Medium-term Stock Spread Betting Journal

[leonarda]

Hi,
Having followed a number of other peoples journals with interest, I thought I would start a journal of my own, with the aims of helping my discipline and also learning from any discussions that may arise.

My background
I have a full time job, hence I trade medium term timeframes (1-3 months position duration typically), really only being able to check positions at lunchtime and before the close.
2009: I played with some demo accounts, did loads of research/reading and learned my way.
2010: I traded a live "micro" size account, refining my methods as the year progressed. I was pleased to grow my account by 130%.

My Methods
I learned a lot from reading the NakedTrader first book, on methods for trading stocks medium term using fundamental and technical analysis. I also use methods developed by Stan Weinstein (Profiting in a Bull and Bear Market), where he uses pure technical analysis methods for medium/long term trading/investing. So from this research I have developed my own methods that:
- Buy strong stocks in strong sectors that are in stage 2 continuation setups. Thus typically buying high or in a dip from a high and selling higher (with a bit of luck!).
- I always analyse the stocks fundamentals as per NakedTrader guidance, for growing dividend, revenue/profits, manageable net-debt, good outlook etc..
- Use Volume as an indicator on buying strength, as per Stan Weinstein's book.
- Use a slow stochastic as an indicator for entry timing.
- I always trade with the main market trend, as I determine from 30WMA, adv/dec indicator analysis, as per Stan Weinstein's book.
- I've developed my own scanning software that does a lot of the initial weeding out to give me a shortlist of stocks to manually investigate.

How I will run the journal
- I am trading still a relatively small account of £1000 at the start of 2011 (currently down a bit from that as we talk...:-()
- I will post my entry/exits when I make them, with a brief analysis of reasons.
- End of each week I will post an account/position status overview.

 

[leonarda]

Closed positions YTD

Total Trades	  9	
Wins	                  3	33.3%
Losses	          6	66.7%
Av. Trade Days	  26	
Average Win	  9.28%	
Average Loss	  -4.22%	
Biggest Win	  26.33%	
Biggest Loss	  -8.53%	
Av. Win/Loss	  2.20	
Profit/Trade	  0.28%	
Profit Factor	  1.10

Some of these were opened end of last year and carried over.

 

[leonarda]

Current Positions

Long  SN.L      age:  34 days  current:  731.2 (P/L:  6.6%)  stop:  653.0
Long  WTAN.L age:  33 days  current:  518.0 (P/L: -0.9%)  stop:  503.9
Long  ITV.L     age:  11 days  current:   86.6  (P/L:  8.1%)  stop:   75.8
Long  VOD.L    age:  10 days  current:  181.9 (P/L:  1.9%)  stop:  172.8

Account: £925 (-7.5% YTD)

 

[leonarda]

New Position

Long DGO.L Open: 560.9 Target: 640 Stop: 534.6 : Oil & Gas producers

Buying pullback in stage 2 continuation.
Strong stock fundamentals, in strong sector.

 

[leonarda]

Current Positions:

Not a lot of change this week, FTSE still range bound below 6090.

Long  SN.L      age:  38 days  current:  740.8 (P/L:  7.9%) stop:  653.0
Long  WTAN.L age:  37 days  current:  516.8 (P/L: -1.2%) stop:  503.9
Long  ITV.L     age:  15 days  current:   85.6  (P/L:  6.9%) stop:  75.8
Long  VOD.L    age:  14 days  current:  180.6 (P/L:  1.1%) stop:  172.8
Long  DGO.L    age:   2 days  current:  554.2 (P/L: -1.2%) stop:  534.6

Account: £924 (-7.6%)

 

[leonarda]

Position closed

Trailing stop hit.

ITV.L P/L: +4.92%

 

[leonarda]

Position Closed

Trailing stop hit.

SN.L P/L: +4.46%

 

[leonarda]

Position Closed

Stop hit.

WTAN.L P/L: -4.13%

All going well... "NOT"!

 

[isatrader]

Don't worry Leo, you're not alone. Most stocks are down, so just console yourself that you made some profits and start to look for new positions to put on once the correction has played out for a while.

 

[leonarda]

Don't worry Leo, you're not alone. Most stocks are down, so just console yourself that you made some profits and start to look for new positions to put on once the correction has played out for a while.

thanks isa, you're right, I can only console myself in that I am being very disciplined in my stops. It has already saved me quite a bit of dosh closing out ITV.L and SN.L, which are quite a bit lower than where I stopped out... I hate giving back profits so the strategy has definitely worked there.

 

[leonarda]

Current Positions

The drawdown continues... although expected with this market pullback.

Long  VOD.L  age:  21 days  current:  174.7 (P/L: -2.2%) stop:  172.8
Long  DGO.L  age:   9 days  current:  587.0 (P/L:  4.7%)  stop:  534.6

Account: £880 (-12% YTD)

 

[leonarda]

New Positions

Long ITV.L open: 85.7 target: 95 stop: 80.6
Back in to ITV in pullback in good stage 2 continuation trend.
Long PIC.L open: 211.6 target: 280 stop: 207.8
Pace fundamentals look good, runup to earnings, in pullback to support thus close stop.

 

[leonarda]

Got lucky with good ITV 2010 FY earnings results today, up 5% !

 

[leonarda]

All 4 of my current open positions are making sterling progress, my -12% drawdown has now been reduced to only -4% in a mere 3 days!

 

[leonarda]

New Position

Good fundamentals, strong sector, buying into pullback.

Long LOG.L open: 133.5 target: 170 stop: 128.7

 

[Jack o'Clubs]

Leonarda - just some friendly advice. Have a think about your tight stops. If you're trading for the medium term then there's a real risk that you're getting whipsawed out of fundamentally decent positions because of noise, in positions that would then go on to perform well. Do you look at the stocks that you've been closed out of - how have they performed since? Make sure your stops are appropriate for the timescales you're trading.

 

[isatrader]

Leo, something I've been looking at recently is relative strength analysis using point and figure charts for longer term holdings. See the attached charts of LOG.L divided by the US Technology sector and by the S&P 500 Equal weighted index, you could do these by the FTSE and UK tech sector if you wanted to. LOG.L is under performing the tech sector and has just gone to a sell signal against the S&P 500 Equal weight index. Looks like an interesting short term swing trade if it can pivot here as is at the 100 day EMA. But I think the relative strength charts show that you should be cautious on a medium term holding as it is under performing the market.

 

[leonarda]

Leo, something I've been looking at recently is relative strength analysis using point and figure charts for longer term holdings. See the attached charts of LOG.L divided by the US Technology sector and by the S&P 500 Equal weighted index, you could do these by the FTSE and UK tech sector if you wanted to. LOG.L is under performing the tech sector and has just gone to a sell signal against the S&P 500 Equal weight index. Looks like an interesting short term swing trade if it can pivot here as is at the 100 day EMA. But I think the relative strength charts show that you should be cautious on a medium term holding as it is under performing the market.

interesting, my buy is based on the medium term (3-6 month) relative strength trend against the FTSE, as well as the on-balance volume trend. I also, very much like the fundamentals and growth prospect. We'll see what happens...

 

[isatrader]

interesting, my buy is based on the medium term (3-6 month) relative strength trend against the FTSE, as well as the on-balance volume trend. I also, very much like the fundamentals and growth prospect. We'll see what happens...

I've attached the chart divided by the FTSE. It is outperforming the FTSE. Is interesting that is is quite different to the US comparison. That's probably because the FTSE is under performing the S&P 500.

I hope it does well for you.

 

[leonarda]

I've attached the chart divided by the FTSE. It is outperforming the FTSE. Is interesting that is is quite different to the US comparison. That's probably because the FTSE is under performing the S&P 500.

I hope it does well for you.

Yes, the FTSE is underperforming the US indices by quite a lot YTD, some 4% or so. I think this is mainly due to the US recovery being stronger and also the UK markets pricing in an interest rate rise in May.