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CFD: Ideas You Can Trade- UK100 Medium Term Bounce Fading

Posted by Steven Hatzakis on Aug 12, 2014 2:33:00 AM

UK100:  Recovery from 6,530 Area Facing Bearish Resistance

The short term daily candle chart below shows the price history of the UK100 contract for difference (CFD) trading near 6,627.0 around time of publication today.

The underlying index (FTSE 100) this CFD aims to track had just found support days earlier on a medium term bullish line, and has since attempted to recover from the bearish momentum of the last few weeks.

However bearish resistance still remains a barrier for further upside in the very short term, and thus UK100 appears to remain bearish unless that upper resistance line can be overcome.

Considering that current prices are already testing that upper line (magenta colored trend line on chart below), an upside breakout is within close range, whereas if that line fails a bearish continuation may follow. While this is the first time the UK100 has been reviewed in this series, recently a similar regional index offered by WWM was reviewed, in the Ideas You Can Trade series.

Below are examples of how to trade a bearish continuation or a bullish reversal:

1.  BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 6,648.0 with a Limit to take profit @ 6,698.0 and a stop-loss @ 6,611.0 Risk/Reward Summary: Limit risk = +50.0 points profit / (-37.0) Stop-loss risk = Gain to Loss ratio = 1.35

2.  BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 6,606.0 with a Limit to take profit @ 6,567.00 and a stop-loss @ 6,631.0 Risk/Reward Summary: Limit risk = +39.0 points profit / (-25.0) Stop-loss risk = Gain to Loss Ratio = 1.56

 

Short term chart (daily candles):

uk100daily 8 12 2014 note

 

A note on CFD’s: A Contract for Difference, or CFD,is a financial contract allowing traders to potentially profit whether markets move up or down and include risk of loss. CFDs are cash-settled based on the difference in the value of an underlying asset from the time a trade is opened to the time the position is closed. A list of available CFDs that can be traded with WorldWideMarkets.com (WWM) can be found on the WWM website.

In addition to CFDs, WWM - through a third-party - offers direct access to non-US residents to trade exchange trade equities on the US Stock Markets, with more information also available via the WWM homepage.

 

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