February 14th

Results

European News

European stocks finished mostly higher on Monday, as Credit Suisse Group AG rose after the Swiss bank entered a deal to strengthen its capital, while Nokia Corp. shares dropped again. The Stoxx Europe 600 index (ST:STOXX600 289.11, +1.12, +0.39%) rose 0.4% to end at 289.11.

Pacing the major regional benchmarks, Germany’s DAX 30 index(DX:DAX 7,397, +25.43, +0.35%) gained 0.3% to 7,396.63, helped along by a 2.5% advance for BASF SE (DE:BAS 59.49, +1.21, +2.08%). Citigroup named the chemicals company as one of its most preferred stocks in Europe.

Bailout Fund Announced

Finance ministers from the 17 countries that use the euro agreed on the size of a permanent bailout fund Monday. However, additional details were put off until leaders reach a compromise on deeper economic reforms.

The Eurogroup announced an effective lending capacity of 500 billion euros ($677 billion) for the economic area’s future permanent bailout fund, the European Stability Mechanism. The International Monetary Fund may contribute an additional 250 billion euros. On top of that, European Union member states outside of the euro area may also contribute.

As for my DAX30 trades today, I was attempting to use an ancient method that almost everyone has heard of (buy low sell high), unfortunately whenever I bought, price kept retracing a little lower. Now here is a small maths problem, I can either choose to stick with my position, and wait it out until I am break-even and then in profit. Or I can close the position for a small loss and re-enter at a lower price hence recovering my losses.

Let me give you an example, I bought it at 7399 at first and will take profit when it breaks the daily high of 7422, that is a profit of £92 if I held the position and not sold.

I am now holding it at 7392, taking profit at 7422, a profit of what will be £135 (instead of £120 due to increasing the volume to 4.50).

Taking away the -£50 loss and second attempt of -£22.80, it is a profit of £62.20. My trade had to be at 7385 (37 points x £4.50 = £166.50(£166.50-£72.80) = £93.70) for my method to be proven successful.

Red arrow shows the first failed attempt, white arrow shows the trade I am in at the moment. The number 3 shows where I should have bought, however that opportunity presented itself 5 hours later! I have no way of knowing how low a price will go during a retracement when there is no bad news for this index.

News To Look Out For Tomorrow:


7:00am German Prelim GDP figures
2:00pm USA TIC Long-Term Purchases