Trading the UK FTSE 100 Index Contract-for-Difference (CFD)

I’ve been researching ways on how to trade London’s FTSE 100 Index.

What I like the most about the FTSE 100 is that the profits derived are in Great Britain Pound (that goes to losses as well!). Also, trading hours for the London market is also pretty convenient for me.

I managed to draw up a plan last week to make this venture a successful one.

This time, I shall be day trading the FTSE 100 through Contract-for-Difference (CFD). My trading hours will be from 6.00 PM till 2.30 AM. No positions will be held overnight.

By the way, day trading simply means your trades will strictly be carried out during the market hours on that particular day. Trades will be entered on that day and exited right before the market closes. As I’ve said above, no positions will be held overnight.

To day trade the FTSE 100, I’ll be utilising the 5-minute candlestick charts with one technical indicator. Entry and exit signals will be based upon that particular technical indicator only. Which technical indicator am I using? Haha, make me an offer and I might consider telling you!

Stop loss will also be placed as a safety net, just in case the index gaps in the wrong direction for no reason.

With my method, I’ll be holding positions throughout the trading hours. As such, the market needs to have some significant movements in the session to actually make me some dough. If the market moves sideways in a tight range, then I might have a bit of a problem 😛

Another potential problem that I face is the trading hours. Trading continuously from 6.00 PM till 2.30 AM might prove to be a tad difficult. My chosen method also requires me to monitor the tick charts pretty closely. It is important to be able to pull the trigger swiftly. Anyway, we’ll see how it goes.

I’ve had a look at 3 months worth of historical information (3 months worth of back-testing) and the results were pretty satisfactory.

For now, I’ll only be paper trading the FTSE 100 index based on my method for a little while. I’ll then proceed to trade small number of contracts. After I’m comfortable with the method, then only I’ll start trading using standard contracts.

I’ll be sharing my paper trading results with my readers.

P.S. The method that I use is not a BIG SECRET or anything. I’m just using a typical technical indicator available in most charting softwares. And nope, it’s not moving averages 😛

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Disclaimer: This article is not a specific nor general advice on managing or investing your money. This article does not constitute a recommendation nor does it take into account your investment objectives, financial situation nor particular needs.

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Other related posts:

CFD Trading : An Introduction
CFD Trading/Share Trading : Setting Stop Loss
CFD Trading/Share Trading : Stop Loss in Perspective
CFD Trading/Share Trading : Being Long and Short (Concept of Short Selling)
CFD Trading/Share Trading : Short Selling in Perspective
CFD Trading/Share Trading : The 2% Rule
CFD Trading: What can be traded with CFD

About nadlique

This blog is about the journey of a 28-year-old Malaysian towards financial freedom. This blog was started back when the blogger was 21 years old. However, his journey towards financial freedom had begun way before that. Materials such as investing, business, entrepreneurship, equities, and real estate are presented. The author also posts his thoughts and observations on life in general.

Comments

  1. Cheers Mate, how´s your performance so far? Really like your page.

    I trade (or traded, as i am pausing right now) the FTSE too, very succesfull for quite a while but actually lost all my profit! 🙁

    So i wanted to ask you, with which paper trading plattform you are trading? I am looking for a good free paper trading plattform.

    What i used to trade was the first big reversal of the day, that has really massive profits in it. How i knew how to say when the big reversals where coming? Well, i can tell you….if you want to know it. The thing is – it worked in 70 Percent and had a risk/reward ratio from 1:1 to 1:20 (or more possible).

    The only thing, my only problem is/was — i can´t cope with losses. Maybe as well betted too big positions too soon. When i lost, what didn´t happen often, i HAD to get my money back and then bet even bigger amounts, if that didn´t work too (murphy´s law somehow) i bet even bigger positions – that´s how i lost my money with a method that actually works.

    First, i looked at the market for about a year (the FTSE only, but not paper trading), found my strategie ant then started trading

    In my first 1 Month i raised my account to over 500 % –> then lost my money in just one day (oh my god…)

    In my second month it happened just the same…both. Sh***

    In the last month it happened again, but with smaller test-positions. Almost constant winning and loosing everything in no time. :-(((

    Stupid, isn´t it? Absolutely…imagine how i feel. I think i am too much of a gambler for trading, actually.

    Give me an email if you are interested in knowing how it worked…maybe we can get our interests together? Maybe you can handle this all better than i can, because you seem to be a lot cooler and more well-balanced person than i am…maybe we can combine our interests.

    Cheers,
    Barny

    P.s. –> I am a private person, gentleman by heart and don´t have any interests in getting your strategy out from you…take my word. The other way, i want to give you mine – for it seems i simply am not stable or humble enough for this game called trading…

  2. Hi Barny!

    I guess that’s why they say, rules of entry and exit are important. Though not as important as how one manages his/her emotions. Mastering psychology is key.

    Anyway, e-mail me through here>> http://www.nadlique.com/contact-me/

    Cheers!

  3. Thanks for sharing your thoughts with us. I appreciate the time and effort you went to in order to provide valuable information, rather than much of the junk I have seen around the ‘net.
    Kind regards,
    Barry

  4. Good touch, im interested to know how much of the 9 years is up so far? be good to get aliitle time count down and money ticker going on here.

  5. If you look at the navigation panel beside where the latest post is located, then you’ll see that it has been around 1 year 4 months. With regards to money ticker, I’m not actually that comfortable to share with my readers how much I’m worth at the moment 🙂

  6. Hi Nad,

    how is the trading going?

    FF

  7. Day trading is a little too strenuous for me after all. Can’t seem to find the time to fit day trading in my hectic schedule. I now hold positions for a few days at a time.

    I might try again in the future though.

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