Gosh, that was an interesting week then, with all sorts of records tumbling - or on the cusp thereof! $100 a barrel oil, gold nudging $850 per ounce, General Motors losing $39bn, Britons sending 1.2bn text messages a week, UK Plc posting its worst trade deficit since records began over 300 years ago, Tony Blair being paid (I nearly said "earning" but that would have been somewhat inaccurate) £80,000 an hour, the Darling chancellor saying something sensible...........Williams has most definitely been spoilt for choice this weekend as regards finding the odd cynical remark with which to spice up these ramblings. Where to start? How about with Tony, who's clearly skiving from his day job sorting out the Middle East and trying to put a shilling or two away on the side for his old age? It seems he was paid $500000 (about £240000) for giving a three hour speech somewhere in China the other day - but his hosts apparently were left more than a little unimpressed by its alleged "lack of substance". They wanted SUBSTANCE so they invited TONY? Ho ho ho.

And I just loved the comment from General Motors' chief financial officer when their $39bn loss was announced: "We're running below trend..." That depends on how you define the trend, sir!

The Darling chancellor's "sensible remarks" alluded to above were "We are entering a period of unparalleled financial uncertainty...." He was requesting banks to come clean about their level of toxic waste fallout. (Note to WICS newbies - type "toxic waste" into the search engine for some background) His difficulty of course is that he's asking banks to be honest - and even if that culture change were possible, they can't answer accurately anyway for the very simple reason that banks themselves currently have no idea just how badly they have been contaminated. You might care to examine the FTSE350 "Banks" index (NMX83) to get a little perspective - it's below, to save you having to look for it.

Next, I loved the way Northern Crock's boss attacked the Bank of England during the week - seemingly that particular train wreck was all the Old Lady's fault. Hmm. P45 time - long past it in fact. And on the same topic, the Citigroup big boss got his P45 equivalent last weekend, as predicted - but he's only going to get a measly $40m or so in payoffs, the poor chap. How will he pay for his golf club subscriptions? (Mind you, he's also getting an office, a secretary, and a car....oh yes, and a driver - for five years! I just don't know how he's going to manage.) Actually, it would come as no surprise if in due course some of these ex - execs are facing Federal indictments - I'll say no more about that for the moment other than to mention the fact that one of them may have made nearly $2m from buying "put" options in his (ex) company's stock.......anyway, we'll see.

Moving along, I note that Mattel is on its fifth recall of Chinese - made toys. They must be getting good at doing it by now, with all that practice. And I see that Marks & Sparks is going to open stores in India and China. Short memories guys - remember what happened to you in the USA and France! In any event (and anent the earlier mentions of $100 oil and $850 gold) your timing is lousy, because we're in the early stages of a major worldwide deflationary recession that will set India and China back for many years - $50 oil and $450 gold would be the Williams prediction over the next five or so years - and maybe a lot sooner than that. Contrarian? Moi? We shall see.

Mind you, I doubt if "deflation" will come to the UK passport/ID card offices - seemingly the £100 cost that is being bandied about meantime is "likely to change" according to government sources, because "the tendering process has just begun". A bit like the Olympics estimates "changing" methinks then.

Oh yes - before we move on to discussing a chart or two - "credit card wars" have returned to a bank near you! You would have thought lenders might have become just the merest tad more cautious - and that maybe borrowers too would be reining in their spending plans a wee bit - but no - "Get your Cashback Card now! Transfer your balances right away and get your cashback bonus in time to spend it for Christmas!" Or words to that effect. People just never learn.

Anyway, on to matters TTEW and first an email from one of you that reflects the thinking of many would - be successful traders, and my response thereto:

Subject: stop loss placement

"hi Ian,

I've two nice short trades running, namely Johnston Press and Savills. I'm using a 25/45 dma for each. Because both shares have dropped quite sharply there is quite a gap between the closing price and the ma (46 and 35 respectively). Would you stick fast to your method, or would you decrease the the stop loss? I can't lose on either trade, but I don't want to give too much back either! Regards, Robert."

And my reply:

"Robert, if you have been reading the last few issues of WICS, I suspect you already know my answer! I cannot stress strongly enough that IF 'your' chosen way of managing a trade is to use the TTEW methodology - ie via a specific DMA, then why on earth would you want to deviate from that? The only time that TTEW deviates from the DMA as far as SL positions are concerned, is when a windfall has occurred. (Type 'windfall' into the WICS search engine for more - and there are some references too in the video updates). As I suggest in WICS & videos, if you are unwilling to hand back some (& sometimes all) paper profit in a trade, you won't succeed as a trader. Ian."

From a "technical" viewpoint, what would you say is the most important thing to learn as a trader? Being able to identify support and resistance? Spotting channels or triangles? Drawing trendlines? How about "Being able to ignore paper profits"? Sure, I realise that's NOT actually a "technical" thing - but I just want you to stop and reflect on what is or isn't important to trading success. I would put it to you that the support, resistance, channels, triangles etc stuff is easy - peasy, with a bit of help from yours truly (if you need it). It's the OTHER stuff - the "mindset" stuff - that determines who will succeed and who will fail at this game. I cannot stress enough the very simple fact that you MUST be able to watch paper profits melt away without giving that a second thought, in order to succeed as a trader. But I do realise of course that nothing is EASIER than that to say, and HARDER to achieve! How can I know that? Could it be that Williams too has been through the mill with it all? You bet!

Anyway, let's have a wee look at a chart or two, and we'll begin with the FTSE350 Banking index mentioned above. These indices can be traded, but be aware that not all spread bet companies offer them, and that even those that do, can often charge pretty hefty spreads and may well require quite a bit of margin deposit too. If you want to find out more, please shop around - that's part of YOUR job, not mine! Then we'll look at Woolworths to see why a 'sell' might not have been such a great idea despite a pretty clear break of support at the end of March this year - just to make you aware that even charts can deceive! Finally we'll examine a couple of timescales on the Psion chart, to highlight the fact that when doing your research, it's always worth looking at more than one timescale - and perhaps also to point out that sometimes shareholders can have a mighty long wait before they see much of a profit from their "investment"!

That's all for this weekend, so happy trading until the next time. All the best,

Ian.

'IMPORTANT NOTICE: These WICS charts are for EDUCATIONAL PURPOSES ONLY. They represent only MY understanding of what is happening in the market for any particular share, stock, commodity or index. In NO circumstances should they be construed as recommendations to trade. If I choose to trade what I see, that is MY decision. YOU must, in turn, come to YOUR OWN conclusions about what action, if any, YOU might choose to take'.