Sell Indices before the rally? Previous trade update...

Whilst I am bullish on Global Stock Indices in the medium to long term, most indexes have put in decent reversal patterns which suggests a short term bearish bias. When the US finally sort out the fiscal cliff, which they have to, then the market could be in for a strong rally. Until that point the market has been rallying on low trading volumes, as the ATR levels are near historic lows during previous peaks.

How then would you position yourself? Well trading is all about having a view based on what you see on the charts. Then it's about executing that view in a risk managed way. Whilst I could be wrong on my analysis, as may be the case with AUDCAD - the news of another rate cut from the RBA was taken positively from the market, it's all about reward to risk at the end of the day. Therefore, on the majority of these short positions I will be risking less than my usual stake and then position my full stake on the rally, if it comes along.

This is how I position myself in the markets. How about you? Do you have a thought out structure and plan everytime you sit down to trade? If you don't, you need to. After all, this is a business and if you fail to prepare, you prepare to fail.

Charts: DAX, FTSE, DJIA - remember this is just the selection criteria. Execution of the trade depends on your strategy, risk rules and time frames to trade and whether we get the right signal to take action!