bigbadboot
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Can I ask why you stopped trading those stocks?
Boot's Trading
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Can I ask why you stopped trading those stocks?
barjon
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No fundamentals for me. Just looked at the charts - the weekly is not a bad place to start and look for relatively smooth moves up and down (series of higher highs, higher lows and vice versa) without much leaping about. Then move to daily to see how it looks there. I don't bother much about sectors, although you often find your stable becomes a bit "sector packed" when a particular sector is going well or vice versa.
jon
PokerBrat
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I don't think anything is "untradeable", but I do think you have to listen to what the chart is telling you, rather than try to find what you are looking for. This is probably the hardest part of trading for me - waiting for trades to come to you rather trying to find them in everything you look at.
I think in some of the stocks you have on your shortlist, the charts are telling you different things than your indicators are, and you need to look more carefully at the longer-term picture before you look at your short-term indicators.
For example, DRX has bounced off 500 three times recently, so it has good support here. Moreover, the 500 level has historic support from back in Jan 08 and Jan 06. So it is going to take a lot to get the price down below this level. So given that, shorting this stock at 575 is high risk/low reward. Not the kind of trade I like.
Furthermore, each time DRX has bounced from 500 it has made a lower high. So this is now showing a descending triangle pattern, which means that there is very little room for the price to move before it hits support or resistance. When a share price gets pinched like this, it usually whipsaws inside the triangle until it breaks out violently in one direction or another. So taking a position inside this triangle is again high risk/low reward.
For me, DRX is no longer trending and I would not be looking to go short on the latest bounce just above strong support and inside the triangle. Instead, I would be looking to trade the breakout by waiting to see which direction it takes and then going long/short.
So this is now on my watchlist. Thanks for the tip!
I think in some of the stocks you have on your shortlist, the charts are telling you different things than your indicators are, and you need to look more carefully at the longer-term picture before you look at your short-term indicators.
For example, DRX has bounced off 500 three times recently, so it has good support here. Moreover, the 500 level has historic support from back in Jan 08 and Jan 06. So it is going to take a lot to get the price down below this level. So given that, shorting this stock at 575 is high risk/low reward. Not the kind of trade I like.
Furthermore, each time DRX has bounced from 500 it has made a lower high. So this is now showing a descending triangle pattern, which means that there is very little room for the price to move before it hits support or resistance. When a share price gets pinched like this, it usually whipsaws inside the triangle until it breaks out violently in one direction or another. So taking a position inside this triangle is again high risk/low reward.
For me, DRX is no longer trending and I would not be looking to go short on the latest bounce just above strong support and inside the triangle. Instead, I would be looking to trade the breakout by waiting to see which direction it takes and then going long/short.
So this is now on my watchlist. Thanks for the tip!
bigbadboot
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Evening all.
Looks like I have 7 trades currently open (all shorts)
IHG shorted at 551.8 it isn't doing much so will exit the trade tomorrow. Looks like I could break even on this one.
WPP shorted at 364.4 it's gone a bit flat and could be entering a trading range. Again it could break even.
AV shorted at 404.4 keeps bouncing off resistance around 435 but doesn't seem to want to fall. There's a nice ascending triangle forming so I'll close out this position. It was showing a small profit at the close on Friday.
PRU shorted at 373.3 looks like the trend could be changing direction. Hit a 20 day high last week. Will close this trade. Was showing a small profit on Friday's close.
PFC (from the current stable) shorted at 332 on Thursday. Looks ok at present. The risk:reward isn't all that great. The pull-back last week was on gentle volume. Aiming to close £6pp at the target of 288 and let the remaining £5pp run.
AHT shorted at 37.2, will tighten the stop to 41.5.
RCP shorted at 901, will tighten the stop to 950.
The only signal I have for tomorrow is a short at 1455 on RIO. However there was fairly heavy buying volume last week on the pull-back and the currently volatility on this stock means my position size would be too big given its not a really strong trade. I'll skip for now.
For the time being I'm going to keep a rotating stable of stocks, if only to see what the turnover rate is like.
Good night and good luck tomorrow!
Looks like I have 7 trades currently open (all shorts)
IHG shorted at 551.8 it isn't doing much so will exit the trade tomorrow. Looks like I could break even on this one.
WPP shorted at 364.4 it's gone a bit flat and could be entering a trading range. Again it could break even.
AV shorted at 404.4 keeps bouncing off resistance around 435 but doesn't seem to want to fall. There's a nice ascending triangle forming so I'll close out this position. It was showing a small profit at the close on Friday.
PRU shorted at 373.3 looks like the trend could be changing direction. Hit a 20 day high last week. Will close this trade. Was showing a small profit on Friday's close.
PFC (from the current stable) shorted at 332 on Thursday. Looks ok at present. The risk:reward isn't all that great. The pull-back last week was on gentle volume. Aiming to close £6pp at the target of 288 and let the remaining £5pp run.
AHT shorted at 37.2, will tighten the stop to 41.5.
RCP shorted at 901, will tighten the stop to 950.
The only signal I have for tomorrow is a short at 1455 on RIO. However there was fairly heavy buying volume last week on the pull-back and the currently volatility on this stock means my position size would be too big given its not a really strong trade. I'll skip for now.
For the time being I'm going to keep a rotating stable of stocks, if only to see what the turnover rate is like.
Good night and good luck tomorrow!
rathcoole_exile
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i just find it "easier" to trade the index futures - no insider dealing, no profits warnings, no price manipulation, no analyst downgrades, virtually no fundamentals, no liquidity and fill issues
(Ok, you do get all of those, but diluted across 500 companies)
if you've never traded them, i recommend looking at a demo account on the mini-Dow, (YM) or the e-mini S&P (ES)........ you might enjoy
bigbadboot
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Good morning.
My paper trading account begins the week with £9,119.20 in cash plus £16.00 in open trades (Friday's close) after last week's losses.
Today I have closed the trades in IHG (-£46.00), WPP (-£34.00), AV (£161.00) and PRU (£53.70) giving a total profit of £134.70 on those trades.
The remaining open trades are as follows:
PFC; £146.30 (stable)
AHT; -£63.00 (FTSE250)
RCP; -£75.00 (FTSE250)
Total on open trades is £8.00 profit.
Friday close: £9,119.20 cash, £16.00 open trades: £9,135.20 total
Current: £9,253.90 cash, £8.00 open trades: £9,261.90 total
My paper trading account begins the week with £9,119.20 in cash plus £16.00 in open trades (Friday's close) after last week's losses.
Today I have closed the trades in IHG (-£46.00), WPP (-£34.00), AV (£161.00) and PRU (£53.70) giving a total profit of £134.70 on those trades.
The remaining open trades are as follows:
PFC; £146.30 (stable)
AHT; -£63.00 (FTSE250)
RCP; -£75.00 (FTSE250)
Total on open trades is £8.00 profit.
Friday close: £9,119.20 cash, £16.00 open trades: £9,135.20 total
Current: £9,253.90 cash, £8.00 open trades: £9,261.90 total
Last edited:
bigbadboot
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Just a quick update. I've been reviewing my risk and decided to reduce my holdings in AHT and RCP.
Close £24pp on AHT: realised loss of £21.60; remaining short @ £11pp
Close £2pp on RCP: realised loss of £60.20; remaining short @ £1pp
The reason I am doing this is that they are both FTSE250 stocks and I want to keep a positon but limit my risk to 0.5% of total capital.
Sorry for fannying around!
Close £24pp on AHT: realised loss of £21.60; remaining short @ £11pp
Close £2pp on RCP: realised loss of £60.20; remaining short @ £1pp
The reason I am doing this is that they are both FTSE250 stocks and I want to keep a positon but limit my risk to 0.5% of total capital.
Sorry for fannying around!
bigbadboot
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Update (closing prices)
New open trades:
None
Closed trades:
AHT; -£21.60 (partial close)
RCP; -£60.20 (partial close)
IHG; -£46.00
WPP; -£34.00
AV; £161.00
PRU; £53.70
Total= +£52.90
Open trades:
PFC; £160.60
AHT; -£9.90
RCP; -£28.10
Total= +£122.60
Friday close: Cash = £9,119.20, Open P/L = £16.00, Total = £9,135.20
Monday close: Cash = £9,172.10, Open P/L = £122.60, Total = £9,294.70
Change on Friday's total = +£159.50
A good day overall. I scaled down my positions in AHT and RCP earlier as I didn't want so much risked on FTSE250 stocks.
I'll see if I have any set-ups for tomorrow a bit later.
Hope everyone had a good day.
New open trades:
None
Closed trades:
AHT; -£21.60 (partial close)
RCP; -£60.20 (partial close)
IHG; -£46.00
WPP; -£34.00
AV; £161.00
PRU; £53.70
Total= +£52.90
Open trades:
PFC; £160.60
AHT; -£9.90
RCP; -£28.10
Total= +£122.60
Friday close: Cash = £9,119.20, Open P/L = £16.00, Total = £9,135.20
Monday close: Cash = £9,172.10, Open P/L = £122.60, Total = £9,294.70
Change on Friday's total = +£159.50
A good day overall. I scaled down my positions in AHT and RCP earlier as I didn't want so much risked on FTSE250 stocks.
I'll see if I have any set-ups for tomorrow a bit later.
Hope everyone had a good day.
bigbadboot
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Hello again.
Tomorrow's set-ups here.
I still have a short signal on RIO and with today's price rises the risk:reward has improved. However even at £1pp I'd still be taking on almost £150 of risk which would be about 1.6% of my (paper) capital. Therefore I am going to take a £2pp short on LMI which will give me more liquidity on my trade and is only risking about £100. (unsurprisingly I have a sell signal on XTA too but chose the LMI as the risk:reward looks slightly better)
There are also short signals on LII and HMSO but the risk:reward doesn't look worth taking the trades just yet.
DRX made a new low today so stays in the stable for now.
Tomorrow's set-ups:
Short LMI @ 695; stop 747; target 556-537.
Current open trades (all short):
PFC shorted at 332 (£11pp); stop 345 (tightened); target 286-282. Currently 317*
AHT shorted at 37.2 (£11pp); stop 41.5; target 30.0-24.8. Currently 37.5*
RCP shorted at 901 (£1pp); stop 950; target 801-790. Currently 922*
*LSE closing prices
Tomorrow's set-ups here.
I still have a short signal on RIO and with today's price rises the risk:reward has improved. However even at £1pp I'd still be taking on almost £150 of risk which would be about 1.6% of my (paper) capital. Therefore I am going to take a £2pp short on LMI which will give me more liquidity on my trade and is only risking about £100. (unsurprisingly I have a sell signal on XTA too but chose the LMI as the risk:reward looks slightly better)
There are also short signals on LII and HMSO but the risk:reward doesn't look worth taking the trades just yet.
DRX made a new low today so stays in the stable for now.
Tomorrow's set-ups:
Short LMI @ 695; stop 747; target 556-537.
Current open trades (all short):
PFC shorted at 332 (£11pp); stop 345 (tightened); target 286-282. Currently 317*
AHT shorted at 37.2 (£11pp); stop 41.5; target 30.0-24.8. Currently 37.5*
RCP shorted at 901 (£1pp); stop 950; target 801-790. Currently 922*
*LSE closing prices
bigbadboot
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Hi folks.
Thought I would post a chart up of tomorrow's LMI set up.
I've added a few drawings to explain what I am doing (sorry if it looks a bit messy...got a bit carried away with myself).
The red arrows are showing the main trend. A downward sloping long moving average and lower highs and lower lows using a simple 20 day high-low channel (the thick pink lines)
The next thing I do is wait for the stock to pull-back to the 5 day high-low channel (the thin pink line) which I have marked with a yellow arrow (not sure you can see it too clearly).
The price is now in the “trading zone” and I just have to wait for confirmation with the breakout of the previous day's low (blue line). Place the stop above the 5 day high (horizontal red line) and target for the 5 day or 20 day low (green rectangle).
I'm a little concerned with the rising buying volume on the recent pull-back (turquoise line) and the general market direction of the FTSE, that's why I'm only risking 1% on this trade.
Thought I would post a chart up of tomorrow's LMI set up.
I've added a few drawings to explain what I am doing (sorry if it looks a bit messy...got a bit carried away with myself).
The red arrows are showing the main trend. A downward sloping long moving average and lower highs and lower lows using a simple 20 day high-low channel (the thick pink lines)
The next thing I do is wait for the stock to pull-back to the 5 day high-low channel (the thin pink line) which I have marked with a yellow arrow (not sure you can see it too clearly).
The price is now in the “trading zone” and I just have to wait for confirmation with the breakout of the previous day's low (blue line). Place the stop above the 5 day high (horizontal red line) and target for the 5 day or 20 day low (green rectangle).
I'm a little concerned with the rising buying volume on the recent pull-back (turquoise line) and the general market direction of the FTSE, that's why I'm only risking 1% on this trade.
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bigbadboot
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Good morning.
Mid-morning update.
LMI looks like it gapped down but then recovered to my target of 695 so it's open as a short.
Current open trades:
LMI; short @ 695 (£2pp); 681.8; £26.40
PFC; short @ 332 (£11pp); 319.4; £138.60
AHT; short @ 37.2 (£11pp); 38.1; -£9.90
RCP; short @901 (£1pp); 930.6; -£29.60
Total open trades= +£125.50
Monday close: Cash = £9,172.10, Open P/L = £122.60, Total = £9,294.70
Current: Cash = £9,172.10, Open P/L = £125.50, Total = £9,297.60
Mid-morning update.
LMI looks like it gapped down but then recovered to my target of 695 so it's open as a short.
Current open trades:
LMI; short @ 695 (£2pp); 681.8; £26.40
PFC; short @ 332 (£11pp); 319.4; £138.60
AHT; short @ 37.2 (£11pp); 38.1; -£9.90
RCP; short @901 (£1pp); 930.6; -£29.60
Total open trades= +£125.50
Monday close: Cash = £9,172.10, Open P/L = £122.60, Total = £9,294.70
Current: Cash = £9,172.10, Open P/L = £125.50, Total = £9,297.60
PokerBrat
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Your set up on LMI looks fine to me and very similar to how I would be looking to set this up, but I don't use quite so many lines and arrows!
I guess your order has been filled now, as the price has fallen through 695. A couple of things to consider in this trade:
1) Looking at the longer-term trend, this downtrend could be running out of momentum. The downward legs are getting shorter and the stock is starting to look oversold given the rapid fall from 4000 since September. Plus as you mention, there is increased volume on the last few buying days, which could mean it is a bear trap at the start of the uptrend reversal rather than a pullback.
2) The market is currently in a choppy sideways phase and looking to establish a bottom or a base from which to rally from.
Given these two points, I would be very aggressive with my stop losses and profit taking in this trade. Under current market conditions, I want my trades to move into profit very quickly otherwise I am out of them, and I don't want to let profitable trades go into a loss. Choppy markets can quickly decimate a swing or trend trader as they whipsaw back and forth.
I guess your order has been filled now, as the price has fallen through 695. A couple of things to consider in this trade:
1) Looking at the longer-term trend, this downtrend could be running out of momentum. The downward legs are getting shorter and the stock is starting to look oversold given the rapid fall from 4000 since September. Plus as you mention, there is increased volume on the last few buying days, which could mean it is a bear trap at the start of the uptrend reversal rather than a pullback.
2) The market is currently in a choppy sideways phase and looking to establish a bottom or a base from which to rally from.
Given these two points, I would be very aggressive with my stop losses and profit taking in this trade. Under current market conditions, I want my trades to move into profit very quickly otherwise I am out of them, and I don't want to let profitable trades go into a loss. Choppy markets can quickly decimate a swing or trend trader as they whipsaw back and forth.
bigbadboot
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Hi again PokerBrat
I just drew the arrows to illustrate the reasoning behind the set-up, I don't always draw them!
LMI looks like its leveling out on a linear chart but due to the price falls already I think it's better to view on a log chart.
I had a few reservations on this one; hence the small position (£2pp)
bigbadboot
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Update (closing prices)
Opened a short in LMI today.
Open trades:
LMI; short @ 695 (£2pp); 687.3; £15.40
PFC; short @ 332 (£11pp); 325.2; £74.80
AHT; short @ 37.2 (£11pp); 38.3; -£13.20
RCP; short @ 901 (£1pp); 941.1; -£40.10
Total open trades= +£36.90
Monday close: Cash = £9,172.10, Open P/L = £122.60, Total = £9,294.70
Today's close: Cash = £9,172.10, Open P/L = £36.90, Total = £9,209.00
Change on yesterday: -£88.60
Total this week: +£70.90
Opened a short in LMI today.
Open trades:
LMI; short @ 695 (£2pp); 687.3; £15.40
PFC; short @ 332 (£11pp); 325.2; £74.80
AHT; short @ 37.2 (£11pp); 38.3; -£13.20
RCP; short @ 901 (£1pp); 941.1; -£40.10
Total open trades= +£36.90
Monday close: Cash = £9,172.10, Open P/L = £122.60, Total = £9,294.70
Today's close: Cash = £9,172.10, Open P/L = £36.90, Total = £9,209.00
Change on yesterday: -£88.60
Total this week: +£70.90
bigbadboot
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No new signals for tomorrow.
PokerBrat
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BBB - did you manage to get out of LMI today or are you sitting on a paper loss?
I really don't think this is a market where you want to be sitting on lots of short positions. You might want to look for some long positions to hedge against your exposure to the downside.
I really don't think this is a market where you want to be sitting on lots of short positions. You might want to look for some long positions to hedge against your exposure to the downside.
bigbadboot
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Mid-morning update
Been stopped out on RIT Capital for a £49.00 loss.
I'm also reducing my exposure to Petrofac from £11pp to £5pp
Closed trades:
RCP; stopped out @ 950.0, -£49.00
PFC; closed £6pp @ 329.7, £13.80
Total = -£35.20
Open trades:
LMI; short @ 695 (£2pp); 718.8; -£47.60
PFC; short @ 332 (£5pp); 329.7; £11.50
AHT; short @37.2 (£11pp); 39.1; -£20.90
Total = -£57.00
Tuesday's close: cash £9,172.10; open P/L £36.90; total £9,209.00
Currently: cash £9,136.90; open P/L -£57.00; total £9,079.90
PokerBrat: LMI is still open. It hasn't reached it's target or it's stop.
Been stopped out on RIT Capital for a £49.00 loss.
I'm also reducing my exposure to Petrofac from £11pp to £5pp
Closed trades:
RCP; stopped out @ 950.0, -£49.00
PFC; closed £6pp @ 329.7, £13.80
Total = -£35.20
Open trades:
LMI; short @ 695 (£2pp); 718.8; -£47.60
PFC; short @ 332 (£5pp); 329.7; £11.50
AHT; short @37.2 (£11pp); 39.1; -£20.90
Total = -£57.00
Tuesday's close: cash £9,172.10; open P/L £36.90; total £9,209.00
Currently: cash £9,136.90; open P/L -£57.00; total £9,079.90
PokerBrat: LMI is still open. It hasn't reached it's target or it's stop.
bigbadboot
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Update (closing prices)
Closed trades:
RCP; stopped out @ 950.0, -£49.00
PFC; closed £6pp @ 329.7, £13.80
Total = -£35.20
Open trades:
LMI; short @ 695 (£2pp); 725.3; -£60.60
PFC; short @ 332 (£5pp); 331.4; £3.00
AHT; short @37.2 (£11pp); 39.6; -£26.40
Total = -£84.00
Tuesday's close: cash £9,172.10; open P/L £36.90; total £9,209.00
Today's close: cash £9,136.90; open P/L -£84.00; total £9,052.90
Change on yesterday: -£156.10
Total this week: -£85.20
Closed trades:
RCP; stopped out @ 950.0, -£49.00
PFC; closed £6pp @ 329.7, £13.80
Total = -£35.20
Open trades:
LMI; short @ 695 (£2pp); 725.3; -£60.60
PFC; short @ 332 (£5pp); 331.4; £3.00
AHT; short @37.2 (£11pp); 39.6; -£26.40
Total = -£84.00
Tuesday's close: cash £9,172.10; open P/L £36.90; total £9,209.00
Today's close: cash £9,136.90; open P/L -£84.00; total £9,052.90
Change on yesterday: -£156.10
Total this week: -£85.20
PokerBrat
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I am interested in your strategy for managing this trade now that you are in it. What are you looking for to decide whether to stay in it or not?
bigbadboot
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Well I have placed my stop above Monday's high and looking at the intra day chart today it appears to be finding some resistance around this level. I don't tend to move my stops as I see this as the point where the trade has confirmed itself as a loser.
I'd be interested to hear other peoples opinions on this though.
If it doesn't break the resistance (get stopped out) or head towards its target I would close it out after about 5 days and look for another trade.
