Out of the closet

D

dimsdaletraders

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Okay, I'm gonna try not to skite on endlessly here, I want to try and keep this as a journal of my trades. So here goes. (comments welcome, tho, obviously!)

I started on October 26th with a "practice" account of £1,000. Real money, with MFGlobal, but small enough so I can afford to lose it. I'm only trading stocks from the FTSE350, EOD, for now.

So far I've completed 20 trades. Of those, I've had 7 wins, and 13 losses. My a/c went down by almost 9% at one point, but back to 6% under at the moment.

Current position: I have three open trades, six trades placed with MFG but not yet active, and nine trades on my watchlist.

My open trades are:

GSK: went long on Dec 10th, entered at 1297, initial sl at 1279, current price 1324. Tonight I entered a take-profit of 1335, and moved sl to BE point (option a). The alternative was to move sl to 1319 (option b), and let it stop me out tomorrow for 20 or so points if it falls back. That would have meant almost certainly not making my target, so I went with option a.

MRW: went long on Dec 11th. This one was an FA call, tho with TA support, entered at 282.4, sl 272, I was looking for a consol. breakout. Current price is 275.7 after 277.1 yesterday. It's still trading in its channel, tho, so haven't interfered with it.

BVIC: went long on Dec 11th. entered at 384.8, sl at 372, current price 388, after closing yesterday at 390.5. Only realised there was probably going to be strong resistance at 400 when it was too late and trade was live, so doubt I'll make my target. Currently planning to trail sl if possible, first to 386, then 391, and take what comes, loss or win.

My placed (but non-activated) trades are:

ATST long (e 317, sl 305)
BP. long (e 596, sl 570)
CCL short (e 317, sl 334)
GPOR short (e 266 sl 276)
KESA long (e 164 sl 148)
ETI short (e 93 sl 107)

More tomorrow.
 
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What jumps out at me straight away is a lack of filtering for overall Strength orWeakness.
Buy the stronger in a rising market.
Sell the weaker in a falling market.
3 of each pending orders doesn't do it for me sorry.
I think for this reason alone the account will bleed to death.
 
ummm...thankyou, I think. Do you mean because I've got longs AND shorts set up at the same time, please?

So, the FTSE is in an overall upward trend, plus it is currently in phase 1 after a pivot from eMA, so I should only be going long?
 
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dimsdaletraders said:
ummm...thankyou, I think. Do you mean because I've got longs AND shorts set up at the same time, please?
Click to expand...

Well there may be a perfectly valid reason and i'm not sure what your strategy is of course.

Just simply making the point that a rising tide will float most boats...so really if you think world markets are rising...then you would only look to go long...vice versa for shorts.

I'm sure someone who trades stocks will comment further.

cheers.
 
Left GSK to run yesterday and it lost a lot of ground, so I moved it to the strategy (b) list, and exited today at 1319, for +20. If my stakes had been higher I would have taken half only, as per future plan, but limited by MFG. Added to paperwatch as comparison.

MRW still live, still in channel, no changes to sl needed.

BVIC: still live, no changes to sl needed. Shouldn't have been in this trade, so not adding to either strategy list, just the overall "mistakes" file.

My placed (but non-activated) trades are now:

ATST long (e 317, sl 305; chkd Dec16, still valid)
BP. long (e 596, sl 570; chkd Dec16, still valid)
KESA long (e 164 sl 148; chkd Dec16, still valid)
ETI short (e 93 sl 107; chkd Dec16, still valid)

CGL and GPOR cancelled, TA set-ups no longer valid.

More later
 
% wise that's a bloody big stop loss on ETI, it's got to fall 15% to get 1:1 R:R and even if it was to go bust you'd only get 6.5 times R:R.

Not saying it's wrong but you can probaby find trades with better chances of returning a higher percentage reward.
 
hi foredog, thanks a lot for the reply!

uh huh, it's huge, hey. It gives me something like a 14 point spread on a stock that only has an ATR10 of around 5 at the moment, and at its most volatile rarely gets above 12! It's an emergency get-out stoploss, mind you, only good for the first day. If this kind of break-out trade activates then my rules say that I close the sl in at the end of day 1 and adjust my position accordingly.

What this setup does, of course, is keep my initial stake per point VERY tiny, tho the day 2 rules add to that, but as you say, because my R:R is so small I end up needing a win:loss rate across all trades of about 70%.

Be interesting to see where this strategy ends up going! So far it seems to suit my trading style, but obviously it is way too soon to know if it will work consistently.

I have more faith in my new-born swing strategy (which is also in development!) but there's pretty limited opportunities at the moment to test it out. Roll on the new year!

cheers
Tess
 
Tess,
Personally I gave up trading UK stocks years ago as US are so much more reliable - and for lots of other reasons.
A few things jump out at me, however.
What's the volatility of your stocks - the beta?
Are you position sizing and how?
Holding positions over days or longer drastically increases risk from unpredictable factors as I've mentioned before and you can chopped up by overnight gaps.
May I suggest your focus on this type of trading is based on you and your husband's work experiences and not necessarily on the most effective use of trading funds. After all this is about trading not diversified portfolio management. In other words would you consider are you bringing longer term financial methods into a different trading arena where they are probably not going to work unless the market is cleanly trending over a prolonged period. Even if it was you might consider a different form of hedging to a few longs and a few shorts.
All imho, of course. Others will disagree, but I've been through what you are doing now in the 90s so my views are based on personal experience. But still, horses for courses as always.
Richard
 
Hi Richard

I know what the beta is (I think!). It’s the measure of a particular stock’s volatility against the index, do I have that right? I don’t/haven’t used it, because I’m only looking to hold positions for 3-10 days, and I thought that beta was just for much longer-term stuff. Do you think I should be using it for this?

I’m position sizing using a 1% limit divided by the difference between my entry and my stop (plus MFG’s spread) to give me my value per point.

I take your point about the overnight gaps, but I’m not sure how to EOD trade any other way. Ideally I’d like to get into intraday trading eventually, and maybe look at Forex (tho I find that scary) but right now I just don’t feel confident enough. It takes me such a long time to analyse every trade, it would BE end-of-day before I’d made a decision, I think! *g*

You’re right, my focus on the FTSE350 is probably partly down to that being an area I know the most about from work, so I’m intrinsically comfortable there, but the primary reason is because at the Greg Secker weekend seminar I did, that’s what they introduced us to. As I said in another thread, I’m still not sure whether what I was taught was a good jumping-off point or not, and I’ve already abandoned the powerplay strategy they taught me, so now I’m just trying to find my own.

As far as a “different kind of hedging” goes? I don’t know any other kind, is it okay to ask you to explain what you mean?

Thanks a lot for the help here!
Tess
 
Hi Richard

I know what the beta is (I think!). It’s the measure of a particular stock’s volatility against the index, do I have that right? I don’t/haven’t used it, because I’m only looking to hold positions for 3-10 days, and I thought that beta was just for much longer-term stuff. Do you think I should be using it for this?

I used to when trading T25 in the 90s (my broker let me open positions for up to 25 days before having to pay or close).

I’m position sizing using a 1% limit divided by the difference between my entry and my stop (plus MFG’s spread) to give me my value per point.

How I position size is related to ATR in an approximate way - there are details in the thread which is linked in my signature.

I take your point about the overnight gaps, but I’m not sure how to EOD trade any other way. Ideally I’d like to get into intraday trading eventually, and maybe look at Forex (tho I find that scary) but right now I just don’t feel confident enough. It takes me such a long time to analyse every trade, it would BE end-of-day before I’d made a decision, I think! *g*

:) IMHO and experience day trading is much easier and any potential loss can be easily controlled as you don't get over night gaps wrecking your positions. Above all YOU are in control, not events beyond you. I trade US stocks and gave up both UK trading and my dental practice to do so. I started out trading the UK evening only as that is the US afternoon; they close at 9 pm UK time.
You’re right, my focus on the FTSE350 is probably partly down to that being an area I know the most about from work, so I’m intrinsically comfortable there, but the primary reason is because at the Greg Secker weekend seminar I did, that’s what they introduced us to. As I said in another thread, I’m still not sure whether what I was taught was a good jumping-off point or not, and I’ve already abandoned the powerplay strategy they taught me, so now I’m just trying to find my own.

I try not to say anything too negative, (though occasionally I lapse when irritated), so I have nothing to say about the Secker course.... :rolleyes:

As far as a “different kind of hedging” goes? I don’t know any other kind, is it okay to ask you to explain what you mean?

There are many ways. For example,if you are in an up trending market you can use options to protect yourself against a violent downturn - a form of insurance. This is a very big topic.

Thanks a lot for the help here!

My pleasure - just a different perspective for you to consider.
RichardTess
 
dimsdaletraders said:
It's an emergency get-out stoploss, mind you, only good for the first day. If this kind of break-out trade activates then my rules say that I close the sl in at the end of day 1 and adjust my position accordingly.
Click to expand...

Hi Tess

Not trying to pick holes but have a question that I'm sure many others could answer.

You have an emergency stop at -14, ok you enter the trade and it goes offside by 8 points in the next hour.....whats the plan exit at -8? Wait for the stop loss to be hit at -14? Kick yourself you didn't get out at -5?

I don't get the emergency thing, if you intend to be out at -8 (for example) as a "mental" stoploss, why not have your stop there.

Surely if you've sold something and it's gone 5% against you then the chances of you making a proft on that trade have reduced from 50-50 to maybe 25-75. Why not get out and save yourself the other 10%...if it goes back down then you can renenter.

(sorry if this sounds aggressive i'm trying to be helpful....I just don't get the emergency stop miles away and then quickly move it up...why not just have your stop where you'd move it anyway)
 
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Hi Tess,
Regarding beta's. I dont know anyone that position sizes according to beta. Most guys I know trade on a $value basis. ie. 10,000 $ worth of stock A, 20,000 $ worth of stock B, etc.
Why?
Because beta's arent consistent, one day a stock can get a boost and outperform / underperform it's beta by a long way. For most consistency in returns I would go for $ value position sizing. It's worth paying a small bit of attention to volility and price of stock. ie. If very volatile, you trade a little lighter, and if priced at 10p, you trade a little lighter. Something at 11quid you trade a little heavier....... it's not scientific, it's just what time has told....

Regarding what you are trading, the spreads on all those stocks metioned so far are reasonable so that's good. Definitely set yourself a limit tho..... ie. if spread is greater than x % of price. No trade. I would recommend sticking with ftse 100 (and ftse 350 for when you "have to"). And watch out in quiet periods, stock spreads can get very wide and on some exchanges (ie. chix, turquoise, bats) dissappear totally!

If possible, i wouldnt have stops in the equity market (just mental stops or alerts). I am assuming you are using a sb'ing firm? (which one?).... they will be able to hit your stops if the price gets close (with eratic fills). If you can run the book "naked", i would do so....... (i await the strong criticism.... :( )

The way to run a book naked without too much worry is to have a number of stocks (as you have) and run longs and shorts (as you have).... then you arent "too long" at any one time or "too short" when you add up all your positions together. You can also use options as Mr charts mentioned or take a position in a future, like the ftse. It's your call on how you run all of this really.... some guys like a bang for their buck and run everythink naked in one direction.... whatever floats your boat!

Nice mix of stocks by the way... will follow with interest!
 
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hi Richard

Thanks a lot for the expanded answers. I really appreciate all the help I'm getting here. I'm working my way through the thread you mentioned, and taking notes. I'm particularly interested in what you say about position sizing, as that's something I'm still working on in three different levels, two of them on paper, and one on the a/c, so I'm going to add this way as another strand, once I understand it, and see what results I get. :D

hi foredog, thanks a lot for the reply

QUOTE: "You have an emergency stop at -14, ok you enter the trade and it goes offside by 8 points in the next hour.....whats the plan exit at -8? Wait for the stop loss to be hit at -14? Kick yourself you didn't get out at -5?"

Wait until it hits -14. Because although you're dead right, and that would save some of my bet, I'm such a risk-averse person by nature that if I let myself do that, and didn't stick to my plan, I'd be closing trades every time the price even GLANCED south! *grins* It's one of the things I am finding the hardest, is to resist the temptation to jump in and minimise my loss if it looks like it is going against me. I did that twice in my first couple of weeks, only to watch the trade I was following on paper come good a couple of days later. (MSY and PFD).

So for now, I'm just reminding myself that the 1% loss is factored into my strategy, and that's okay, and I'm making myself leave it alone? That's not to say I won't change that as the strategy develops, because I can see your point, and it makes perfect sense, so I'll have a look this weekend at a plan for that too.

oh, and don't worry about seeming agressive or like you're picking holes. Truly, anyone willing to spend their time to give me advice in here can tell me "hey, f*ckwit, don't do it like that, do it like this! you're gonna lose all your money!" and as long as the advice is sound, that's just fine by me! (y)


Hi D70

someone else to say thankyou to! Partly for the words of encouragement, mostly for the advice!

I'm definitely doing as you suggest, and if the spread is too wide for a 1% or at most a 1.5% overall risk, then no trade. It's frustrating sometimes, because it means I can't trade most of the mining companies, for instance, but I figure I'll be able to stay in the game long enough to learn how if I stick to that rule.

I'm using MFGlobal, just because that's the one that K2A (the Secker course) set their trainees up with, and I use their "market" option, rather than their "our quote" system, again simply because that was what I was told to do, and I don't know enough (yet!) to do any different. I'm using ADVFN as a charting package for the same reason (and because it's cheaper than eSignal, which was the other option).

PS. I'm not so much a "bang for my buck" kind of trader as the "whimper for my wonga", and the idea of trading without stops terrifies the socks off me! But I'm taking Richard's (and now yours) advice and looking now at options and futures. I'll get back to ya! :)
 
Current position: I have two open trades, four trades placed with MFG but not yet active, and 12 trades on my watchlist.

MRW: still live, still in channel, no changes to sl needed.

BVIC: still live, and one of the very few to actually have gone UP today. If it can hold on and add a couple more points to get me past the MFG spread, I can move sl to breakeven and feel I’ve gotten off lightly, as it was a bad choice.

My placed but non-activated trades are:

ATST long (e 317, sl 305). This is a textbook consolidation to break up to the long side. Lets hope IT knows that!
ETI short (e 93 sl 107). This is still in channel, still finding support at 95.
GSK long (e1301 sl 1276). Should be ready to turn if I’m right about the trend, so trying for a second bite of the cherry. Would ideally go in at 1298, but MFG spread dictates not. If it slips another point or two at open tomorrow, may open as a live trade at 1298 instead of waiting to evening then amending the order ticket.
ISAT long (e672, sl 645). This is a 1.4% risk, so just squeaks in under my 1.5% limit. Looking for a breakout.

BP. And KESA orders cancelled today, TA set-ups no longer valid.

Reassured today to see that I was right to cancel the CGL and GPOR orders, or at least that so far they haven’t been missed opportunities. It’s hard to make myself let go of one that I’ve been watching for a while.

Twelve on close watch for tomorrow, may add more once I’ve been through the 100.

More later.
 
I wonder if that counts as my first "day trade" :cheesy:

GSK activated this morning at 1302.8 and I decided to monitor it live and then get out when the bid/offer prices fell twice consecutively, which they did around 30 minutes ago. Got out for 1313.68. It may well go higher, of course, but I got the "second bite" I was hoping for, so I'm satisfied all around with the trade.

More later
 
Hi Tess,
If you've not found it already, you might find this thread of interest:
http://www.trade2win.com/boards/uk-indices/49208-swingin-ftse-2009-a.html
Yes, it's swing trading the FTSE 100 index rather than individual stocks, but a number of the contributors to the thread also trade FTSE 350 stocks - most notably 'barjon' and 'tomorton'. barjon has written a couple of articles, one of which is specifically about swing trading - well worth a read:
http://www.trade2win.com/knowledge/...ticles/general_articles/simple-swing-trading/
He, Tom and others in the FTSE thread are all fans of Marc Rivalland who has written a very good and highly influental book on swing trading simply called 'Marc Rivalland on Swing Trading'. Well worth adding to your Christmas pressie list, IMO. Check out his site:
http://www.marcrivalland.com/
HTH.
Tim.
 
Hi Timsk, thanks a lot for the help.

The first one you mention is one of the ones I've been reading as an ongoing project in the evenings, and I'm learning shed-loads of stuff. Thanks for the steer, tho, and especially for the support, and I'll definitely follow up on the others as well.

At the moment I'm also working my way through the one Richard set up about day-trading US stocks, and now that I'm stopping for the holidays I'm hoping by Jan 6th I'll have finished them all and understood everything there too.

I've heard other people on the site mention Marc Rivalland, but when there is so much to learn things tend to slip uinder the radar so I'm particularly glad for this info, and I'll get hunting that down too. Now have it bookmarked to follow up.

**********

Current position:

All potential set-ups now cancelled, as I'm stopping trading until January.

Of the three live trades remaining on Friday:

GSK (see above entry).

MRW: got stopped out for 1% loss. This was my FA set-up (though it also had TA support as a consol. breakout), and it broke down rather than up.

Still in BVIC, and will try to get out of that on Monday for a scratch if I can, it has pretty much spent the time since it opened seesawing around the entry point, so as long as I can catch it there on Monday,...

*******

Seasons best to all!

Tess
 
thanks a lot, jon, I'll go take a look at that when I get done here..

well I couldn't stay away from trading altogether, but didn't want to do any proper set-ups and end up with open trades over the holiday period, so once I'd gotten out of BVIC (see post above) at just a point or two below entry (a cheap lesson in keeping my eyes open!!), I decided to try a little (slow!) daytrading using at least a rough version of the method from Richard's thread I'd been reading.

Since then I've had a lil bite out of IHG yesterday and two out of SMIN today. I only made a few points each time, but the real value was threefold. First, it gave me a pre-taste of daytrading, second, it showed me that if I was really intending to use the method properly I would definitely be needing to switch to US stocks (as the method is intended for!), and third, it proved just how much difference my SB spread really makes in that kind of trade.

Now I'm just looking forward to 2010.

Cheers to all, keep on truckin!
Tess
 
So last night I set four long orders, on ATST, COB, CPG and CPI. Entries and stops were all pre-calculated, but I was planning that if they ran up I'd close them out manually once I thought the run up, if it came, was over for the day, theory being that I didn't want open trades over the holidays. I mostly just wanted to see what would happen this morning between 8am and 9.30, after yesterday's climbs.

The trades didn't go so badly. One didn't activate (CPG), two made me a few points (ATST, COB), the third (CPI; still open) is a few points down. But I'm ticked off with myself. I keep exiting too early, and I can tell myself a dozen reasons why it's the right move at the time that all seem perfectly reasonable. But they're not. I just can't seem to let a trade that is going my way fall back, even tho I have TA'd it to death before entering, and know exactly what my target is, and even why there are good reasons for it, and what those reasons are...when I'm watching it, if it makes me a few points, I get out.

I've been luucky so far. I have close to a 75:25 win:loss rate, so although my rewards are so small, at least my a/c is still growing because I'm managing the risk side just fine. I don't care about the few trades that go against me, it's only 1% and I just see them as overheads, and don't sweat them. So why am I doing this on the trades that might actually pay off????

I need a strategy that will keep my finger AWAY from that damn button until I have a genuine reason for exit.

More later
 
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