My Tailored Trading Journey

Hi tomorton,

I see SOPHOS as the cost of doing business. It looks like 2 more may be going to pot but the profits from my main trade KNOS.L are covering the losses as I manage my risk.

I saw KNOS about a week after the IPO. I read the documents and played for the entry into the FTSE SmallCap as it had started an initial uptrend. Some of the above points about buying have been added since then but KNOS story really got me from the get go and surpassed a lot of my criteria. That sector is very strong atm too.

I used the March SB to take into account up and coming news from December from the release of the new product and what I thought would be an uptrend from there. The spread wasn't much different from the DFB so I thought to take the cost of the trade now instead of having to pay daily

Also, I could see Sophos was going to hit my SL and it did, so wanted to minimise my losses as much as possible. It would have cost me another £20 if I had stuck in. At least with bailing out I kept to the strategy. They won't all work but hopefully some will.

Thanks,

TTT
 
Well its an essential skill to keep losses small and when you put a strategy in place, you have to trust it to be followed. Long as you appreciate you're in exceptionally high risk waters.
 
32RED (TTR.L) Criteria

On Tuesday I had a Spread bet order filled for 32 RED JUN-16 @87.07.

So why did I buy?

Technical Analysis

  • Breakout - It hit a new 52 week high which caught my attention @ 84
  • Gain - It had made a 2% gain from the the last close once it passed above 84.2
  • Volume -The average volume is 188,044 but it was easily going to break that from the orders that came through. Volume closed at 459,700 with a big order at the close. One of my buy criteria is double the volume of trades.
  • Trending - The Share is in an uptrend and the sector has been rising with PP/Betfair merger
  • Range - There was range contraction and low volume in the last 3 days before the breakout. I look for a minimum of at least 2 days of range contraction and low volume
  • Closing Prices - The last 3 days were relatively close to one another
  • Historic Gain - The stock was up pver 10% in the last week with a low of 75%
  • Base - The base is at 80 and the stock was within 10% of the base
  • Moving Average - 5DMA is greater than 20DMA. The 50DMA and 200DMA are also pointing up
  • The stock was not up more than 4 days in a row

Fundamental Analysis

  • Mkt Cap/Pre-Tax Profit < 20 - 63.4/3.4 ~ 18
  • Pre-Tax profits Rising - 3.8mln (2013) - 5.4mln (2014) increase of 41%
  • Dividend Rising - 1 - 1.4 increase of 40%
  • ROE > 15% - 56%
  • Revenue/Turnover Increasing - 24.8mln (2013) - 31 (2015) increase of 25%. Record reportedincrease in revenue for first 6 months of 2015
  • Debt/Pre Tax Profit < 4 - 1.45
  • EPS > 15% - 2.84 (2013) - 4.2 (2014) increase of 48%. Need to watch FY2015 as half year was down due to acquisition and paying with shares
  • What's New - New Acquisitions and markets eg ROI, Italy, databases etc.
  • Institutional Buyers - Yes 9
  • Spread < 5% - 2.48%
  • Stop within 8-10% - 87.07*.9 = 78.36. Stop at 79.5
  • Maximum Exposure of £1,000 - £7.50 per point. 7.5*87.07 = 653.02.


I may have made a mistake in the last point out of fear and not put enough on the trade. My loss per trade is set at £100 for a 10% decline in the trade. A 10% drop is about a 9 point difference. This would have been about £11 per point. It was the £11 with not an overly strong base that put me off. It was not the best thing to do to hesitate. Not because I am up at present, but because it is not following the strategy. A gain or loss here, this is a mistake on not following my convictions.

I have other criteria I follow but my site explains my main points for entry in 32 Red.

The Screenshot of proof can be found on my blog http://www.thetailoredtrader.co.uk . The screenshot includes my Kainos Spread Bets that I have previously mentioned and the Next Fifteen Spread Bet I previously mentioned, which I will write about in the coming days.

Thanks,

TTT
 
Hi,

Placed a JUN-16 Spread Bet on River & Mercantile Group Plc (RIV.L) earlier today at 256.13 for £4 per point. Gets a yellow card at 239, and out at 225.

I have written up my reasons for buying Next Fifteen (NFC.L) but making changes to my blog at present. Hoping to have it done by tomorrow. If not I will finish on Tuesday as not around for weekend.

Thanks,

TTT
 
Next Fifteen Communications

On Thursday the 19th of October, I had a Spread Bet order filled for Next Fifteen (NFC.L) JUN-16 @ 221.3 for £5 per point.

So why did I buy?

Technical Analysis

  • Breakout - It hit a new 52 week high which caught my attention @ 217Gain - It had made a 2% gain from the the last close once it passed above 217
  • Volume -The average volume is 62,320 but it was easily going to break that from the orders that came through. Volume closed at 117,030. I like the volume to be at least 50% over the average volume. This with the 2% gain were the main reasons behind the Technical Analysis passing the criteria Technical criteria
  • Trending - The Share is in an uptrend and the sector has been rising. Media companies have appearing a constantly on the 52 week breakouts
  • Range - There was not much range contraction and low volume in the last for 2 days just before the first breakout on the 16th. I look for a minimum of at least 2 days of range contraction
  • Closing Prices - Tight closing prices on 14th, 15th and 16th around 202 which will be used for my base and support
  • Historic Gain - The stock was up over 10% in the last week with a low of 197.73. a 10% addition is 217.73, where it peaked on the chart at 217.90. I placed a JUN-16 Spred Bet, so will have paid more. I am referencing the standard stock chart hear as it shows volume.
  • Base - The base is at 202 and the stock was within 10% of the base
  • Moving Average - 5DMA is greater than 20DMA. The 50DMA and 200DMA are also pointing up
  • Days - The stock was not up more than 4 days in a row

Fundamental Analysis

  • Mkt Cap/Pre-Tax Profit < 20 on the 19/10/2105 - 144/15.6 <10. The 15.6 figure is the expected figure for this year. The first half of the year has already report £7.2mln pre-tax and the second half tends to be the strongest half. I will admit that this is where I could go wrong in this trade, but they have contracts with Google and Amazon, just secured a contract with Twitter and have an increased pipeline this year.
  • Pre-Tax profits Rising - Half year on year is up 33%
  • Dividend Rising - 1 - 1.2, increase of 20%ROE > 15% - 17%
  • Revenue/Turnover Increasing - 52.2mln -61.8mln increase of 18%
  • Debt/Pre Tax Profit < 4 - about 1:1
  • EPS > 15% - 2.84 (2013) -9.1mln - 4.3mln. Big increase.
  • What's New - From Investors Chronicle on 12/09/15. Few marketing and media relations agencies count Google, Amazon and Facebook among their clients; Next Fifteen Communications (NFC) added Intel and Airbnb to its impressive roster in the six months to end-July, as brisk demand for its data analytics, software and digital communications services fuelled a 31 per cent rise in operating profit to £7.2m.
  • Institutional Buyers - Yes 16 but there has been a reduction from 17. I think this is profit taking. Institutional ownership is at 69% at present. It needs institutions to drive the price up. Once (IF) it hits 85% I will consider bailing if I haven't already
  • Spread < 5% - 1.71% for the JUN-16 contract which amounts to 3.81 points. It means I started down £19.05 at £5 per point
  • Stop within 8-10% - 221*.9 = 198. Stop at 202
  • Maximum Exposure of £1,000 - £5 per point. 5*221.3 = 1,106.5. Minimum, Spread bet was £5 per point. As my stop is at 202 I will be limiting my loss to a maximum of £100.

I have other criteria I follow but the above are my main points for entry in Next Fifteen. There are minor difference to the criteria for 32 Red.

As always this is all in my own open and not to be considered as advice to anyone.

Thanks,

TTT
 
Portfolio Update 01/11/15

Hi,

Below is my Portfolio Update as of the 1st November 2015.

My Shares Portfolio is up 11.35% including costs, which is 21% ahead of the FTSE 100 and 19% ahead of the All Share.

My Spread Bet portfolio started on the 25th of September and is up 11.6%. I Added 32 Red (TTR.L), Next Fifteen (NFC.L) and River & Mercantile (RIV.L) 2 weeks. I opened the account with £500 in mid Septmeber and added another £700 on the 26th of October. Including my losses I was up 11.17% including costs and the 2 losses I have already declared for SVT.L and SOPH.L. This gain would a good bit higher if it was based on when I deposited the cash. The FTSE 100 has gained 5.29% and the All Share is up 4.79% since the 1st of September.

I tried to get into Penna Consulting (PNA) on Friday but Long Spread Bets were not allowed by IG as they could not hedge the bets due to lack of liquidity in the share. The EMS of Penna is quite low at £1,000. I passed on it today as it no longer has my buy entry criteria.

I got into Avon Rubber today as it matched my criteria. However, as we are in a new month, I will not be updating my portfolio with it until next month.
I now have open positions on 6 companies. 10 is the maximum I will hold. My total percentage gain since I started across the 2 accounts is 11.17%.

See my blog for further information regarding what I hold and where I entered/exited.

Thanks,

TTT
 
Have been a bit more active.

Portfolio currently consists of:

HWDN
KNOS
TTR
NFC
RIV
AVON
BKY


I tend to not look at mining but as BKY was the first 52 week breakout I have found in this area and followed my criteria I did a very small SB of £5 per point at around 30.825. my max exposure is approx ~ £150 as I am just not comfortable with mining to put on a large amount. My Stop is near the 20p mark. My target price is 45p. I will fill in further buy prices and screenshots in the coming days.

HWDN has come back to a profit today aswell. KNOS had a good run up and surpassed 300 with a buy at 199.92 and £1.75 SB at 229.22 and £2.50 SB at 213.32.

Red 32 (TTR) is in profit with a SB at £7.50. I bought at 87.07 and target is 120p. I am looking to increase my exposure as mentioned before as I did not put on the correct amount when I placed the SB in exposure terms.

I hold 7 positions now. the max I will hold is 10. As usual, I will have a further update on my blog www.thetailoredtrader.co.uk.

Thanks,

TTT
 
Added another Spread Bet of £3.50 per point, MAR-16, on 32 Red (TTR.L) @ 104.82.

Total now £11 per point on 32 Red, which is what my initial exposure should have been.

Thanks,

TTT
 
Had a lesson on stops today and having too close a stop. I had a stop at 10% from a high. I usually keep it 12% from a high. Had a stop in at 268 on KNOS.L. Stopped out at 263. A 12% stop would have been 261.

Looking at the chart and a flurry through google, it seems to be a Tree Shake. I am back in at 272 at £4 per point. Profit on Spread Bet to exposure was just over 18% including costs.

Thanks,

UL
 
4 Lessons in One Week

This week was the most active week I have had in my portfolio. Not because I was trading a lot, but because of being stopped out for profits and losses.

My 2 Kainos DEC-15 Spread Bets hit their stop losses at 263.2. The stop loss was at 268.1 but the share gapped down during the the day. I made a combined profit of £180 on the share. Unfortunately, I concluded the gap down to be tree shake after I was stopped out, so I have got back in at 275.49, JUN-16 at £4 per point. This gives a maximum exposure of just over £1,000. The shares gapped down so quickly though that I didn't have time to react as I was at lunch. The stop loss may have closed me out passed my initial stop loss but if it had kept dropping I could have been in a lot of trouble. That said my stop loss at 268 was too close for a tree shake and was not at the correct support level. I had moved up the stop in the previous days without putting it in a proper base. That said, it shows the importance of having a stop loss!!

Next was Avon Rubber. I had a stop loss 10% away and it hit it and gapped down to 1056 with a loss of £122. I had given this room to breathe with results next Tuesday. but when the stop is hit it is time to get out. It turns out that it was being removed from an Index which caused the drop!

32 Red became the excitement of my week. I had bought in at £7.50 at 87.07 and £3.50 at 104.82. A 20% drop happened on Friday. Stops were hit but not closed until 82.87 and 82.89 giving a loss of £31.5 and £76.76 or a total loss of £108.10. I got out when I was notified that the price had gapped down. Initially, I thought this to be a tree shake and moved my higher stop down to 88 as no news had been broken. The price then gapped down. Though I didn't hit a 10% loss in my original buy I thought it was better to get out before any more damage was done as it surpassed my 10% stop on my latest Spread Bet. My maximum exposure to the share just breached the 10% rule which I am ok with. The share had been trading at a 7 point spread and once it all settled down it narrowed to a 1.5 point spread on a JUN-16 contract. It looks to be a major sell by an institution and 32 Red came out with an RNS stating nothing had changed to cause such a shift and still expected the same full year results. I got back in at £6 a point on a JUN-16 contract when this happened.

My 4 lesson learned are:

1) One cannot know everything that happens in the market and how the share will react. Get out if you are not sure. You can always re-enter at another stage

2) Watch out for big three shakes near results e.g. Kainos is Tuesday week. There was heavy volume on the upside on Friday, filling the order. The volume the next day on the upside will help to decide to get back in or not if shaken out. Institutional sells can really move the market. 32 Red traded 5 times the average on Friday. Abide by stops though in case it is a major sell off. You can always get back in.

3) If no news and share dropping from high adjust stop to about 10% - 15%. Pick the level and just get out when it is hit.

4) I should have taken profits in KNOS earlier when it was past 290 as I was up 32% in the first Spread Bet.

Overall I thought this a good experience. I didn't panic which was good, though I was hesitant at times. The main thing I have learned is that I am applying decent risk management and sticking to it on a real live account. For one, I did not blow up my account and keep moving the stops down. I am still up about 8% overall since I started 4 months ago. My re-entry into KNOS and 32 Red has a gain already. I stuck by my convictions to a degree and bought back as there was no reason for the share to keep tanking. I do need to look at my stop loss placement more critically though!

Thanks,

TTT
 
Sold HWDN today at a 3% profit. Sold to fund other trades coming in. Cannot see much more upside on it so time to bail.

Thanks,

TTT
 
The learning curve seems to keep on coming at the moment. Today I made a loss and a rather big one. I don’t mind taking a loss as it is part of doing business. I am annoyed as I made a stupid mistake. I had forgotten “Buy on the Rumour and Sell on the News”. I had also forgotten that technology stocks tend to be a lot more volatile than other stocks. The Bulletin Board was full of good news and that is the best time to get out, I didn't though. My stop was hit for a £145 loss. I thought it to be overdone and re-entered the trade only for the share price to gap down again. I saw 32Red again and how it rebounded, only I forgot that 32Red happened on a day of no news.

The stop on my recent spread, getting back in, still has not been hit but it looks like I will exit the trade over the coming days. I need to do research and learn from my mistakes over the coming day or two. It is interesting but these things do happen and I was warned that it will more than likely happen over the first year.

To summarise my mistakes were:
  • Holding a trade on results day that has had a run up during results
  • Going against my short term hold strategy for IPO's
  • I got too confident and caught up in the rumour (Rose Tinted Glasses)
  • Comparing 2 trades that are not alike and as a result doubling my loss on the trade
  • Not stepping back and looking at the trade in an impartial point of view
  • Not knowing my sell strategy well enough

Thanks,

TTT
 
I had become quite happy with my purchase of KNOS and at one stage I was up over 40%. Little did I realise that most new shares drop on the results of their first IPO. The drop drop on results day and again today was something I had never seen before. Like 32RED my stop gapped down and sold my Spread Bet at a £145 loss, well outside my 10% maximum. I bought again having been caught up in the hype thinking this was a tree shake and and it just kept falling. I got out at the 10% loss with costs at a £115 loss. I had made £180 in the Spread Bet previously but netting against each other I made a £80 loss.

This was multiplied by the fact that I was only able to get out of my share holding at about 216, which means a 7% gain of £70 on a trade that was up over £400! Total loss was £10 but does it feel a lot more. I am not worried about the cash side, but I am annoyed with the mistakes I had made, and here they are:


  • Buying on the way down (catching a falling knife)
  • Concentrating on what to buy and not when to sell
  • Being too slow to make up my mind and sell. This cost me about £20
  • Getting caught in the Bulletin Board comments. I prefer a quiet BB and it became very noisy in there
  • I became greedy thinking it could reverse
  • Not getting out at exactly the 15% from the peak when it went bad. that said I was nowhere near my screen to react and it gapped down. This is my fault by not creating an alert to warn me
  • Risking too much on one holding

My next post will outline the sell signals I have in place and missed by not going over them consistently. The main lesson here is to learn from these mistakes and not to repeat them. if I cannot learn from them there is no point in me trading. It is better to make and learn from these mistakes with a small account than a big one!

I have since purchased Penna Consulting with the proceeds of Kainos.

Thanks,

TTT
 
Hi,

The last few weeks have been crazy with work, travel, Xmas and life in general so I have not been able to update the site or forum.

As previously posted my hits with KNOS and 32 Red made a decent dent in my portfolio. I have since learned a bit and am bag on track. My portfolio is nearly back to break even as of close of the markets this evening.

Since my last past I have applied my IPO strategy on 3 companies (IBStock, McCarthy & Stone and Softcat. My Stop Losses are tight at 8% here.

My normal strategy of a 52 week breakout has been applied to MJ Glesson and an increased position in 32 Red.

All information in available on the site, including a screenshot of my live positions. I will do my monthly portfolio update hopefully by Sunday evening.

I am currently looking for my entry point for the Santa Rally.

Thanks,

TTT
 
Hi,

Just entered a FTSE spreadbet at £2 pp for Santa Rally @ 5791.3

Bought Sanne Group on 09/12/15 (SNN.L) @ 384.24, £3 pp. Current loss is 6.3% and current biggest loser. Next is Softcat with a 3.5% loss

My Mining flutter got stopped out with a £40 loss.

I have added another £300 to my account last week too.

Currently best performer is 32 Red with a 21.3% gain including transaction costs and Gamma is currently at 14% gain after transaction costs

Total account is P&L = -5.53%

Thanks,

TTT
 
Its Been a While...

Its been a while since I updated this thread. A mix of work (mad hours) and life (moving in with the gf) have put pressure on me updating this and my website.

I have been trading though and have made plenty of bad and good decisions.

Trading through the volatility in December, January and February left me with some losses. No more than 13% on one but my account did reach to a portfolio loss of approx. 11%.

Surprisingly, I didnt get emotionally upset about my losses or the value of my account. I did make some stupid deicisions though like buying a stock when the market was pointing down and buying when my full criteria was met.

The main positive was developing my Recovery strategy and finalising my 52 Week Breakout and IPO strategy.


I have managed to go from a 11% loss in my portfolio to a 10% gain overall.

I have attached my SpreadBet and ISA accounts but as usual the main information is on my sight, including the clean out of some shares in my portfolio and why.

I haven't purchased anything in over 2 weeks as they haven't fallen into my criteria, which I believe to be a good sign as it is showing that I now don't need to trade for the sake of it.

Comments are always welcome.

Thanks,

TTT

http://www.thetailoredtrader.co.uk/
 

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Nice to see this thread up again. Time pressure + emotional changes = bad for trading. Glad to hear you're coming through though.

Nice timing for me personally too as I have rotated back into FTSE350 stock trading as forex trend-following opportunities have run down a bit.

You consistently talk about buying. Are you also SB-ing falling stocks?
 
Hi tomorton,

Thanks for that. I wouldn't say its bad for training. Its more about getting ones trading in line with everything else, particularly as I am not full time. I think it has helped with the discipline and emotional side of trading.

Are you a pure Tech Trader? What would you base your strategies on?

I have not learned to SB falling stocks yet and is a tool I need to add. As I have the recovery strategy relatively ok now its definitely the next one on the list. I think I may start with profit warnings and go from there. I don't know if doing the exact opposite to my current approach (52 week break down) would work and need to test it. Maybe the breakdown mixed with a profit warning/bad news...

Why do you think FX has dried up?

TTT
 
I am purely trading on TA,the only reference I make to the "real" world is to watch the economic calendar and exit positions prior to central bank rate decisions or the US non-farm payrolls.

On forex I am purely a trend follower, just looking for the obvious and well established trades. I just use simple criteria like where is price to this MA, where is this MA to another MA, is price been up or down on the last month. Forex pairs are all related: when the big players pull money from one they have to immediately dedicate it to another, its not like you or me and we can just bang it in the Halifax and wait for something to happen. So when a couple of major pairs see trend failures, the money from them might go towards building new trends out of ranges in other pairs.

But once forex trends do get established, they can run for years and they can be hit again and again and again for some nice rewards.

On stocks I'm a little bit more open to swings. But I mentions shorting as downswings are not just the opposite of upswings, its not correct to simply invert the chart and reverse the patterns. But I think you sense this too, as you talk about profit warnings - can be really dramatic bear signals.
 
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