FTSE 350 Spreadbet Journal

[isatrader]

Im still not sure about getting in again on DRX

I always personally like to put a stock into the penalty box for a while after I've been stopped out as the way I see it is that the market has told me I was wrong in my judgement, and the markets always right. So I should move on for the time being and put my money elsewhere, but maybe keep the stock in my watchlist and revisit at a later date. If it turns out to be a shakeout and reverses back up and continues on the original trend then there will be another chance to get in on a later pullback.

 

[think-it-thru]

I always personally like to put a stock into the penalty box for a while after I've been stopped out as the way I see it is that the market has told me I was wrong in my judgement, and the markets always right. So I should move on for the time being and put my money elsewhere, but maybe keep the stock in my watchlist and revisit at a later date. If it turns out to be a shakeout and reverses back up and continues on the original trend then there will be another chance to get in on a later pullback.

Thank you isatrader

 

[think-it-thru]

My short positions
POG
BVIC
were stopped out at a loss

 

[isatrader]

What are your current open positions if you don't mind me asking?

 

[think-it-thru]

What are your current open positions if you don't mind me asking?

No worries

LONG
VOD

SHORT
RSL
NEX
TCG
RBS
MAB
IAG (ticker on city index ICAG)
GLEN
TT.
MARS
LLOY

 

[isatrader]

I won't comment on your open trades as I don't want to influence you in any way. But it is interesting to see your picks and the short weighting of your portfolio.

 

[think-it-thru]

I won't comment on your open trades as I don't want to influence you in any way. But it is interesting to see your picks and the short weighting of your portfolio.

I would appreciate it if you did comment, you cant influence me unless i choose to be influenced, my responsability, however I understand if you dont wish to comment.
Yes the weighting, I thought the market would be on the short side, and with hindsight I would have hedged the shorts with more longs, so really i only tried to pick a top with several shorts mmm , lesson learnt...hopefully.

 

[isatrader]

I would appreciate it if you did comment, you cant influence me unless i choose to be influenced, my responsibility, however I understand if you don't wish to comment.
Yes the weighting, I thought the market would be on the short side, and with hindsight I would have hedged the shorts with more longs, so really i only tried to pick a top with several shorts mmm , lesson learnt...hopefully.

Ok, but I'll try my best to be neutral with my comments so as not to unduly influence you with any bias I may have currently. I've found that it really helps to go back over your closed trades a little while after, maybe a few months later and see what you did right or wrong and how you could have done better. I think this is one of the real values of keeping a detailed journal, be it online or just for you personally on your computer or even on paper. As reviewing your past trades will help you to see bad habits and any mistakes that could be avoided in future.

So lets start with the statement above that says "I thought the market would be on the short side". What were/are your reasons for this? And what evidence led you to this conclusion? I'm not saying it is right or wrong to be short currently as the market could tank today or it could break higher. But I think it's important to try and remove your opinion from the mix and just focus on the evidence you have as it's easy to be swayed by the barrage of opinions in the media who generally have an agenda, are trying to sell something or are talking up their own positions.

With the method I trade the first step is to identify the trend using a weekly timeframe - whether it is up, down or in a sideways range. Then you move onto the industry sector and see which are outperforming the market. Then from the best industry groups you look at the sub-sectors in them and see which of those are outperforming, and then finally you get down to the individual stocks - which by then should be a reasonably short list and then do further analysis from there.

So when you entered your trades was the market in an uptrend, downtrend or a sideways consolidation phase? Do you think it's in the same place now or has it changed?

As for your current open trades I imagine that you have set stop losses for each where you are confident that if they are hit that you are wrong about the trade? I've usually found that meddling with a trade once it's open is a bad idea. It's occasionally the right move, but more often than not it isn't.

So plan your trades and then trade your plan.

 

[think-it-thru]

Ok, but I'll try my best to be neutral with my comments so as not to unduly influence you with any bias I may have currently. I've found that it really helps to go back over your closed trades a little while after, maybe a few months later and see what you did right or wrong and how you could have done better. I think this is one of the real values of keeping a detailed journal, be it online or just for you personally on your computer or even on paper. As reviewing your past trades will help you to see bad habits and any mistakes that could be avoided in future.

So lets start with the statement above that says "I thought the market would be on the short side". What were/are your reasons for this? And what evidence led you to this conclusion? I'm not saying it is right or wrong to be short currently as the market could tank today or it could break higher. But I think it's important to try and remove your opinion from the mix and just focus on the evidence you have as it's easy to be swayed by the barrage of opinions in the media who generally have an agenda, are trying to sell something or are talking up their own positions.

With the method I trade the first step is to identify the trend using a weekly timeframe - whether it is up, down or in a sideways range. Then you move onto the industry sector and see which are outperforming the market. Then from the best industry groups you look at the sub-sectors in them and see which of those are outperforming, and then finally you get down to the individual stocks - which by then should be a reasonably short list and then do further analysis from there.

So when you entered your trades was the market in an uptrend, downtrend or a sideways consolidation phase? Do you think it's in the same place now or has it changed?

As for your current open trades I imagine that you have set stop losses for each where you are confident that if they are hit that you are wrong about the trade? I've usually found that meddling with a trade once it's open is a bad idea. It's occasionally the right move, but more often than not it isn't.

So plan your trades and then trade your plan.

Thank you for your reply isatrader
And the great advice.

I thought the market was on the short side. I based that opinion on the FTSE 100 was below its 200dma.
But looking back, even though it was below that average, its pretty sideways and choppy.
I keep a paper journal as well as this one online.
I keep each trade on a seperate sheet in a folder with date, opening price, closing, p/l , reasons for entering etc.
I have sections for working orders, open positions and closed positions.
I set stop lossess with the broker when I enter each trade.
I dont set take profit orders as I monitor positions daily I would adjust stops in the direction of the trade to break even then to lock in profit and to let the trade run on for as long as possible.
Most of my trades are on the far quarter contract.

When you say market, what do you mean by that? do you mean the FTSE100 or a bigger picture still?

Thank you again for your feedback isatrader.

 

[isatrader]

When you say market, what do you mean by that? do you mean the FTSE100 or a bigger picture still?

When I say market, I'm talking about the bigger picture, which is the entire New York Stock Exchange (Ticker: ^NYA on free sites like Yahoo). But the S&P 500 is the chart used by most people as it obviously has 500 large cap stocks across a broad range of sectors, which is a good proxy for the entire market and is tradeable in a variety of ways. For you though the FTSE 100 is necessary to look at also, but you need to be aware of the weightings of the individual sectors as it's not an equal weighted index and only has 100 stocks.

So I've attached the FTSE 100 factsheet pdf below that I found on the FTSE website here: FTSE UK Index Series - FTSE which shows on page two that Financials and the Oil & Gas sector make up almost 20% each of the FTSE 100, followed by 14.5% in Basic Materials. So over half the FTSE 100 is in only three quite volatile sectors. Whereas, Technology is almost non existent in the FTSE 100 and makes up only 1.02%.

So how I approach the determination of trend is to look across a broad range of markets at the same time and see where the important support and resistance areas are on each chart. As for example if the major charts across indices, commodities, forex and bonds are all hitting major support and resistance levels at the same time then it can give you a clue to a possible change in trend or corrective move. I take this further by looking at the market breadth charts that I posted the other day in your journal to look for further clues and gradually build up the evidence. Hope that helps to explain.

 

[think-it-thru]

When I say market, I'm talking about the bigger picture, which is the entire New York Stock Exchange (Ticker: ^NYA on free sites like Yahoo). But the S&P 500 is the chart used by most people as it obviously has 500 large cap stocks across a broad range of sectors, which is a good proxy for the entire market and is tradeable in a variety of ways. For you though the FTSE 100 is necessary to look at also, but you need to be aware of the weightings of the individual sectors as it's not an equal weighted index and only has 100 stocks.

So I've attached the FTSE 100 factsheet pdf below that I found on the FTSE website here: FTSE UK Index Series - FTSE which shows on page two that Financials and the Oil & Gas sector make up almost 20% each of the FTSE 100, followed by 14.5% in Basic Materials. So over half the FTSE 100 is in only three quite volatile sectors. Whereas, Technology is almost non existent in the FTSE 100 and makes up only 1.02%.

So how I approach the determination of trend is to look across a broad range of markets at the same time and see where the important support and resistance areas are on each chart. As for example if the major charts across indices, commodities, forex and bonds are all hitting major support and resistance levels at the same time then it can give you a clue to a possible change in trend or corrective move. I take this further by looking at the market breadth charts that I posted the other day in your journal to look for further clues and gradually build up the evidence. Hope that helps to explain.

Thank you for your feedback and your help isatrader!
I dont know how to read point and figure charts at the minute, but I have a book on tech analysis which will tell me.

I have too many shorts compared to longs I think. I should have been better hedged. I think my risk managment is ok, but my choice and timing needs more work, well all of it really. The bottom line will tell.

 

[think-it-thru]

My GLEN short was stopped out at a loss

 

[isatrader]

I don't know how to read point and figure charts at the minute, but I have a book on tech analysis which will tell me.

Dorsey Wright are the best for learning point and figure imo, especially the market breadth uses of it as they base a lot of their research on the various breadth charts and relative strength uses of point and figure. They have a free online tutorial site which can help you understand everything you need to know to read the breadth charts. Here's the link: PnF University. Go through the six lessons which can be accessed by clicking on the 01, 02 etc up the left of the site and you'll get a good basic understanding.

 

[think-it-thru]

Thank you for your reply isatrader
I have looked at the links , Im finding it hard to follow at the minute, but I never quit, so Im re reading them again, and will do until I understand more.

 

[think-it-thru]

My MAB short was stopped out at a loss

 

[think-it-thru]

The final 8 of my positions which were all shorts we closed out in mid march at approx 1% loss each , as I didn't have them set to roll over.
No open positions at the minute, equity down 30%
I have enrolled on an online trading course starting next Tuesday.
I am trimming some fat of my expenses to add cash to my account, so I can keep my options open regarding different position sizes.
I will still record the % loss as a % of the total of the new equity amount.

 

[think-it-thru]

Back from the drawing board, more reading of trading books, looking at charts, balance sheets, news stories etc.
Trading seems harder than all the books read like, even the ones that say its hard.
Im always optimistic when reading the books, but not so jittery that i open positions just after reading them.
Im reading the Jessie Livermore book at the minute, I like that book, there are good lessons in it, I also like the story format that its written in.
From reading other books too, it seems like after I have done everything Ithink I need to do before I pull the trigger, I could of course still be wrong on many levels, like choice, fundamentals, technicals and timing, so thats what a stop helps protect us from i guess. It seems like then risk management is more important than the above, im not saying to ignore the above would be wise, but my interpretation is that when i am "sure" for want of a better word, is to allocate risk and pull the trigger. Its seems very possible that I could have a whole load of the selection criteria wrong and still profit! Anyway its lining up probabilities I guess, and that is a good book by Marcel Link.
FTSE 350 still for me, the spreads are low , the movement is there. Will keep you posted.
Still -30%

 

[think-it-thru]

Mistakes from last tme

Not being hedged, too many shorts ( I felt Bearish) I might have well had one position being short on the market index.
Not moving stops up in time and leaving money on the table.
Not pulling the trigger on other positions, that could have profitited by hedging or even minimised losses.

 

[1961trader]

Hi, Think it thru

I have read your journal with interest. I would like to make a few points:

1. Early on your journal you mentioned paper trading an the results were looking good and it seems that when you have gone live, the results are not as good. This is a common problem for lots of traders due to a number of reasons. A couple of these are :trades are not executed as per setup during paper trading and the impact of psychology of moving onto a live account.
2. You seem to have a number of trades open at one time and wonder if you are restricting the amount of total capital invested at any one time, for example, maximum 3-4% across all trades.
3. As mentioned by another poster, reviewing trades on a regular basis can provide valuable information about the result.
4. Trading plans have been mentioned and it should be a working document that is updated on a regular basis. I update my plan once a month when I have reviewed the months performance.

I hope that you will something useful here and you had some excellent advice from other posters.

I live in Derby and am looking for other traders to meet up with. PM me if you want to organise something.

1961

 

[think-it-thru]

Thank you for your feedback 1961trader
I have some questions for you and which are open to anyone.
What amount of capital is wise to have invested at any one time?
Do you mean 3-4% at any time or 3-4% exposure as in if I had some stops
in other positions moved to B/E I could have some more positions?

Hi, Think it thru

I have read your journal with interest. I would like to make a few points:

1. Early on your journal you mentioned paper trading an the results were looking good and it seems that when you have gone live, the results are not as good. This is a common problem for lots of traders due to a number of reasons. A couple of these are :trades are not executed as per setup during paper trading and the impact of psychology of moving onto a live account.
2. You seem to have a number of trades open at one time and wonder if you are restricting the amount of total capital invested at any one time, for example, maximum 3-4% across all trades.
3. As mentioned by another poster, reviewing trades on a regular basis can provide valuable information about the result.
4. Trading plans have been mentioned and it should be a working document that is updated on a regular basis. I update my plan once a month when I have reviewed the months performance.

I hope that you will something useful here and you had some excellent advice from other posters.

I live in Derby and am looking for other traders to meet up with. PM me if you want to organise something.

1961