Off and running (with scissors).

[ekiwi]

Hi,

First time poster hoping for some adice. Please excuse me if these things have been discussed elsewhere.

For about 12 months been playing around with my smsf. Mainly investing in shares in the US tech sector. Mixed success but it's for the long haul so it's all good.
Now feeling confident enough to make what i think are a few carefully thought out trades using my own money - or rather CFD's.

Signed up with IG and got off to a reasonable start this week, playing around with Apple.
Been a long time holder and am extremely confident of their prospects - esp. as we head into the 4th qtr which is traditionally the big one for them.

Bought 500 shares at $73.31 exited at $74.31. $500 US. Happy start.
Then bought 1500 shares at $74.50. Pleased as was almost the bottom on the day and yesterday it rocket up in the hour before lunch. Should've pulled the trigger and sold at $76 for a nice $2250 (or nearly $3k Aus) but hesitated and watched it trickle back down down down to $74.83. Still holding as it may take a day or two but we'll get there (any other stock i wouldn't but Apple is very liquid as I'm sure you guys know).

My question relates to how I can devise an entry and exit strategy. It's all a bit seat of the pants.
I'm not a graph guy -I know what way is up and what is down but that's about it - and this hasn't mattered till now becuase with Super it was always buying to hold, but if nothing else I do appreciate you need a solid plan to be successful over time.

I know it'll take discipline and have told myself 50c down on an AAPL trade is the exit point, but how to know how far to let it run up, what signs to look for on when or if to get in, etc?
Also IG's tools are basic to say the least (no trailing Stops) so maybe I should be looking for an alternative?

Any suggestions for a strategy to trade AAPL swings would be much appreciated, as would any other guidance.

Thanks everyone.

e-kiwi.

 

[andycan]

e-kiwi
maybe you should look at a chart to see where it opened and closed the day before. im not saying you need to read the charts but looking can tell you if its gaped up or down if volume has increased as they say a picture can tell you a thousand words look at the last 2-3 days many think that if the high of a stock is higher than the last three days its trending how true that is depends on each individual stock

good luck

 

[ekiwi]

Hi Andy,

Thanks for taking the time to reply.
You hit the nail one the head. That is th extent of my chart reading abilities. I do spend time looking at the Apple charts, forever hoping they'll reveal some kind of pattern. At the moment I use it's performance relative to the NasDaq as an indicator of what it 'should' do the next day. eg: from the week past it looks massively over sold to me, but I'm still kind of found wanting when it comes to intraday decisions. How much do people usually allow for a stock to fall back before they feel it's as good as it gets and exit? What signs do you look for? Twice last week I guessed wrong (holding to long) and it cost me a lot of potential profits. I know it differs for individuals and stocks but I just need to get a feel for what works so I can set some ground rules.

Thanks again!

ekiwi

 

[andycan]

Ekiwi
it sounds like you need to either learn technical analysis or learn level 2
technical analysis basically assumes the chart has all the fundamental info built in and gives you a visual display of where the support and the resistance area is.
level 2 is again a visual representation of what is going on but here you are seeing the bid/ask,how many shares are being bid or offered etc eventually you get to know who are the market makers who is buying it up, if a big order is coming and they are putting it out in stages, the strategies they play, it takes a while to learn but may give you that edge you need.
and in trading no guessing or you will find yourself in deep pooh
as for retracement well depends from where you are measuring a major swing high or low will have a retracement the general rule is if its in a real strong trend the retracement should be quite shallow if its just you run of the mill taking your time type of trend then the retracement tends to be deeper

 

[timaru69]

Hi Andy,

Thanks for taking the time to reply.
You hit the nail one the head. That is th extent of my chart reading abilities. I do spend time looking at the Apple charts, forever hoping they'll reveal some kind of pattern. At the moment I use it's performance relative to the NasDaq as an indicator of what it 'should' do the next day. eg: from the week past it looks massively over sold to me, but I'm still kind of found wanting when it comes to intraday decisions. How much do people usually allow for a stock to fall back before they feel it's as good as it gets and exit? What signs do you look for? Twice last week I guessed wrong (holding to long) and it cost me a lot of potential profits. I know it differs for individuals and stocks but I just need to get a feel for what works so I can set some ground rules.

Thanks again!

ekiwi

Hi ekiwi

Expat Kiwi in Aussie?

Anyway, a suggestion

Why not sell half of your position when you reach a certain level say 3% gain on the stock, then raise your stop to breakeven.

That way if trade fails then you have a profit and a no risk trade (unless stock GAPS against you,which tends to happen a lot in the NASDAQ stocks)

Cheers

T

 

[roguetrader]

Hi ekiwi
You might also want to find your feet trading something a little more sedate such as NYSE stocks, in fact you might want to daytrade on paper for a while, from what you have written it sounds very early in your career to be daytrading high priced Tech stocks like AAPL, particularly when they are at the centre of an accounting probe by the SEC.which may have something to do with why it is lagging the Nasdaq.
Investing is possibly to day trading what a cross country ramble is to moto-cross. The reason I say this is that you say

For about 12 months been playing around with my smsf. Mainly investing in shares in the US tech sector.

and are now willing to commit cash to 'trading' in the volatile tech sector.

playing around with Apple.
Been a long time holder and am extremely confident of their prospects

unfortunately the prospects of a stock as an investment to a 'long term' holder have no real bearing on daytrading it. Now I have no real idea whether AAPL has great long term prospects or not (recent chart looks quite pretty, up until the beginning of last week) but I do know that it can dump 3 or 4 bucks in a day and still be a good long term prospect, needless to say that wouldn't be the day you'd want to be long it. Be careful allowing investment thoughts to interfere with trading decisions. There is loads of information on this site and elsewhere on the net. Explore the theory of different styles to get an idea of what you feel like you want to do. I suspect using CFD's may rule out certain aspects, but since I have no real experience with them I couldn't comment. The one thing I would say is take it slowly, it's a long journey..

 

[andycan]

You might also want to find your feet trading something a little more sedate such as NYSE stocks, in fact you might want to daytrade on paper for a while, from what you have written it sounds very early in your career to be daytrading high priced Tech stocks like AAPL

Spot on!!

ekiwi,
think of trading like opening a shop all very well having products but if you dont know what your customers want you are going to get stuck
as roguetrader stated spend some time learning it will save you a lot of money in the long run. once you can see a chart and get a feeling what it wants to do then with other tools you can fine tune it then you are ready to start trading

good luck

 

[ekiwi]

Excellent advice guys! Really appreciate your thoughts.
After last week I already came to the realisation that I was treating trading the wrong way - just as you pointed out - by thinking long term.

I should be getting in and getting out, but like a ninny I was holding in the hope of ever higher prices down the track. Greed is a terrible thing

Am going to treat each day in isolation, look for the dips and take something off the table when it's up, and then it won't matter what the price per share is.

I'm sure I sound like someone who stands to lose his shirt but I will be taking it slowly

Thanks again and I'll report back soon.

Cheers,

e-kiwi.

 

[andycan]

Also do realise that not everyday will you get signals to trade or that the market is clear.
sometimes the hardest thing to do is to do nothing.

good luck