October 2008 Archives
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.
Citizens First Bancorp - Share finished down on the day but did reach a high above the previous day high. I would have considered £3.20 a possible buy point. And based on that I would not have bought because the price continued its rise then steadied and dramatically dropped in the closing 30 minutes. Difficulties following this though due to no access to Level II data and Intraday charts proving unreliable.
Cleveland BioLabs - last two days share has ranged - not always a characteristic. Crossed back the stochastic. 28.10 price rose all day. Buy up to £3.20. Price dropped back to £3.00 as of 12.41 US time. A spread of 44 cents! Would need to pay 3.44 to guarantee sale and that is above price range. Watch for learning. Also after $3.00 next bid is $2.84 - is this an aspect of this particular share, of NASDAQ or Total View? Liquidity is low - no transactions in over an hour. Spread is now increasing. How (un)manageable are wide spreads? Buy and sell is about equal currently. A buy order at $2.84 could drop the price - buy opportunity at that level? News item implying share price irregular and may be removed to a lower market listing! Would have taken 3% but price movement and volume offputting. The price increase yesterday was 56% (!) so less likely to have legs for the following day. Better to ignore share in that range. What range then? Trial and error. Will choose those with 10% yields and adjust by experience.
Steven Madden - meets criteria and price has been resolutely upward! Even buying later in the day would have met my PR. However I am making no purchases today as missed most of trading day due to feed access issues. Would I have bought at the level though - had I opted for a lower price entry I would not have made the trade because it has trended above it. With this trade though I could also say because it's price increase as been upward with no significant undulation I would have bought up to $19.50 and thus entered at $19.25 requiring £19.75 to meet PR. Price is now at $20.50 :) However I am not going to add this to my watch account because the day's price could have influenced my buying decision level. Buy price at $20.15 - with a mental trailing stop I could have got out about $21.50 and made nearly 7% or £490 :)
Citizens First Bancorp Inc - my first US share so I need to be mindful of different dynamics and my lesser knowledge of US companies compared with UK companies. Share is under-bought but there is downside as well as upside on current prices. Buy up to £3.20? Won't make any decision until/unless I have access to a US Level II feed. Not able to complete process due to provided feed not fully displaying data.
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.
Electra Private Equity - historical price low 22.10, stochastic followed and price rise today 23.10. Price can be quite stable over a day but since its sell off price more range. Steady climb today. No recent gapping. Could it continue that climb tomorrow? All buyers in the queue, not a single seller! Closing price was £9.90 whereas prices prior were up to £9.60. At £9.90 not convinced this share has much legs left at this time. Seems buyers are willing to increase their offers to attract sellers. Will watch for learning. If buy only up to £9.70. Equity Investment Instruments.
Legal & General - the share I lost £170 on Wednesday on! Crossed a stochastic today. Made steady progress this afternoon having plunged in the morning. Loss before was because I bought too high. If buy here up to 68p. Some big buyers in mid-sixties, no sellers after mid-seventies. Share price tends to move slowly.
Euromoney Institutional Investor - another share trading at all time lows. Stochastic today though lower down -upward movement, reverse may still be a few days away. Movement over a day can be small but last three have seen greater movement due to selling, buying to counter this could also scope. No sellers in the queue and buyers up to £2.39. Buy up to £2.44. Media. Bought at about £2.30 - very little volume. Will hold over weekend as only open position. Price closed at £2.30 with no buyers in the queue.
Legal & General - early morning auction fascinating. Also gone on beyond 8.00am and I thought that was market-start...noted many bids over yesterdays end of day price and many offers under it! See how that plays out! Noted on Intraday feeds for each of last 4 days for L&G the first 30 minutes seen huge price movements yet don't appear to be able to participate in this...now open at 8.05am. Bought. Took a loss of £170 on this share. Perhaps I should have stuck to my original rather than revised price point - had I done that I would not have bought this share today and avoided the loss - but that is also the benefit of hindsight. Need to analyse why.
Bellway - bought and sold- made my 6% requirement in about 30 minutes! Can take smaller profits in other stocks now.
Bovis - made the PR but I missed the boat - needed to have bought before 9.00am - however I did not see a buy signal. Price did return below my buy level but decided due to lack of time in trading day may not make good - though could make 1.5% PR. Will watch end prices for learning though.
The Restaurant Group - bought at £1.15 above my buy price but only because I had thought that was too cautious and also because not requiring full PR. Sold at profit! Nearly the full PR too but a quick spate of sellers caused me to hit the sell button at the highest ask. £440 profit including Bellway. Still have L&G to close off which looks like a loss - wait or cut the loss. Might even purchase Bovis late as price as dropped into my buy range.
Having made my 6% PR perhaps I should not have bothered making smaller PR's on the remaining shares. My thinking is that the share I chose was the one most likely too and the others despite the same averaging effects as waiting for the next day is perhaps less likely to achieve PR because a second or third choice - better to wait for the next day's first choice? Something to monitor. Certain would reduce commission and stamp duty costs.
Are the market-makers price positions akin to a support and resistance? They have more information than we and presumably will take realistic buy and sell positions?
Holding positions overnight - would a stop-loss protect a gap down? Google. Thinking about this for L&G - particularly as I am likely to close out the other two positions for a profit. A stop-loss does not protect against a price being marked-down overnight or a free-fall situation where there are no buyers only sellers. How often does that happen though? More likely for smaller companies. L&G are not going to be short of buyers! But L&G could suffer from a price mark-down overnight.
Still made £260 overall - due to three profits covering one loss.
Bellway - crossed a stochastic but been doing that a lot recently. Near historic lows. Does tend to trade solidly either up or down over the course of a day. Buy pressure in queue. Buy up to £4.50. Household Goods.
The Restaurant Group - all time low price recently, recent stochastic. Buy/sell pressure even. Buy up to £1.12. (Too cautious?). Travel & Leisure.
Legal & General Group - another all time low price. Stochastic cross. Can gap overnight. Buy pressure in queue - sells are not realistic. Could be an early morning surge if no overnight upward price movement. Buy up to 68p - again too cautious? Price has passed point at which I could buy. Wait for it to fall? With no immediate sellers offers will go up but will there be takers - how many people have shares to sell at this level that would make profit? Based on recent levels will buy up to 75p. Life Insurance.
Bovis Homes - all time low 20.10. Stochastic crossed and scopes on the day. Buy up to £3.10. First choice. Household Goods.
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 :)
Prudential - some fundamentals bounce but also like the TA too. 17.10.8 was also a price low - quite a lot of that at the moment. Very rangey so PR potential - also crossed a stochastic and already the biggest price riser 20.10! Huge buy pressure in queue too - most sells can be discounted too as from previous higher times. Difficult to judge buy upper limit even at £3.40 PR quite achievable. Closing price today was distorted by lack of sellers - buy price otherwise at £3.20. I anticipate buying of this stock overnight and price gapped up to £3.60. Would usually cause me to back off but feel this share has more miles to run. Life Insurance sector.
John Wood Group - all time low 17.10.8. Stochastic crossed. Rangey last 5 days. Price can be quite sedate then rise sharply - but also decline as fast! Buy pressure in queue. Buy up to £2.20. Oil equipment and services sector.
Charter - another share all time low 17.10.8! Usually not much scope intraday but there is currently as it seems to be making good its price loss in steady fashion. Price trended up most of last two trading days and plenty in queue waiting to buy. Buy up to £3.80. Industrial engineering sector.
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.
PV Crystalox Solar - meets all criteria. Can gap overnight. Crossed stochastic a number of times recently. Trading at historical lows. Only a few months ago it was trading at historical highs! Pressure in queue toward buy. Queue could push price up early and then price falls over course of day. Could wait till that calms down and see if returns to my price point - could try and get on the price early on but get stopped out quickly. Don't rate my ability to read the opening of markets. Will watch to learn. Buy up to mid 120's.
QinetiQ Group - an interesting stock for me as price seems to zigzag often - certainly for the last week- and a number of those up swings present PR opportunities. Difficult to read which blue signals are PR and which are temporary blip. Not if choose a buy point? Another share 16.10 reached its historical low. Share gapped up twice overnight in last week. Buy up to £1.66. Meets criteria but is volatile. Is price retracing overnight gaps or is price too oversold now for that to be realized? Might be one I should paper-trade? It is different when you realize it is real money - surprise, surprise! Just follow my rules as I have been doing to date - of course I will continue to pick some losers and others that go nowhere.
This share was picked by mistake because I was looking at an alphabetical list! Ignore.
Unite Group - price gapped up overnight beyond my price level to mid 180's. Those gains have now been retraced and price back to my buy level. However sell pressure in queue. Watch. Share continues to be sold off back it seems to its levels of yesterday which had been high 150's to low 160's. So it seems the gap has been taken where I lost my PR opportunity and now it is be reversed. Will not buy but continue to watch for learning.
In last hour would have made the PR and did note the opportunity however would not have made because of not likely to recover within the remaining time - as it happens it did but only just. I could have bought it with the idea of holding it to early next week as space for this open position. To think further about situations like this.
Traded so well this week can afford Friday off. Will watch one share though as much for continued learning. Rest of time if available will look at preparations towards setting up a broker account.
BlueBay Asset Management - price gapped down overnight and price now in mid 170's. Thought could be to do with macro-environment and indeed US and Asian stockmarkets fell - indeed plunged - and clearly this pattern is being repeated by the FTSE. Need to be mindful of this. Could take as opportunity of buy on Thursday sell on Friday? Risky strategy. Watch. Do not buy.
Mapeley - as above. Price fell into low £6's. Not many sellers at this point - buy? Buy pressure and meeting a wide spread - buying at spread realises my PR! The spread is about 5%! In such a situation I could look for this margin but also simply offer my 3% e.g. offer higher which also increases likelihood of being sold. However as I am paper trading this I cannot replicate that effect so will just watch at this lowest offer. Bought against spread - of course that has caused the price to drop but still no sellers at this level. I have purchased low based on both recent and historical. As I have made my money on the week I am prepared to keep hold of this share for a longer period as future positions allow. Price rose sharply - pattern of little activity followed by big jumps - revised trailing stop has locked in profit. Noting that all sell offers currently appear then disappear but no change in price. Price declined end of day and triggered my revised stop loss - cleared 9%! That is three days requirement in one transaction :)
Halfords - shared gapped down then need realise 3% quickly but whilst I was sleeping! Also it was brief and I might not have been able to react quickly enough even had I seen it. Price now dropped back to low £2.30's. Sell pressure in queue. These signs are saying 'Keep away'?! Kept away!
Greggs - also gapped down before recovering - my PR was in there - a case for being up at the opening bell? More buy pressure than sell but buy offers are cheeky low. All prices are below what I was prepared to ask! Price has recovered most of the gap so on a bearish day is there much extra gain left? Huge spread - most sell prices are much higher than price and close to my maximum buy. I should guard against buying any share close to my maximum on such a bearish day. Do not buy.
This will be a learning experience. Will any of these shares realise my PR's on a day like this. Is it best to si it out? Yes, better to make nothing then lose something.
An excellent and illuminating trading day for me and in the context of a free-falling FTSE.
Halfords - meets most criteria. Price under usual recent level. Price rose steadily today but pretty much recovering yesterday's levels. Would consider up to 2.45. My PR certainly achievable.
Mapeley - meets most criteria. An incredible early morning spike! Buy up to £7.10. Double-stochastic! Second choice.
BlueBay Asset Management - stock trading beneath usual levels - most recent stochastic cross. First choice. Can gap overnight though. Without todays spike price was very steady and not yielding very much at all. This is characteristic of a number of recent trades. Most gap up retraces a gap down so if it gaps down overnight it may get retraced before I have a chance - but if not then a chance to buy low and wait! One to watch as much for learning. Buy in mid 180's would give a PR it usually exceeds but has not in a number of recent days. Be guided by queue too.
Greggs - a £30 odd share! Trading beneath usual levels - buy up to £31.10. Reluctance is that price needed though having been reached it is usually brief and whether I am able at this stage to react quickly enough. Again will watch for learning.
As with stop loss should I be looking for a rigid percentage requirement? I need to decide and stick to this before I enter each trade which I will do via trailing stop but should there be variation based on likely stock movement?
Maximum open positions at any one time is 3 so even there that would allow one share to have 2% PR and another 4%. In theory I could have three as modest as 1%. At 1% though this has implications for stop-loss.
However my technical analysis is based on predicting likely upward swing not on how big that swing is. Certainly needs to be developed and revisited overtime.
Dragon Oil - bought and sold to a profit within a few hours. Already met minimum for the day so can be even more conservative for other two shares!
JKX Oil & Gas - price fell back today below my buy point so bought. But queue indicates sell pressure so perhaps today I should have waited for that to reverse before buying. Bought too soon. Stop loss in place. On reflection the price increase yesterday was great and not too surprising that it has ran out of steam today - though also today is back to swimming in historical lows - nevertheless we are in a critical time and further lows may yet be to come. I could have foreseen this downward pressure based on queue dynamics and should have left alone. Then I would have one positive on the day whereas now I will have a positive and a negative and end neutral.
DTZ Holdings - can buy at a number of price points - had gapped up today but still at a level when could be bought. Currently sell pressure in queue. Watch. Very little activity currently - price not picking up - not positive that the gap will be covered and bounced within the trading day.
Yamaha Gold not available - explore why that is. A Canadian stock - not indicated by Sharescope. Be careful with this.
Wednesday has seen the FTSE lose ground so would expect less pickings.
JKX Oil & Gas - meets most criteria - not now so underbought. Climbed smoothly enough over the day. Closed at 2.33 would need to get to 2.40 to meet my requirement. Usually trades above that only in last 5 days as it traded under that. Noted also stochastic crossing and bigger than usual increase today backing that up. Buy pressure in the queue.
DTZ Holdings - as above. No action in the queue. Volume declined yet price increased. Lower down the Stochastic. Closed at £1.02 but most of that increase through the 90's at end of day - prior had been trading mid-eighties. When price has increased has tended to be sustained. Could therefore be bought at a number of price levels. Price tends to undulate in a predictable fashion - today's recent price will either then continue up or be a one-off-spike. Watch.
Dragon Oil - traded before with this share and failed to realize any profit. Is trading under price though some sell pressure in the queue but higher than current price. Had been trading in 150's during day only last hour or so it climbed into the sixties - might be running out of momentum. Watch. Buy in 150's.
Yamaha Gold - recently crossed stochastic. Under usual price range - in fact yesterday was all time lowest point! Low volumes - price today moved progressively upwards. No action in queue. First choice. Buy up to 3.60.
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.
Talvivaara Mining Company - gapped overnight to £2.05 then rose to £2.20's before setting back at £2.10's. My buy level has been passed - should I wait to see if it retraces (unlikely) or buy at higher price or ignore?
Schroders - gapped up to £8.40 then continued rise up to £8.80 - so as predicted but again too late to take advantage due to overnight market. Also adds to the saying I have heard bulls at night, bears during the day.
Heritage Oil - bought at £1.79 and price climbed quickly! With trailing stop made me 6% double my requirement for all three shares for the day - nice.
Additionally Afren returned to the level I bought it at and even passed into 60's again - sold at 61 and made £200 - so a paper loss but actual profit. However this is an atypical share as I would not have bought it at the price I did - I only kept hold of it to make good my mistake for learning. In a real situation I might not get that opportunity.
Standard Chartered - again gapped overnight and passed my buy target - however all four shares I selected were correct and all met my percentage requirement - not just that but exceeded it!
Should I monitor the other three - may as well for learning - and my other positions are closed so I can reinvest. Have some interest in Schroders as though now at £9.00 it usually trades above this level and made £9.00 yesterday at peak. Monitor. However at 9 would need £9.27 and has not always achieved that recently. Schroders movements may be due also to the fact it has been added to the list of companies who cannot be short-selled. Note this also includes Standard Chartered! Schroder price now up to 9.10 at 1pm - there is buy pressure but my observation is that this is not a reliable indicator and the pressure is slight - I will observe towards learning. Share actually reached £9.30 but I would have been taking a punt on that. I could only purchase at levels identified and where passed share to be removed from watchlist. Only a few hours to days trade close so hardly unlikely any of these shares would drop to those level then recover to my percentage requirement!
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.
Shroders - meets all criteria - lower on the Stochastic - trading beneath price of last few months. Rangy today but mainly due to closing price distortion of £9 on the day - most of day trading around £7 moving up to £8 in last hour of trade. Buy pressure in the queue both short and long. As the opportunity been taken away in the end of day trading shenanigans? Buy up to £7.50 if proceed.
Standard Chartered - higher up the Stochastic - more likely to be gapped? Trading below most recent levels. Volume declined but price went up. Rangy stock. Price increased consistently across the day from mid-11's to high 11's. Buy pressure in the queue - most sellers in the queue are waiting for higher levels with positions held up to over a month. If bought at 11.80 would need to sell at 12.15. All sellers in queue are wanting higher than this. The level of 12.15 has always been achieved every day for the last few months other than these last two days. Monitor early morning activity.
Heritage Oil - inbetweener on the stochastic. Price ranging recently and trading below recent levels. Price edged up on the day from £1.70 to £1.85 before dropping back below £1.80. Buy pressure in the queue but in terms of the spread short-term could drop. Buy up to £1.79.
Talvivaara Mining Company - an example of Stochastic crossing - buy up to £1.97 - buy pressure in queue. Cannot believe one indicator alone can point this - time will tell! - but certainly if alongside other indicators as here then it might be.
ITV - still trading above level required - buy pressure in queue which means price may not drop back to 36. Monitor.
Wincanton - percentage requirement reached in early morning trade - gapped up - now trading in low 200's having reached 214! Buy and sell now even in queue - do not buy but monitor.
WH Smith - another share that has gapped - so as with Wincanton my stock-pick was correct but closed market-practice has conspired to keep me out. Now trading in 350's having reached 360's. Again monitor but only buy up to 3.42. Pricing dropping back but unlikely to be reached.
Even ITV gapped up - I need to explore this further as this is causing my predictions to fail because I am not able to take advantage of the predicted rises.
Next batch of picks to include some more over-sold ones - have a mixture has suspicion those on way up stochastic are more likely to become gapped.
Wincanton - back on my radar - only last week netted me profit by noon! And meets criteria again. Need to be bought up to 1.94. More buy pressure in the queue. Doubt is that a few days in the last five it has not made the required profit level.
WH Smith - due to selling spree in general this share still to be considered - buy up to 3.42.
ITV - meets criteria. Price has been unusually rangy recently and beneath usual price range for last week. At this stage though I do need to consider the macro climate - there is selling fever currently so certainly no guarantee that any share will rally to even its usual lowest levels. Need to pay attention to news over the weekend in respect of the G7 meeting and other financial news items. It closed at 37 but that was high on the day - had been trading 35/6. If bought would need to be at that level. A penny at this level realises my requirement! Trades will move in quarters. Buy pressure in the queue. It should trend up at the beginning of the day but that is above my buying level - also those early pressures may be ironed out in the morning auction. Look to buy up to 36 subject to buy and sell dynamics.
This relates to my required profit levels. Ideally I would want a situation where when I have had more profits in a week than losses I am in a profit. If the stop loss level is higher than the required profit level then this will not be the case.
However a lower profit level is more achievable but if for example I had 4:1 on a week and that was the minimum I required that is putting a lot of pressure on my stock-picking.
The lower the stop-loss the greater likelihood it will get triggered. The higher it is the less likelihood but a greater loss will be sustained if it does get triggered. Also even when it does not get triggered the loss itself is still sustained. But against that the higher the percentage requirement the less likely it will get realized, the lower the more likely. I want to increase the number of profitable trades whilst reducing the losses on the inevitable losing trades - whilst keeping the number of losing trades as low as I am able. The latter is solely about my stock-picking skills, the former is about managing entries and exits. The former can be made more efficient and effective by stop orders though the entry points also need to be more mindful of the previous day's trading levels.
I need a balance between reducing loss amounts whilst not triggering too many stop losses e.g. where the share is triggered then bounces back up. I will make wrong selections regularly so should formalize the loss level and relate it to my profit requirement. I could even change it based on my recent profit performance e.g. last 10 trades. Stop loss though does not allow for a neutral outcome - either I will achieve profit or loss. A neutral or minor loss e.g. £20 for trade would not impact my profits in a significant way. Neutrals can be triggered when the stock is in profit but is not going to meet the percentage requirement then I exit as high as I can above the buy price. Trailing stops help here as lock in profit as it is made. A trailing stop and a stop loss mean I don't need to watch the market - as if the price rises profit will be taken, if it falls loss will be minimized. I then only need to watch last 90 minutes or so of the day where neither outcome has been triggered and exit myself between those two ranges. As the books say I don't then have to second-guess minute by minute market movement and remove emotions such as fear and greed from the equation. This is something better to see on a live account but I can replicate on paper by entering the entry and exit levels as I do on Money but always keeping to them - and for the trailing stop can replicate by sticking with a share when it passes my level but automatically sells as soon as it falls a percentage back.
If trading a third of my account on any given stock then my requirement will equal the stop loss - as I am working towards more winning trades than losses does that matter? Could increase the profit requirement to adjust for slippage, changing performance, relation to stop-loss - but that can be developed over time. Stop loss could be reduced to 0.9% for example - do advise best not to go for 1%...I could adjust percentages to deal with situation when had 3 profits for 2 losses so that those weeks are profitable too? You could make stop losses so low they are almost neutral but then also reduce the number of profits in a week. I think that is better than trying to make 3:2 scenario profitable as in effect that is trying to make the surplus 1 profitable trade per week profitable over the week which is very unrealistic. Whereas take neutrals or marginal losses then 2 wins over the week can end profitable let alone 3. Simply don't entertain losses - zero tolerance - you lose you out of here!! You have to allow some drop though for the general up and down of buy and sell but as said as low as possible.
If stop-loss considered too tight in terms of points I have the option of increasing the stop-loss and reducing the traded amount accordingly e.g. if double stop-loss point then halve trading amount, this then ensures the stop-loss as a percentage of my overall account is not breached. Alternative is to avoid trades where I would need to do this.
Will revisit profit to stop loss ratio based on experience - that is towards increasing profit level and reducing stop-loss level - with more room obviously for improvement on the profit side.
Could also set level based on how stock usually fluctuates e.g. if usually fluctuates 5% no point setting stop loss to 4%.
Will now give consideration to setting stop-loss based not on a rigid percentage or sterling amount but based on the likely volatility of that stock based on previous days performance. To be decided how many trading days this to reduce triggers from market-noise but will still be based on reducing losses. So for example 1% of overall trading account could be the outer level but I may go tighter than that if I believe the stock should not fluctuate that far. As a novice trader I will to begin with start with a conservative overall stop-loss level but if successful then I would look to bring that in up to 3% possibly even 4%. I also need to be mindful of my profit percentage requirement as if stop loss larger than that then this also could impact overall profitability.
I need to clarify my views on stop-loss - should I always apply them? And if so at what level - and whether fixed or variable. Also whether the amount should be a cash-amount or a percentage. I need to think further the relation between the stop-loss amount and my percentage requirement and what is sustainable over a weekly and monthly period.
I also need to improve my management of entry and exit levels. The latter itself overlaps with stop-loss. The entry is about being more level than the previous end of day prices - I need to check their Intraday movement to see whether the end of day was a spike or typical of the day's trend. Then the following day I need to check whether there has been any significant shift in price over night or weekend. If for example the shift has been up and has taken care of my percentage requirement then don't buy the share unless it falls back e.g. if gap or spike was a temporary blip.
Some days it is better not to trade - better to make no profit and thus no loss then taking a risk on a trade which I am unable to read. I could only do that a maximum of 2 days in the trading week or up to 9 in the trading month. Also more able to do that when taken profits earlier in the week, less wise for example to do this on a Monday - but some time that will be unavoidable. Also if doing this over a month then could say more able to do this end of the month than the start - whichever cycle I work off.
I take on board that I am paper-trading in bearish and volatile possibly catastrophic times and it may be better to watch this out - though at some point I will need to get my toes wet.
I will not be commencing part-time trading at this time as I think I need further learning and experience of managing entry and exits. I am pleased though with my stock-selection skills to date. I am at a stage where I will review this decision on a weekly basis.
Afren - FTSE fell 10% in first minute of trading - biggest falls this week in history of FTSE! Need to factor panic selling and rationale selling into my decisions. Share fell into 40's - rallying slightly into low 50's. What to do with this share? Have we hit the worse today or is the worse to come. Need to decide whether to hold or sell this share today. More buy pressure in queue but again if buyers are more calm and sellers not this may not make much difference. 9.37pm noted no sellers at all at the then current price - could have reached a bottom? No still bobbing about high-40's, low-50's.
WH Smith - more sellers than buyers marginally - price into mid 30's - continue to watch, review to buy hourly. Don't buy as price seems to have flat-lined.
WH Smith - Meets criteria and posted good results today. Marginal buy pressure in queue. Price floated in mid 340's today - would need to get to about mid 350's to realise my requirement which is an area it usually trades above. Would need to get out of Afren before purchasing.
Afren - was ranked about 2700 for the day - having lost over 18% - leaving aside how I managed the entry and exit it is quite a knock for my stock-picking formula. Decision tomorrow is even if recovers not likely to be by 6% plus - at least if break even or lose a hundred or so...thus need price to get to .58 - may take the afternoon to do that. Have two open positions? Will ensure am there at the market open as that could offer opportunities of recovery too. As per previous Afren post the issue is less about my stock picking formula and solely about the price I purchased at - had I paid attention to yesterdays prices I would have seen the 3% requirement had in fact been achieved due to gapping overnight which holds up my selections but means I should not have purchased the share. Either looked for an alternative or taken the day off which I was in a position to do.
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.
Afren - entered an alliance with Sojitz Corporation - will the shares respond to this news today or was the response yesterday to the rumour? Close yesterday was a spike which has been ironed out in morning trade - price now remaining steady between 58 and 60. Huge buy pressure in queue but some buy pressure was earlier in the day and may have missed the boat - even if realised would need the price to fall. Definitely worth considering. Price currently trading beneath yesterday's end and thought I could realise 3% off that - now would need to reach a level it has reached in all but one day recently. Buy. Note a lot of buyers but price not rising - also those working both sides of the market are Sell at 61 - is this a ceiling or will it change. Again for learning observe. Note price continues to fall despite buy pressure - I am going to take this one on the chin and wait it out for the sake of learning. Might be the nature of the buying and selling - the buying was cool, cheeky, unrealistic whereas sellers weren't holding out, panic selling so though more buyers which should have had up pressure because the buyers were more ready to wait the price has gone down. Question is why though - these shares are under-valued and there has been recent positive developments. Perhaps a casualty of overall market bearishness. I am going to wait out the last half-hour and will hold overnight. I might then look for a double-yield to make good today's nonsense. I don't expect the price to recover to the level I require today but it certainly could tomorrow - time will tell - it's all learning! Note price for much of yesterday was ranging between 45 and 50 - the end price was a spike. The following day I had already missed the momentum and buying passed the high and so should then have passed on this purchase. Should I take the loss now - feeling is should wait out to Friday as more spiking could re-balance the price. However it could drop even further and then stop loss would have been needed and a demonstration of how easy it can be to lose a lot more when not using stop-loss. In this situation in the future if I believe it has recovery within up to 5 days I could always open a second position - though increased exposure, increased risk...
Headlam Group - more sell pressure - may have already reached the sell-point I was targeting.
Afren - range on day can be small, price though beneath recent prices and meets other criteria. Huge spread in queue but imagine the sell item was made in different circumstances - certainly not realistic currently - meaning buy pressure. Watch.
Headlam Group - huge buy in queue - likely to cause an early morning hiatus but then could subside. Should achieve the 3% I require. Watch.
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.
Bloomsbury Publishing - meets criteria but price is peaky - to realise my requirement it would have to achieve a recent end of day high.
Wincanton - meets criteria. Is at bottom of recent price but doesn't always range on the day - my requirement has only been achieved twice in the last 6 trading days. Queue has a couple of sellers and no buyers...watch.
Will not buy any shares if I don't identify any that meet my criteria.
Playtech - price did spike on queue but has now settled much lower - down to 4.04 before recovering to 4.13. Is current buy pressure but if discount those buying both sides more buy pressure. Quite a spread.
Legal & General - price steady but more sell pressure.
Currently favouring Playtech but will exercise option not to purchase at all. Buy Playtech. Price moves slowly - easier to read at least.
On further reflection the Stochastic did indicate share becoming over-bought and up pressure for a number of days it was likely to run out of steam and it looks like today is the day - exit this stock without profit?
Sold for just under 4% profit - nice :) At one stage it looked like I would have to take a small loss with not much movement, then later getting out even but for a period in the last hour the price rallied quickly.
Playtech - Meets most criteria - a lot of buyers in waiting - quite a spread though! Needs to make about 13p to make 3% - has done that for last 5 days. The queue suggests a very clear buying opportunity but concerns over liquidity of stock. Also maybe overall overbought.
Legal & General - price fell marginally today - volatile share in terms of day price ranging, some buy pressure in the queue. Would need to make a price it has not reached end of day for last three days.
Both I will watch and both are interesting in terms of learning. Will watch Playtech's early trade first then join L&G after the early morning shenanigans.
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!
Eurasian Natural Resource Corporation - Meets all criteria. Buy sell pressure end of day was 5.49 to 5.60 with buy more but that could be end of day orders. Noted a possible multi-billion dollar loan was not made to this company - ambivalent whether that is a positive or negative in these frozen-credit times.
Nighthawk Energy - meets criteria too. Volume though much smaller - buy pressure favours it over ENRC. Needs just one and half penny to get the 3% required. I am tempted to buy this share just to observe the dynamics of buy and sell of less actively traded shares - easier or more difficult to read than more actively traded shares? I would speculate that the effects of slippage are diminished which for a novice trader like myself protecting smaller margins makes such shares value-added. As ever only way to find out is to observe and learn.
Noted a number of news-stories recently that have caused the company in question's share price to rise - contrary to the oft commented point that markets respond to rumour not news - I understand this sentiment but I guess sometimes there will be news-stories where there was no preceding rumour and thus in those cases the stock-market will respond to the news-story.
Access to the Live Feed indicates whether they are responding or not and if so positively with buy pressure. What this doesn't inform is to what extent the price will rise and its timescales - for the latter it could be blink and miss it. However a quick TA can inform whether to buy or not.
In these instances should I make another stock purchase where I have already an open position? Should consider this - firstly by paper-trading the proposal.
Xstrata - price so far today has either declined or recovered only to closing price of 2.10. I also breached my stop loss limit but then I bought too high based on not reading the sell sign - take the loss (fortunately a paper one!), learn the lesson and move forward.
HBOS - price rising - bought at 1.80. Sell out at 1.85 + determined by buy/sell pressure. To take 6% and make good Xstrata loss would require 1.91. Sold at 1.97! Making 9% and £527.25 which also made good the loss from Xstrata. A good day!
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.
This has priced up overnight. It closed on 17.16 and I was looking to buy based on 3% rise to 17.70 ish but price has gone to 18.45 though has fallen back to 18.20 ish. Is it worth watching now? May still watch the price feed for the sake of learning.
Xstrata announced not to buy Lonmin at this time - I thought this would cause sell pressure on the shares but according to news item likely to cause buy pressure and sell pressure to Lonmin. Uncertainty is removed and it may now return to previous value. Continue to watch.
Bought at 17.37 as beginning to rise again - though subsequently dropped - note there is more sell pressure on this so perhaps I should have left alone until buy pressure (real as oppose to temporary upswing) kicked in? It is all learning and I will stick with this share for a day or two as I believe under-priced and will go up - when rather than if. It is fascinating and illuminating watching the price-feed in realtime!
Also note that markets react to rumour not news so would have priced up prior - as indeed upswing shows - before pricing back down. At 3.45pm price has dropped below 17! As sell pressure was indicating!
Ended down on previous day's close but with more buy pressure - not sure though whether that is an end of day effect - will watch opening trade tomorrow by way of learning. No reason why should buy at day start and sell toward day end - as long as transactions are within about 24 working hours of each best time to buy and sell is to watch and transact accordingly.
Had I stuck with sell pressure I could have bought for less than £17.00. But still early days as I don't know yet from experience whether the temporary upward spike usually then resorts to buy/sell pressure trend - watch and learn!
