Low Volatility Gives OpenBook Trend Traders an Advantage
(eToro Blog) A slow grinding US market environment is allowing Openbook trend traders to rack up the gains especially for those who are bullish. Petra09, who now has a solid three month track record that shows more than 100% returns, continues to slay the market by going long. During the week this trader closed out three Dow Industrial long positions for more than 10% each and has also been trading the German DAX, from the long side, which has led to gains on more than 75% of initiated positions.
Drangie, a trader from Spain has had less success in this trending market, taking positions from both the long and short side of the market. This trader seems to focus on the S&P 500 index with more than 85% of her positions making up her portfolio. During the past week, Drangie scalped the market from the long side, with a few trades that showed gains of approximately 4%. This technique has resulted in more wins than losses as more than 90% of this trader’s transactions result in profit.
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Economic data in the US continued to drive the markets but the data was mixed to the surprise of many investors. While GDP data for the 4th quarter was revised upward to 3% from the originally reported 2.8%, the ISM manufacturing data released on Thursday was weaker than expected. The institute of Supply Management reported that their manufacturing index declined to 52.5, compared to the 54 expected by economists. Weak manufacturing is less of an issue for the US economy as long as the service sector continues to expand at its current pace.
Fortunately for the US markets, the retail sector continues to help buoy the broader indexes. Many retailers including Gap and Target, reported much better than expected same store comparisons, reflecting strong consumer demand during the month of February.
As the Dow and Nasdaq approach 13,000 and 3,000 respectively, look for trend traders like Petra09, to continue to outperform.
Copyright 2012 eToro BlogNote: Past performance is not an indication of future results. This post is not investment advice. CFD trading bears risk to your capital.