Trading Shed's Blog

28/29th January

I have not been updating my journal lately as been very busy. However, I have been trading and kept notes to add to the journal. I have decided to enter them day by day as if I kept the diary going. It will help me when I read back.
Today my first venture into DJ resulted in a -96 as it fell through my stop loss!
Very volatile indeed!! Not sure where stop losses should be placed when trading DJ!?
Luckly, the position size was minute and no real damage done :rolleyes:
 
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Thursday 29th January

New foray in the US today with a very small long on DJ @ 10482.
Also a long on FTSE @ 4430. Hopefully we are on the way to 4500!
 
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Friday 30th January

CMC has decided that I should not profit from DJ trades!
My stop loss has been triggered by a 100 points spike downwards!!!!! For a -100
Which raises the question of how user friendly stop losses really are. I would have otherwise profited from the trade.
In this particular case, the stop loss has actually worked against me!!
Luckly it was again a very small position, however, I think I will leave DJ alone for a while longer. volatile jobby!
FTSE long still in place over the week end.

So, for the week ending today:
Diageo -6.5
FTSE +30
FTSE +10
FTSE +20
Dow Jones -96
Dow Jones -100
----------------
Total -142.5
Although in ££ it was a profitable week due to position sizes, disappointing results from my first DJ trades.
I will stick to FTSE.
 
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Monday 2nd February

New month! The last two have been the two best months for a long time, high expectations from February :)
Believe it or not... I have been spiked again!! This time on my FTSE long!
Stopped out for a -50 on a 1 minute downwards spike. And this time is not a tiny position as last wek DJ! ouch!

This seriously raises the question on how helpful stop losses really are. Again, it would have been a profitable trade otherwise.

I have no position open beside my long standing SHELL which is not moving.
I will stand aside licking my wounds and ponder over stop losses ;-)
 
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Wednesday 4th February

Bellway looked like it could be springing last night, but it was already up this morning. nevertheless, long @ 680 with a target of 20pts.
FTSE is low enough, long @ 4380, added to the position @ 4368. (averaging down again!!) :whistling
As the potential for the upside looks by far bigger than the downside, I have decided not to use a stop loss on this trade. Will monitor carefully!!
Do not enjoy being spiked.
 
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Friday 6th February

Not much activity this week, and a negative result at that!!
Only one trade (the Ftse spike!)
So:
FTSE -50
A negative week, both ££ and pts.

Open position over the weekend:
FTSE - Long (with temporary stop loss added!)
Bellway - Long
Shell - Long
 
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Tuesday 10th February

Nothing on Monday, beside removing the FTSE stop loss.

This morning British Airways and BP caught my eye so I am long on BAY @295.5 and BP @ 411.75.
BA has had good results and it ought to move up a noch. I have a target of 20pts.
BP is, like Shell, sitting near a very strong support @ 400ish. Upside more likely than downside.
However I have doubts it will happen quickly enough.
Shell is not doing anything.
My plans to hold my FTSE long all the way to 4500 look shaky, after a down day today.
Trade still in profit, decided to keep it.
 
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Wednesday 11th February

Added to my FTSE long @4392.
Still in profit, and still decided on no stop loss.
Breakeven is to close to home and I must trust my system which indicates upside.
 
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Thursday 12th February

Long on Barclays, two trades, average @ 505.5.
It looks oversold with strong support @ around 495ish. Possible upside to 535.

My FTSE long is now in paper loss.
If I had a stop loss it would have probably been triggered.
However, all my indicators signal a coming upside.
This is my first time in a similar situation. I have support @ 4365/70 and would probably sell if dips below that level.
However it doesn't. Position still open until tomorrow.
 
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Friday 13th February

Closed all my FTSE longs @4420, just shy of the day high.
I believe the upside has started and there could be more on Monday but do not want to keep position open over the week end.
Also closed British Airways and Bellway.

This week P/L:
British Airways +19.5
Bellway +10

As I have added 3 times to the overall position, I will treat them as three separate trades:
FTSE1+40
FTSE2+52
FTSE3+28
-----------------
Total + 149.50

Still open over the week end:
Shell - Long
BP - Long
Barclays - Long
Shell is looking everyday more like a dead trade, not moving much either side. I am not sure why I am still holding it. Probably because I believe that the downside risk is extremely low.
 
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Tuesday 17th February

Quick short FTSE @ 4453 as it looked overbought for the day. Wrong.
Quickly covered for a -7 @4460. (danger of trading against trend) :eek:
Large long then @ 4460.
FTSE looks ripe for challenging 4500 in the next few days. Still no stop loss in place.
 
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Wednesday 18th February

My FTSE long is now in paper loss.
Again, have I had a stop loss it would probably have been triggered.
Again, my system is indicating today as a small correction and tomorrow as a up day.
At 19.48, CMC is quoting FTSE @ 4430.
I decide to trust the system and to add to the long position. Again no stop loss.
 
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Thursday 19th February

Closed all my FTSE @4487 for a +57 and +27.
Did not believe that it would reach the 4500 today.

Short @ 4507 for a likely retracement.
Index closes @ 4515, decide to hold overnight.
My system indicates we are near the peak.
 
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Friday 20th February

With the index @ 4521, I am -14 on paper.
I decide that we are now at or not far from the peak and....I add to the short.
I am now sitting on two large shorts against the apparent short term trend.
Have I had a stop loss I probably would have placed it not far above 4531, as the previous high.
I would have been again stopped out as the index peaked @ 4550.
Indicators, however are signalling a fall to around 4500, and DJ action confirms the likelyhood.

Close Barclays, Shell and BP as I want to start the week fresh. I held Shell for weeks now with no results.
Finally close my short in after hours for 4499 and 4500. I believe that Monday will be a down day, but do not want to keep the positions open over the week end with no stop loss.

P/L:
FTSE -7
FTSE +57
FTSE +27
FTSE +8
FTSE +21
BP +11.5
BARCLAYS +1
BARCLAYS +4.5
SHELL -5
SHELL -2
(two separate positions)
--------------------
Total: +116.5
No positions open over the week end.
 
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Quarterly Review :)

As I have now no positions open and is just over 3 months since my first posting (18/12/03), I thought I would do a quarterly review to see the longer term picture.

42 Trades
13 Losers
29 Winners
-------------
69% success rate
600.5 Points profit
306.5 Points loss
------------------

Obviously the real success rate (££) depends on trade sizes, but I wanted to collect thoughts on my strategy and systems.

A few thoughts, not all new but first time recorded:
1) Not sure anymore how I feel about stop losses with index trading. They have caused me more trouble than support.
Maybe it is preferable to ignore riskier trades and trade without them. This is not the first time.
Over the years I have incurred losses due to too tight stops which would have turned into profitable trades.

2) Trusting my signals even when in apparent loss has paid off.
A few of the biggest winners have come about by trusting the direction given by indicators and adding to the position on a dip (rather than selling through a stop loss). Of course the strategy must adopt a longer time frame than daytrading.

3) I feel more comfortable with a longer timeframe. I find that I perform better working with 3 months/6 months charts for direction and TA studies, using intraday for entry/exit points. Daytrading is too fast paced ;-)

4) I have a tendency of closing winning trades too early. I should get into a discipline of closing them in stages to retain some exposure.

5) I sell potential winners too early! With BAE, my signals were correct, just a few days too early. After selling for a small loss, the stock rallied!!! The same is going to happen now with Shell and BP no doubts!!

6) I must stick to the plan formulated outside trading hours. I tend to get influenced into changing plan by 1minute charts.

7) I have to be more disciplined with money management and stick to predetermined position sizes. On a few occasions I have added too much to already large positions. It went well and produced good winners but it could have gone the other side..Expecially if I am planning not to use stop losses.
 
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Monday 23rd February

A bit annoyed at missing Mmo2 this morning.
Just after 8am CMC was still quoting 91.75 and seconds before I would have place a long trade it shot up to 106!!
Left it alone.

+11 on a FTSE short = 4549 to 4538
The index is looking very inviting for a short position. Today, however, I was unconvinced.
Although the close on Friday is bearish, it did make a higher high.

The situation has not improved after today's close. Another bearish signal, but with another higher high!
And a higher close.
I will decide tomorrow, but my indicators are all for a fall. Perhaps a short with a target @4485 (38% fib line) or even 4462 (50% fib line)

Opened the following positions:
Boots - Short
Marks & Spencer - Short
Dixons - Short
National Grid Transco - Short
Rolls Royce - Short
BskyB - Long
 
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Tuesday 24th February

A successful shorting day.
FTSE:
Short @ 4522, covered @ 4516 = +6
Added @ 4534, covered @ 4516 = +18
Increase to above position, averaging down
Short @ 4512, covered @ 4497 = + 15
Short @ 4500, covered @ 4490 = + 10
Should have left it all the way, but the initial rally am took some confidence away. Safer with short bites.
No FTSE position left opened

Added some more positions after screening through Sharescope:
Berkeley - Short @ 925
JJB Sport - Short @ 297
Carpetright - Short @ 995
Also added to my Bskyb long @ 715, I seem to have strong support arond 714ish so decided to add.
 
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25/26/27 + End of week

Not much done on Wed. was going to be away all day. Got tempted by a short @ 4496 with a limit buy @ 4476. FTSE kept falling to reach 4477 (!!!) and sprung back up. No stop loss in place. position open overnight.

Thursday I added to my short @ 4520. Not convinced of direction. I can't get a clear picture. Decided to close @ 4520 later on for a -24.

Friday is another wobbly day. I have a signal for a short but I don't feel convinced enough. The price seems to keep wanting to push higher.
Short FTSE @ 4537 only to close later @ 4536 for a +1. Wish I followed my signal as at the moment I have 4491!
As the price seems settled here, I opened a long @ 4491. Close it @ 4497. I was going to keep it opened over the week end by I still have bearish signals.

Two new stocks have entered the stable:
Abbey National - Long @ 482 in the hope that the sell off is overdone and if some good numbers come out from HSBC next week we might see a revival. Seem to have also some historical support in the 470/480 range.

WPP - Long @ 604.50 as I have a buy signal and support in the 600ish range. Sell off overdone again?

Week:
FTSE: +11
FTSE: +6
FTSE: +18
FTSE: +15
FTSE: +10
FTSE: +1
FTSE: +6
FTSE: -24
--------------
Total: +43

I have a lot of positions opened for next week.
I am trying a new 'longer term' strategy.

Longs:
WPP
BskyB
Abbey National

Shorts:
Rolls Royce
National Grid Transco
Marks & Spencer
JJBSport
Dixons
Carpetwright
Boots
Berkeley Group
 
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End of week 5th March 04

I have decided that I will probably update my diary once a week, not enough time to do it daily as I wanted initially.
Monday - My short in Berkeley was stopped out @ breakeven (I forgot I had placed a stop there!).
Wednesday - As my indicators still confirm a short, I opened another short on Berkeley @ 964.Today there is a stronger buy signal in Abbey National. Added to my long in @ 474.Managed 5 points in a FTSE trade 4508 4513.
Friday - FTSE short - 4561 4543 = +18 FTSE Long - 4533 4545 = +12 FTSE short - 4551 added @ 4540 closed @ 4550 for a loss!!4551 4550 = +1 540 4550 = -10 FTSE short - 4548 4555 = -7
Friday was a loss making day, although it looks like a positive result in points, the losing positions were larger than the winning ones - bummer -
So, for the week:
FTSE +5 +18 +12 +1 -10 -7 +19 (financially loss making, though

I also have evaluated all the open positions, and decided to keep them all open. Some are showing a loss and some are in profit. I have used the principle of 'would I enter the trade now in that same direction?' the answer was yes to all of them. Some tough decisions involved, though.

As an example, Carpetright is showing a loss of 30+ points. However, my analysis is still bearish. I could sell on the basis that the trade went wrong, or hold for the fall to come. I have support @ around 950 and we could have just hit resistance. The price is also showing very overextended. Time will tell.
 
What a mess!

Just had a look at my journal after a while....what a mess, with HTML and all that. Guess I will have to make it readable manually!!
 
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