Swing trading FTSE100 members

[tomorton]

All shorts closed just after 8 this am, so I am flat for Easter now.

In future I would preferably monitor prices just prior to the Close and manually exit positions when the portfolio gets to a decent £ profit level. The two times I have exitted trades with a stop moved very close to the trailed stop levels this week I have emerged with 50% of the unrealised profit banked and 75%. Of course, whenever exitting a position, there's always the chance that prices woud have moved / gapped away from the stop and more profits could have been had, but I would prefer to get 100% of a significant return in the bank, than 100% of an amount that could be just a little more.

 

[wackypete2]

Good thread.
Well done.
Happy Easter!

Peter

 

[tomorton]

Cheers Pete. Actually, I've surprised myself how easy this strategy has been to implement. Scanning the 100 FTSE charts nightly is easy with Sharescope swing charts set up and there is little subjective input. I keep waiting for the bubble to burst but anyway, so far so good.

Happy Easter!

 

[tomorton]

Flat for the Easter weekend, but set for next week.

As would be expected, the weakness this week has led to some putative swing lows that might be platforms for longs, so I have put in a raft of buy orders for next week. They may not look the best charts in history - the 3 supermarkets again, Legal & General, the Pru, Experian and the like - but losers so far are sufficiently controlled that the stops can tell me if my timing and direction is wrong, without wiping me out.

Have a good weekend.

 

[billnye5]

Flat for the Easter weekend, but set for next week.

As would be expected, the weakness this week has led to some putative swing lows that might be platforms for longs, so I have put in a raft of buy orders for next week. They may not look the best charts in history - the 3 supermarkets again, Legal & General, the Pru, Experian and the like - but losers so far are sufficiently controlled that the stops can tell me if my timing and direction is wrong, without wiping me out.

Have a good weekend.

Not that I know a great deal about the markets, having only lost money thus far (due to being too low of a capital investment) but considering todays jobs number, and the reaction within all of the 30 minutes of the market being open (120 points to the downside on the futures) I would consider removing those buy orders, and swapping for sell orders or staying out of the market.

 

[tomorton]

Indeed, that would be a correct reading of the market for traders taking a top-down approach - i.e. decide which way the market is going and ride stocks following that trend. However, for shorters, that bus has already gone.

Of course, it's always possible that the UK will revert to more closely tracking the US indices than we have lately, US markets being less bearish and not having yet dropped out of a bull trend.

Either way, my preference is to let the market tell me which way it has gone, rather than me predict which way it will go, and the long entry levels are all therefore just above Thursday's intra-day highs so that if the market goes really bearish on Tuesday, these levels should not be triggered: if we have a bullish recovery, even if only temporary, I should at least break even.

The aim is to apply as little subjective TA as I can financially bear, with the aim of finding sufficient stocks within the index that don't move in step with the index itself. If wishing to follow the main market trend of course, the only logical way to proceed would be to trade the index itself, though this narrow approach has a very poor record.

 

[tomorton]

Tuesday update - a mixed picture - 1 Buy triggered and stopped out, 1 Sell triggered and stopped out, 2 Buys triggered and still running slightly in the red, 3 Sells triggered and still running slightly in the black.

Today's negative market performance has introduced a few more putative swing lows and more surprisngly, some of these are Buy opportunities in continuing uptrends, such as Meggitt, Hargreaves Lansdowne, Kingfisher etc.

Acknowledging there would have to be a mega-reversal in sentiment to even trigger these Buys, but the point about swing trading is it's based on turning points within trends, so a counter-trend movement is a requirement. More cautious traders will ignore Buy opportunities while the main indices are in downtrends.

 

[tomorton]

Sorry, should have mentioned, the shorts were from the other account, FTSE250 stuff only.

 

[tomorton]

No new putative swing highs today, but found a few morepossible long entries if swing lows confirmed tomorow - Vodafone, Intertek, Petrofac. also had to reduce entry levels on several Buy orders carried over to tomorrow - such as BT, Legal & General, Kingfisher, Meggitt. Also had to cancel Buy on AMEC as price dropped below previous swing low.

It will be interesting if the market bounces upwards tomorrow.

 

[tomorton]

18 long positions opened, showing very healthy combined return. Unfortunately I was unable to be online at the close today or I would have exitted all and banked the profits, but that will be an early job tomorrow morning. As the profit from this exercise is looking so good, there is no need to accept any additional risk from holding through the weekend. However, I will take a look in case there are any possible Shorts I can enter tonight, as I figure any significant news over Saturday and Sunday is more likely to be negative rather than market-positive - Glencore and National Grid and that's it.

 

[tomorton]

Closed all the Longs today for a good profit, but would have been very much better if I had had the chance to be online last night and exited manually before the Close. Knew it would happen as observed this before but just couldn't be online in time.

Leaving Glencore and National Grid tSell orders in place for Monday, and have now added orders for Kingfisher (B), Legal & General (B) and Polymetal (S).

Have a good weekend all.

 

[tomorton]

Wednesday round-up - Open trades are in that awkward phase where the longs have not reached target but not been stopped either, while as for the shorts, most have not been triggered and those that have are also dithering in the red.

I suppose with the main market charts showing indecision that's what most systems like this will be currently showing.

A decisive move up or down would bring a profitable exit opportunity, a strong down move out of the prevailing bear flag would trigger the largest raft of sell orders I have yet keyed in, but the move would need to have follow-through in order to achieve exit levels before the market uptrend resumes - these shorts may be opened but the main indices could still be argued to be in bull trends. We will soon find out.

 

[tomorton]

End of a tough week, lots of sell orders trigered and quite a few stopped out as the bearish pattern of the main market failed to confirm and prices yo-yoed.

Main indices still show a bear flag in a downleg out of a broken uptrend so I hold my short positions into next week. does anyone else feel safer holding shorts across a weekend rather than longs?

Some good looking sell oprders meanwhile have been raised to higher prices as their putative swing lows are exceeded by buying days so that might form some consolation when/if they eventually trigger (e.g. BHP Billiton), though others in downtrends have risen well enough that those downtrends have been negated and the sell orders on them cancelled (e.g. Aggreko, ARM).

 

[tomorton]

Looking at why my results are poor for April so far, the main index charts are certainly ambiguous, but more objectively, 5d volatility on the FTSE100 has averaged 1.35 during April, but 0.73 during my much more profitable months of February and March. This is an increase of 85%, and more than half the sessions this month so far have recorded Volatility greater than any day in the previous 2 months.

I'm considering using excessive FTSE100 Volatility as a guide to position sizes in future trades of this type.

 

[tomorton]

This morning's outstanding market fall prompted me to clear everything out and bank the profits by lunchtime. Returns on this swing 'campaign' good enough to bring me back into the black and will probably mean a monthly gain well exceeding March's.

I was only reading somewhere last week, when the market gives you a windfall, take it.

 

[tomorton]

Despite today's slight rise, some share charts continued their decline and printed fresh putative swing lows, so I have entered a range of new buy orders tonight - Compass, GKN, BHP Billiton etc., though a couple more shorts - AMEC, Aviva and M&S. Now running 2 longs open and slightly in the red, 6 buy orders and 3 sell orders.

Please don't think that I believe the market is going to go up tomorrow, I don't see anything in the TA yet to suggest that, it's just that those particular share charts printed putative swing lows so I have entered putative buys. All I can say is simply that if the market goes up I will probably find I am a buyer and if it goes down I will probably be a seller. Now I can get on withj my evening ansd go to woprk tomorow and not think about trading until just before the close tomorrow, when I might manually close some positions if they're well in the money.

 

[D70]

Hi Tomorton,
Have you got a roundup of trades taken and then profit / loss acheived?
Cheers.

 

[tomorton]

Hi D70 -
Aiming to do the usual monthly round-up on total trades taken and % gain on the account for April on or very soon after the 30th. It might be a good idea if I made it a 3-monthly round-up too, as I started this programme early in February I think.

Of course, even with a common list of the actual shares traded in April, no two traders would have had the same result. So much depends on where you set your entry and where you exit, and this is especially a variable if exiting manually at an unspecificed time during the session, as I am currently favouring in order to capture profits offered by unusually large moves in a session.

 

[D70]

Hi Tomorton,

Thanks for coming back to me. I'll flick thru the pages I havent looked at yet to find previous monthly reviews you've done.

One question tho. Arent you finding trading UK stocks far too expensive? I moved to US stocks pretty quickly after seeing the cost differential. It's quite astounding and will boost returns massively even if you're a direct access player / LSE member.

And if I may. From the part I did read. To take out some of the discretion regarding whether to trade AZN and Glaxo at the same time. Why not just take 2 stocks from each sector. Or even 1 stock, the market leader from each sector. Then you should have a nice spread.

Plus, if you find yourself massively one way, you can always put a ftse trade on tuther way for hedging purposes.

 

[tomorton]

Good comments D70, thanks for taking the time.

As far as trading costs go, I'm spreadbetting the FTSE100 members via Capital Spreads, so spreads on comparable UK stocks are going to be better if I trade these than the US.

Your point on limiting exposure to a single sector is a good one and I accept I may have to follow this policy. I set up the thread intending to trade witn minimal judgement input, so that I would never have to judge which was the best share chart sighnal, I would just take them all. That said, only a few weeks in, I did get nervous being so exposed to mining stocks that had effectively identical recent swing chart patterns, so I let some of the buy/sell signals from that sector go by. Seems the prudent thing to do. Maybe I will institute a risk management rule in May that limits exposure per sector to not more than, say 2 members in the same direction. Thinking.