Results tagged “Learning” from My Trading Diary
Super Micro Computers - meets most criteria - recent all time price low - and crossing of stochastic. Underbought and undervlaued. Can range on the day. One reservation is that yesterday's high was above the high of the previous three days high. Also gapped up overnight and not retrace so due a reversal?...Buy up to $6.40 - could this be like yesterday where I missed the boat and price continues to rise? Watch and learn! Bought and lost - again stop loss triggered - I think too tight and will vary now based on recent volatility.
ParkerVision - share tends to move more sedately but PR's are there. Buy up to $4. Ended at $5 - 25% - I would have made £1750! At least I can pick them :)
Security Bank - meets criteria - can range - volatile too Buy up to $2.45. This share plunged to $1.80 - had I chosen this my stop loss might not have been filled at the level stated and I could have been left holding a share that lost 25% of its value and cost me on a £7K trade £1.75K. Should I trade smaller amounts. Would generate more commission costs though not more PR as it would be shared around - in fact smaller PR requirement. Will add this to my Task list for further thought. Bought at £2.07 but took no account of wide spread which is likely to trigger my stop-loss. Third loss of the day. Very poor.
Kforce - meets criteria. Buy up to $7.70 above yesterdays closing as feel this share as legs. First choice. Bought at 7.71 and almost immediately triggered stop loss - admittedly very tight.
Three of my four shares have risen which vindicates my predictions but I did not capitalize on any due to all having more sellers than buyers in the order book. This gives me serious reservations about the usefulness of access to the order book. Suggests some orders may be spoof to put off buyers and other way about. If price continues to rise in face of sell pressure then ignore it? But then how to know when to get out? End up just following the price! Less likely to be spoof nearer the touching price as would get hit. I may test this out.
Stop losses though I want to reduce them this does increase incidence of them - I think they should be tight but flexible - a share that is more volatile should have a wider stop loss, less volatile can have tighter. Will implement this.
My worst ever day trading - lost about £370. Nevertheless due to misleading Feed - had I gone by price I could have made over £1000. Need to revisit use of Feeds - it could be this particular feed or feeds in general.
Perhaps I will work without feeds too - in terms of entry can always make that based on price - stop losses will be in place - and in terms of profitable exits mental trailing stops.
Insight Enterprises - meets criteria, trading at historical lows. Price has tended to rise recently rather than undulate. Would buy up to $9.10 - close to end of day price but price was trending through it. 3Q earnings due 6.11. Bought at $9.10. Stop loss triggered. Bought again at $8.67 and made good the loss plus a small profit.
DSP Group - another share trading close to historical lows. Usually scopes across the day. Buy up to $5.50. Not much action in the queue - is this due to the feed I am now using? Q3 report released today which beats estimates. Should make this bullish but might need to be in at the bell for that? Learning! Another forecaster expressed negative sentiment towards their future. Price has currently gone beyond my price range. Vindication but means I have missed the boat? Could reverse. Price continued on towards 25% increase! Though I missed out on this I could still have made my PR at any time subsequent - but was that the benefit of hindsight or should I have paid more attention to the buy sell dynamics? Just because I missed a buy level does not mean the price may not go even higher - does not mean it will either but can watch buy sell pressure to gauge this.
Both these shares finished the day about 5% up.
Rent-A-Center - another share trading at historical lows. Ended up 10% yesterday. Seems seriously undervalued. If retraces many dollars to be made! Price doesn't always scope but due to huge scope down it may continue to scope until returned to usual trading levels. Disappointing Q4 forecasts have contributed to this fall. Buy up to $14. Directionless most of the day but did trend up in the afternoon - could have realized my PR. Lesson is not to dismiss a directionless share in the morning - if it continues like this in the afternoon then remove from watchlist.
Currently experimenting with a tighter stop loss to increase risk-reward ratio - at current settings 1 profit would equal 3 stop losses which is very good but obviously not if they keep getting triggered reducing the amount of profit stocks. Noise for example could impact at this level. Will test it though. Can adjust accordingly. Another option is a 1:2. First one got hit quickly!
Future will look to additional shares if shortlisted ones move against me. May also assess whilst market in place to target shares that meet my requirements and continuing it into the trading day.
Two shares I chose realized my PR requirement - one though in a way I was not able to capitalise on, another I need to pay more sustained attention to into the afternoon yet the one that did not was the one I bought. I need to think further about my final trigger decisions. The buy and sell pressure itself is not entirely reliable - or is it?! - do I need to read it better or is it more about working with pre-identified buy levels and only making the final decision when the buy pressure is significantly ahead of the sell pressure? But I have just indicated that is unreliable - is it unreliable though? - I need to assess this more critically.
Stop lossed out of this trade as gapped down overnight and then dropped further to stop-loss. Lost about £210. One lesson is not to hold positions overnight - I thought I would be safe with this stock because of its low liquidity - however enough trades can come in during this time to create unfavourable liquidity. Additionally this was the weekend so a far longer period. As it transpires my stop loss was the bottom and the price recovered a little. More importantly for me is the fact of picking another losing stock. This though will happen. It might suggest I should paper trade longer to note such patterns? I certainly need to think about my loss-reward ratio. I will enter all my trades from Money to iBank as it keeps a clearer record of profit and losses, and running account. Having done this I can see that in the main I have been successful - reached £2000 profit in three weeks so assuming last week would be equivalent to tax I would have made what I am currently earning and based on my first month - an impressive start. Beginners luck or am I a natural? Also in the context of difficult volatile bearish markets. Let's see whether the pattern continues with US stocks.
On one level profits vindicate analysis and losses are to be expected. Nevertheless learning from both to improve future stock selections makes obvious sense. Are there any common characteristics about winning trades? Of the losing trades was there anything that could have been avoided...for example a few of my recent losses were buying above my buy range - basic mistake. Once a buy decision has been made I must stick to it. Though also I need to improve buy levels - so that they generate the most profit - the lower they are the better the profits...but equally if set too low could end up below the low of the next trading day if overnight upward pressure.
Prudential - did not gap overnight and price remains within my range - currently sell pressure though. Bought and rose quickly but then equally fell again quickly - decided to pocket my profits as not taken any so far this week! I was only about .5% off my PR. Price actually turned around slightly but think it is better to take some profit then wait for such a chance and risk losing more/all profits.
John Wood Group - gapped overnight realizing my PR. Passed my buy-point. Buy was up to £2.20 and now £2.40. Still possible - watch. Currently sell pressure.
Charter - made 10% in first hour. An argument for being up at the bell? Now at £4.10 above my buy price of £3.80. MIssed the boat? Still buy pressure though. Still following its upward trend though but may have it its ceiling at this price level more attractive to sellers. Even here though it is below historical lows. Continue to watch. Also in terms of my minimum requirements only now need one third PR. Price slumped and stopped out. Had I bought at the opening I could have made up to 14%! I need to give myself the first few hours of the trading day to give myself more opportunities. For the first time I re-bought a share the same day and made the reduced make-good PR! Meant that I am £18 up on the day - better than being down!
This is my first loss on the day since 1.10 which is pretty excellent if I say so myself and should not give myself too much cause for alarm at this stage. Because of a subsequent re-buy and re-sell of Charter I have changed a loss into a neutral :)
Nevertheless I paid the price literally for buying over my set level. And I had an opportunity to buy under my set level early in the morning which had I taken I would have paid myself for the week. Live and learn :)
Price gapped over night (weekend) by 10p. Planning to buy up to £1.20's and now in £1.30's. So my PR was achieved but not in a way that I can participate in. Watch to see if price is retraced. Would then need to bounce from that and I would be doubtful. Watch.
Price declined a bit but overall rose and would have realized a second PR opportunity. Noted price remained steady or rose despite mainly sell pressure. I wonder if this is an indicator of off-book activity? Could be a buy opportunity - if price rises despite sell pressure...coupled with how market-makers position their buy and sell prices.
Need to consider further how I would use these. They lock in profit but not necessarily my percentage requirement - that is I could achieve my percentage requirement but then the price falls back and I make only a fraction of what I could have made even though it is profit. Is it better to have a mental stop loss on a trailing stop - I would prefer to watch the price when 3% has been met then watch buy and sell pressure towards getting out at about 3% or holding on for more. Revisit this and Google for other thoughts on this issue.
Need to explore whether trailing stop can be tightened as the price rises - I think it can and this would be the way forward.
Noting crossing of k and d lines a more consistent predictor of upswing the following day. Test this by prioritizing any share that meets this criteria alongside noting other current characteristics of the stock. Talvivaara Mining Company is an example of that 13.10 - watch it 14.10.
Today was a perfect illustration of the folly of ignoring stop losses - however perverse I thought the movement I should have just covered the loss and lost a couple of hundred, whereas now as it stands I would lose £500 and possibly more wiping out any gains made this week. Part of this was also to do with mis-reading the previous day share value - the close price was a spike and most of the prices were lower and by the time I joined the market on Thursday the price I required had already been passed - and so then should I.
One learning point is in future when assessing shares for buying I should check their overall value over the previous day not solely their end of day price. And then base my requirement on that and thus the following trading day I should only buy if the share is trading to a similar level of the previous day. Kind of obvious really.
As for the issue of stop-loss I need to give this further thought - luckily I am only paper-trading so I can learn from this experience without having taken a real loss. I do though at some point need to make a decision about stop-losses - whether I will utilise them or not. Because if I do then today it would have been triggered and I would have taken a manageable loss.
Issue too about price recovery levels - it matters not whether price likely to recover rather it needs to recover within 1 trading day - if I think that is unlikely then I need to exit stage left, including above my stop loss if need be.
The price dropped below the previous closing day price allowing me to buy even cheaper and needing a lower amount on the day to realize my requirement - which I did - and by 11.30! Take the rest of the day off! I suppose there will be days like this :) Reason I went out of the position rather than wait for any possible rise was though still buy pressure in the short-term there was sell pressure particularly to where the realistic price was.
Noted price subsequently went to 2.04 around lunch time - a near 6% yield - I would not have anticipated this but there may be some learning here. Price ended day down though.
My percentage requirement is definitely and unsurprisingly on reflection more achievable now I have access to Live Feed as before I was dependent on Open and Close prices only which clearly limited the pricing options open to me! Though having said that the use of Stop orders would also allow access to intra-day prices higher than day end.
Eurasian Natural Resource Corporation - gapped down over the weekend - due to selling down to £4.60 - a price low. Buy sell pressure is even so does tend towards buying. Watch for learning and interest.
Nighthawk Energy - down to 46p - even more value...Buy. 3% requirement achieved early morning. Still buy pressure so don't sell just yet.
I am pleased that again I have picked a profit stock but may not realise a profit for holding too long. I did this based on overall buy pressure but perhaps should have discounted those trading both sides of the market - then the pressure was to sell. This though is also learning.
There was also weekend news about mining and commodity stocks falling which also would have countered against ENRC. Stop loss for Nighthawk Energy triggered but will hold to recover misjudgment re profit exit. If I had a trailing stop I would have locked in profit e.g. would have sold soon as price dropped - so even though did not discount players on both side of market would have gotten away with it - had I done this I would hav made about £165. Against that is managing the exit by reading buy sell pressures. Today I made a loss doing that but because I did not discount those on both side of the market.
All of the above in the context of the FTSE 100's biggest ever points fall with not one stock in the 100 finishing up!
Xstrata - continued sell pressure though end of day was buy pressure but that could just be end of day effects. Less trading volume than day before and share price declined. I would need the price to reach about 18.41 Friday to justify holding the share another trading day. Noted big aftermarket buy orders down at 16.00 - with expectation of increase? Though I would not have been aware of this when making decision about 2.30pm. Price was 18+ on 1.10 so could return Friday. A number of orders have been placed low but equally a lot of high sell orders. Currently more buy orders so to get them filled they will ultimately need to raise their offers.
The decline in price is backed up by the sell pressure which is at odds with my TA. I cannot dismiss the TA in itself but it is becoming more regular - I am wondering if some of the signals such as Stochastic are more for trend and in terms of next day I need to focus further up (20-30) where buying is underway? Test this out. Decision is to hold share to sell out by recovering commission - so wait for price to recover to about 17.45. If not then will have to take some loss but less than stop loss. If there is sustained buy pressure I will stick with it if it rises about this level but will sell as soon as drops again. Will also look to purchase another stock.
HBOS - noted decline in trading volume 2.10 yet biggest climbing share of the day. Stochastic buy signal triggered and released! Closing price 1.70. Buy as low as 1.63 - concern any price lower may not recover on the day. Only need about 5p profit per share to make percentage requirement. Will watch buy and sell pressures to determine best exit point. End of day pressure is downward but would need to see situation around 9.00am after the end and start of day frenzies have subsided.
Mondi - this is a South African stock! Perhaps I should consider investment in that market :)
I now have access to US markets so this will increase the pool of shares whose data I have access to and can invest in. How much they differ to UK shares is to be seen. They are ahead in the economic cycles and likely to become bullish before UK stocks do.
Melrose PLC - price dropped so one score against Chaikin! Though need to test it more than once obviously.
Alfren PLC - not much movement on close though did rise during the day - specifically the early morning!
Clarkson PLC - dropped 70 points to 6.30! Clearly this is very poor - thankfully all of these three were only watched not bought. With latter had considered late on the scene.
Commercial Group Properties - a bad day has had to stop loss out of the trade due to a 6.11% drop on the day.
Compounded by the fact that the other trade Aquarius Platinum made 8.22% on the day and would have realised me about £500.
One option in future is to purchase both stocks but divide by day capital - however had I done that here I would have then profited by £250 which would have been reduced to £50 due to stop loss of other stock. Better to select the correct stock to begin with.
Aquarius Platinum is in a more bullish sector and perhaps I should have considered that instead.
Rio Tinto- buy as meets all criteria bar one and due to post big profits. In a bullish sector, Mining. One different criteria is that activity and cost both went up together but cost ahead of activity and a gap. Suggests non-UK interest too.
Compounded by the fact that the other trade Aquarius Platinum made 8.22% on the day and would have realised me about £500.
One option in future is to purchase both stocks but divide by day capital - however had I done that here I would have then profited by £250 which would have been reduced to £50 due to stop loss of other stock. Better to select the correct stock to begin with.
Aquarius Platinum is in a more bullish sector and perhaps I should have considered that instead.
Rio Tinto- buy as meets all criteria bar one and due to post big profits. In a bullish sector, Mining. One different criteria is that activity and cost both went up together but cost ahead of activity and a gap. Suggests non-UK interest too.
Toledo Mining - price closed as opened with only a ha'penny rise. A day with no profit and indeed slight loss due to commission.
Though my share picks aren't proving to be disasters in respect of price drops they are all netting very little income. I need to either apply my selections more rigorously and/or refine my parameters.
I am wondering if commencing searching via highest daily price rise is the best option? If not though, what?
Aquarius Platinum - meets criteria other than quite volatile. Mining is a bullish sector though. Concerns about Zimbabwe's political rather than economic involvement in companies investing and mining in their country. UBS raised assessment from Neutral to Buy. Watch.
Commercial Group Properties PLC - meets a lot of criteria - no News items though so not sure about driver. Buy due to volume change in relation to price rise.
Though my share picks aren't proving to be disasters in respect of price drops they are all netting very little income. I need to either apply my selections more rigorously and/or refine my parameters.
I am wondering if commencing searching via highest daily price rise is the best option? If not though, what?
Aquarius Platinum - meets criteria other than quite volatile. Mining is a bullish sector though. Concerns about Zimbabwe's political rather than economic involvement in companies investing and mining in their country. UBS raised assessment from Neutral to Buy. Watch.
Commercial Group Properties PLC - meets a lot of criteria - no News items though so not sure about driver. Buy due to volume change in relation to price rise.
