at break even. I think I’ll let this one run and close on Thursday before the jobs numbers.
This week’s hot trading buttons
The week’s first economic announcement of note is the US consumer Confidence Index at 3.00 this afternoon. As has been the case with many announcements recently, it will be a question of how bad the figures are rather than how good. Wednesday brings US ADP Nonfarm Employment Change figures, followed by US GDP numbers on Thursday. The First Friday of the new month is always the heaviest with the arrival of US Non Farm Payroll figures. I’ll be closing all trades before than announcement.
Trading wisdom
Buffett has several excellent investing rules. You can read about many of them in his company’s (Berkshire Hathaway) annual reports, which are an excellent source of investing knowledge.
Here are three of Buffett’s rules:
Rule No.1: Never lose money.
Rule No.2: Never forget rule No.1.
If you lose money on an investment, it will take a much greater return to just break even, let alone make additional money. Minimize your losses by finding quality companies that are temporarily selling at discounted prices. Then follow good capital management principles and maintain your trailing stops. Also, sitting on a losing trade uses up time, money and mental capital. If you find yourself in this situation, it is time to move on.
2. The stock market is designed to transfer money from the active to the patient.
The best returns come from those who wait for the best opportunity to show itself before making a commitment. Those who chase the current hot stock usually end up losing more than they gain. Remain active in your analysis, look for quality companies at discounted prices and be patient waiting for them to reach their discounted price before buying.
3. The most important quality for an investor is temperament, not intellect.
You need a temperament that neither derives great pleasure from being with the crowd or against it. Independent thinking and having confidence in what you believe is much more important than being the smartest person in the market. Most of the time, the best opportunities are found when everyone else has given up on the stock market. Over-confidence and emotion are the enemies of a high quality portfolio.
