Archive for June, 2009|Monthly archive page
today – ewc – cfe
Leave a commentwhat a lot of red in the heat map on market opening today!
With the general market drop, I had an entry point hit on EWC at 0.575, a share I have traded a number of times. Purchase is based on trendline starting early March this year through another touchpoint mid May. Given the market drop, I always get a feeling in the bottom of the stomach… I have purchased on a retracement – but by definition I am therefore not buying on immediate strength. Its counter-intuitive for me – when I want to buy something making higher highs. I’ve got my plan in place for this share, so will follow.
CFE closed at 0.335 (4% loss) to protect my overall portfolio, and avoid a margin call. This was above my stop loss for the individual share, but given the general weakness today I closed this out.
The ongoing question in the press and even at lunch with the guys I work with – are we in a bear market, or are the bulls breaking into a run? Whilst I am interested in views, I just try to trade the same way I would otherwise. I saw this article, couldn’t help notice the Aussie reference. I do wonder myself when looking at all this cash being pumped out by the various world governments whether I am watching a bubble being born.
Books to read
I have built quite a collection of books on trading that I have purchased over the years, find a brief overview of them here. This text will continue to be updated over time.
“The Bear Book – Survive and Profit in Ferocious Markets“ by John Rothchild.
The linked version is newer than mine – I have an old (well 9 years old) hardcover version which I lend to friends occasionally who think that the bear market we have now is the end of finance as we know it (and I am assuming they’re wrong!). The book is relatively easy to read, talking about recognising bear markets and dealing with them. Understanding the players in the bear market, and where to invest. Whilst this text had not specifically addressed my trading methods, it has factored strongly into my view of the longer term phases of the markets. It reminds me why I construct a plan. If reminds me about cycles, and it reminds me why I seek to manage risk. I have enjoyed this book.
Further reading:
I found this list here interesting, and I struggle to disagree with any of his descriptions – for the books I have read. I’m off to buy a copy of “Basic Economics – A Common Sense Guide to the Economy”.
today – kzl – roc
well, as documented yesterday I had to make a decision about KZL. I exited part way through the day at a 19% loss, based on the great fall yesterday. 19% loss hurts when I’m working my current plan. Some of this may be recovered if I take up the offer for the share placement..whatever happens, this has brought out a flaw in my trading plan… my plan says exit when I fall through a stop loss, however my stop loss does not have a rule to move it based on a fall based on what amounts to a ‘return of capital’ which this share placement appears to reflect in essence. I’ll think about this some more over time, but don’t want to make a rash decision.. some study is in order.
The other action today was a pyramiding entry into ROC. ROC passed through resistance two days ago and is travelling on strong volume over the last month, and next resistance level is at ~$1.10.
Gold – I commented yesterday on a potential h&s formation on the hourly chart. Further analysis looks positive today, but then flicking to a daily chart, it is not obvious that there is a ‘defined’ right shoulder – as one would want for a positive trade.
gold
Is it just me – looks like a head n shoulders forming on gold (against USD) when I look at an hourly graph between 21 May, 12 June. Not confirmed as not closing conclusively below neckline – which makes it a squiggle as opposed to a tradeable pattern. I’ll keep watching that one.
When I look at Gold against AUD it almost looks like they are tacking each other…
today – tap – aqa
closed TAP today, fell through stop loss, giving me a 7.5% loss. Entry seemed promising, but fell back from resistance on day I entered (2/June/09).
aqa measured move
closed AQA today. Closed on a profit target, on a 27% gain – didn’t expect it this soon. See the inserted pic. As always when a profit target is met, I am unsure if I should trade that way, as my ‘normal’ approach is to let them run till they fall back through a stop loss. Back to the drawing board to see if I re-enter.
Points of interest – downward channel looked to be busted to the downside, so was looking to enter to the upside on the day is came out the top. I picked the exit as just below $6 as I expected that to be a point of resistance.
My other point of pain and pondering – KZL. It came back on the market today to a 20% drop which went straight through my stop loss (not CFD so not automatic). So now I have to evaluate if I am in a reasonable position to maintain the trade. Will go and think about this some more….
Both trades discretionary. Market looks very bullish.
today – mnd – cfe
opened MND – broke through resistance on open, so trigger fired. Originally found a month ago on heat map. EOD closed down, so technically should not have entered – I pulled the trigger too early as I normally engage on end of day prices.
opened CFE – huge volume on open, highest high in ~6months, and appeared to close the gap that was opened in October last year. Looking for the gap window to switch from resistance band to support band. Similar to MND above – close is low. I traded CFE poorly last time (a reason for setting up this blog) so will stick to exit plans this time.
Both trades discretionary. Market generally bullish.
Systems
I run a couple of systems, noted here so my other posts make some sort of sense.
System A: A long term trading system that looks for long term trends in the ASX200. Currently reviews 200 trading days for constant(ish) growth, and looks to take a position from a week to a number of months looking for share price increase. As you may guess, given the ASX over the last year, its a long time since this system signalled an entry.
System B: Not finalised. Essentially a shorter term trend following system based on ‘System A’. As ‘System A’ is written in C++, I am updating the code to remove a number of assumptions that I use in the share selection component to look for 3 month trends with other criteria similar, possibly extending outside of the ASX200. Some more coding to do – then testing. By the time I get there ‘System A’ may be running again… who knows.
So – System B has been redefined in March 2012 – see here
discretionary: ok – not really system based. Born out of the current world financial situation… what can I say. When my systems generate nothing, I revert to bits that interest me – in this case, shorts and pattern recognition. Almost all of my trades for the last 5 months have been discretionary – I get tips from a ‘heat map’ provided in real time by my broker, weekly volume increases, large candles and other signs I look for that tell me ‘there’s activity here’. Chart patterns are a favorite. Is it a cup n saucer I see formed in Fairfax today?
All systems have a money management component regarding stop setting and weighting by sector and as a whole of the portfolio. These are not detailed as I do not want to be seen to be offering any financial advice.
I am not a financial adviser, and I am not offering advice – just a guy with an interest
Dawn
So, my first ever blog. Dawn if you will.
My intention is to place trade analysis in this blog – the main reason being so I can cast a critical eye over my own trading activity.
In the interests of keeping this ‘manageable’ in the first instance I will only be logging my trading on the ASX. I trade other areas, including occasionally Forex, options over ASX shares, CFDs as a tool to gain leverage with managed risk on shares, warrants on ASX, futures on indexes or commodities, indexes via CFDs – ie: most of the readily available retail markets. Areas other than ASX may get a comment, but not in the plan for now.
See the entries and exits here.
tradersams blog 