Boot's Trading

[bigbadboot]

Update (closing prices)

JMAT hit its stop, A new short trade was opened on PFC.

JMAT; Closed (stopped out); -£184.00

Open trades:-
LGEN; -£19.50
IHG; -£94.00
WPP; -£114.00
AV; £16.00
PRU; £28.20
PFC; -£20.90

More losses today! Some of these stocks look like they are about to fall off a cliff face. I think my entries were too early and need some sort of confirmation.
Anyway the results so far are:
Closed trades: -£932.80
Open trades: -£204.40
Total: -£1,137.20
Change on yesterday: -£204.70
At least it's consistent!

 

[bigbadboot]

Here's tomorrow's picks.

Longs:
Only one signal for Catlin, but the risk:reward doesn't look very appealing so I'll skip that one.

Shorts:
No FTSE100 stocks.
WEIR; entry below 329; stop 390; target 277
AHT; entry below 37.2; stop 42.8; target 28.9
RCP; entry below 901; stop 964; target 794
Some of these are fairly low cap stocks (FTSE250), but the trades on AHT and RCP look quite attractive. The spreads on these on etrade are 1% and 0.3% respectively.

 

[bigbadboot]

The position sizes for the above are:-
WEIR £3pp
AHT £35pp
RCP £3pp
I'll try and whack up a few charts in a bit, although I can't get prorealtime on the netbook I'm using.

 

[bigbadboot]

Here are the charts as promised. I've taken them off BigCharts: Stock Charts, Screeners, Interactive Charting and Research Tools
I've included some marking on them. The red line is the stop-loss level. I've placed this a half of the 14 day ATR above the high to give the trade a bit of breathing space.
The black line is the entry, simply the low of the day.
The green line is the initial target. Its not that rigid but useful to gauge the attractiveness of the trade.
In some of the charts I have included a garish turquoise line on the volume. You can see the falling volume with the rising prices suggesting the move is a pullback rather than a reversal.

 

[bigbadboot]

Sorry...here they are! Didn't realise I couldn't attach files on quick reply!

 

[bigbadboot]

Midmorning update:
2 new trades entered; Short AHT and RCP. Still waiting on WEIR.
No trades have been closed today.

Open trades:-
LGEN; 71.0; £52.00
IHG; 550.3; £6.00
WPP; 373.9; -£47.50
AV; 380.7; £118.50
PRU; 332.4; £122.70
PFC; 321.2; £118.80
AHT; 38.3; -£38.50
RCP; 913.6; -£37.80

Closed trades: -£932.80
Open trades: £294.20
Total: -£638.60

Not a bad morning so far. Recovering some of the losses from the beginning of the week.
If LGEN falls to 65.0 today I will close, otherwise I will close this trade on the close as it's been open since Monday.

 

[bigbadboot]

Update (closing prices)
All in all a pretty good day. Closed LGEN at 71.0 for £52.00 profit.
Open trades:-
IHG; 558.2; -£26.00
WPP; 365.9; -£7.50
AV; 377.0; £137.00
PRU: 348.4; £74.70
PFC; 338.4; -£70.40
AHT; 38.1; -£31.50
RCP; 921.1; -£60.30

Closed trades: -£880.80
Open trades: £16.00
Total: -£864.80
Change on yesterday +£272.40
A nice way to end the week, but still down due to the trades earlier in the week. I think this is mainly due to over-trading and not waiting for confirmation. Hopefully next week will produce some better results.

 

[rathcoole_exile]

..I was beginning to think no one was following my thread.

oh no ! we're watching

 

[rathcoole_exile]

Adam,
i noticed Jon's comment that he has a "stable" of 25 stocks (which is about the same size as his stable of fit, willing girls that he keeps at his mansion).
Do you limit yourself to such a selection or are you screening the entire FTSE 100 & 250 lists for suitable set-ups ?
in my humble opinion,( which I realise hasn't been requested, but I'm a gobby kunt who can't resist) you may find Jon's approach beneficial.
Pick say a dozen stocks to follow, get to know price action, levels etc, inside out so you can visualise them with your eyes shut.
Ok, it will reduce your trading "opportunities", but I truly believe it would improve your profitable strike rate %
Then later, add another 3or 4 stocks, then more later again until you're intimate with a couple of dozen, max.

sorry for interjecting on your journal ...
Garry

 

[bigbadboot]

Hi Garry

Thanks for your comments and your interest in my thread.

Yes I am (was) screening the entire FTSE350 using a screener I programmed on prorealtime. I agree with the stable idea (especially the bit about the fit, willing girls). I assume because I am screener for trending stocks only a handful of FTSE100 stocks are trending at any one time giving me a rotating stable of stocks that will continue to give signals until they stop trending. Actually as an exercise I will screen for stocks in the FTSE100 that I think are trending nicely and post a list later (I'm sure Jon would be very interested to see this too),

Another thing I will do is to limit the risk to 2% per day rather than 2% per trade (maybe unless I have a long and short trade on the same day then 2% either way would leave me fairly neutral).

I have stopped using bullbearings for my paper trading as I find the fills to be too generous (eg for a short position I will get filled way above the market giving unrealistic results, anyone else found this to be a problem?) I am now taking prices off etradespreadbetting. For simplicity I am ignoring financing costs in my results but using the bid-offer spread.

I will update later...have to go to the supermarket now.

Take care guys!

 

[PokerBrat]

Not wishing to intrude on your thread BBB, but I have a question for BarJon about his Xtrata chart.

There is a retracement between 20 and 25 that you don't identify as an entry and I was wondering why?

 

[bigbadboot]

Not wishing to intrude on your thread BBB, but I have a question for BarJon about his Xtrata chart.

There is a retracement between 20 and 25 that you don't identify as an entry and I was wondering why?

Hi PokerBrat!

More the merrier. Without answering Jon's question for him I think the reason he doesn't enter is because there are only 2 higher highs on the pullback. I think Jon waits for 3 or more before he will enter. I'm not sure though so it's better to wait for Jon to confirm this.

I'll be putting up a list of the stocks that I am awaiting signals in soon. Just going through a few charts first.

 

[bigbadboot]

Ok Here's the stable with comments. There are currently 8 and a half stocks in the FTSE100 that could generate signals. All shorts. I also found 4 stocks that may join my stable sometime in the future (need a bit more price action to confirm their trends)
The current stable:

RIO; I have a set-up for this one on Monday. Entry between 1400 and 1455, Stop at 1753 (clear of Thursday's high and above the high on the 25th Nov after the gap down). I'm going to set 2 price targets, the first will be a quick target to exit on the same day and a longer target. 1155 and 1020.

XTA; Also a set-up although not such a strong signal as RIO. Entry between 670-678, Stop 807 (same reasons as the RIO trade), Targets 573 and 537.

LMI; Similar situation to XTA. Entry below 660, Stop 783, Targets 555 and 537.

DRX; No signals at present. Ideally would like to see the price head to 575 for a possible short or make new lows and wait for the next pull-back.

III; No signals. Has been falling for last 2 weeks so just waiting for a pull-back for an entry.

LII; No signals. Has been falling since early Nov. Like III waiting for a pull-back for an entry.

SGC; Having a mini pull-back at present. Would like to see the price go a little higher (above 136) before considering a short.

PFC; Currently short.

HMSO; Borderline at the moment. If it breaks above 568 on decent volume closing the gap on 20th Nov I will remove it from the list. It's currently showing a fair bit of resistance around 545-550. If it breaks its recent low of 444 confirming the down-trend it may be worth getting in on a pull-back.

So there's the current squad. The 4 stocks waiting in the wings are TSCO a possible future short if it can make new lows. KGF, BGY and SL are all potential future long trades and I will be keeping an eye on them for any signals.

Any comments?

 

[barjon]

Not wishing to intrude on your thread BBB, but I have a question for BarJon about his Xtrata chart.

There is a retracement between 20 and 25 that you don't identify as an entry and I was wondering why?

hi pb

yes, bbb explained it - only 2 bars. It was a bit of a bugger 'cos i closed 3/4 of entire position (ie: including additions) on second bar and although I re-entered when a new low came it was only with a reduced amount.

good trading

jon

 

[barjon]

Ok Here's the stable with comments. There are currently 8 and a half stocks in the FTSE100 that could generate signals. All shorts. I also found 4 stocks that may join my stable sometime in the future (need a bit more price action to confirm their trends)
The current stable:

RIO; I have a set-up for this one on Monday. Entry between 1400 and 1455, Stop at 1753 (clear of Thursday's high and above the high on the 25th Nov after the gap down). I'm going to set 2 price targets, the first will be a quick target to exit on the same day and a longer target. 1155 and 1020.

XTA; Also a set-up although not such a strong signal as RIO. Entry between 670-678, Stop 807 (same reasons as the RIO trade), Targets 573 and 537.

LMI; Similar situation to XTA. Entry below 660, Stop 783, Targets 555 and 537.

DRX; No signals at present. Ideally would like to see the price head to 575 for a possible short or make new longs and wait for the next pull-back.

III; No signals. Has been falling for last 2 weeks so just waiting for a pull-back for an entry.

LII; No signals. Has been falling since early Nov. Like III waiting for a pull-back for an entry.

SGC; Having a mini pull-back at present. Would like to see the price go a little higher (above 136) before considering a short.

PFC; Currently short.

HMSO; Borderline at the moment. If it breaks above 568 on decent volume closing the gap on 20th Nov I will remove it from the list. It's currently showing a fair bit of resistance around 545-550. If it breaks its recent low of 444 confirming the down-trend it may be worth getting in on a pull-back.

So there's the current squad. The 4 stocks waiting in the wings are TSCO a possible future short if it can make new lows. KGF, BGY and SL are all potential future long trades and I will be keeping an eye on them for any signals.

Any comments?

bbb

RIO not in my stable - I'd be thinking short around 1450
XTA I'm busy scaling out, but there'd be a short signal around 675
LMI not in my stable - I'd be thinking short around 656
DRX not in my stable - I see it sideways and no trading 'til it clarifies
III I'm short from 400
LII not in my stable - I'd be nervous of this one, looks as if flattening out
SGC not in my stable -
PFC not in my stable - where's your stop, I forget.
HMSO not in my stable - another one flattening out?

I should note that I have FTSE in swing up-trend which means I favour longs with the shares and only take half positions for shorts.

good trading

jon

 

[bigbadboot]

Hi Jon.
Thanks for that. Very useful.
I was just wondering how often you change your stable of stocks, I mean what's the typical turnover of stocks that you are watching (I suppose this would depend largely on how the general market was trading, right?)
You mention you check the general market direction to bias your trades long or short, would you also examine the stock sectors too? (eg Financials, Mining, etc)
Adam

 

[rathcoole_exile]

because I am screener for trending stocks only a handful of FTSE100 stocks are trending at any one time giving me a rotating stable of stocks that will continue to give signals until they stop trending.

when i was trading stocks (via options Put writing) i concentrated on 8 to 10 US stocks. I got to know them so well, I can even remember levels etc from 2 years ago even though I haven't looked at them for probably 12 months. To me, that's the kind of instinctive, thorough knowledge you should aim for.

Now I have try to have the same sensitivity for price for ES, gold and oil.
trying to add in the Dax and FTSE but even that is stretching my ability to "know" my instrument inside out.


maybe I'm wrong and screening dozens works just as well or better ?
Jon's been at this longer than either of us, what do you reckon Jon ?

 

[barjon]

Hi Jon.
Thanks for that. Very useful.
I was just wondering how often you change your stable of stocks, I mean what's the typical turnover of stocks that you are watching (I suppose this would depend largely on how the general market was trading, right?)
You mention you check the general market direction to bias your trades long or short, would you also examine the stock sectors too? (eg Financials, Mining, etc)
Adam

adam

I have a hard core of 15 which never leave and which (as rathcoole so wisely says) I know like the back of my hand and which I'm prepared to trade "off 3 bar approach". The remainder come and go accordingly to whether or not they are moving reasonably smoothly in the context of the 3 bar approach (or looking like they will).

My filter is the general market direction - not sectors. I suppose you could say that I'm using it as a sentiment indicator.

To follow up on rathcoole's thoughts, one of the most successful traders I know traded just one share - Nat West (RBS). He knew it intimately, both from fundamental and technical standpoints. He had a longer term strategy where he established buy and sell zones patiently accumulating or distributing in each and supplemented it with a short term strategy which relied on his instinctive feel for the immediate price action rather than any particular set-up. I haven't seen him for ages so he might have lost the lot in the current RBS dizzy plunge from grace - but I doubt it.

good trading

jon

 

[PokerBrat]

Thanks for the response Jon. I like your strategy of scaling out on the retrace in the knowledge that you will be entering again at a better price if it turns out to be a swing rather than a reversal. But obviously you do miss opportunities such as this, but trading in hingsight is easily done.

BBB - I was going to point out to you pretty much what Jon has said, I see the indices as trying to put a bottom in place, with plenty of support levels to break through on the downside, so I would be careful about taking short positions at the moment. Especially, as you seem to be using fairly big stops with low risk/reward ratios.

 

[bigbadboot]

Thanks guys. I really appreciate your advice.
I was wondering if either of you used any fundamental analysis in your trading approach or is it all based on price action?
Another question I have is how did you select your stable when you were starting out? Was it based solely on the charts? Did you decide to select stocks from different sectors to give some diversification and to spread out the trading signals (I mean when one sector is quiet you could have potential trades in another sector whereas trading stocks in the same sector I imagine would give simultaneous signals).
Are there any sectors you avoid or think are “untradeable”?