Review of 2011

Last post prior to Christmas, so I thought I’d wrap up 2011

I can’t really review trading performance over 2011 as I’ve not really traded that much, I’ve had a learning and slow year – purely intentional I had  a great July 2010 and that allowed me to take 2011 easy should I wish and that’s what I’ve done – to me this is what trading is all about, you should not feel compelled to have to produce results all the time if you don’t wish to.  If you want a month off, take it off – you’re your own boss – live your life how you feel fit to do so (within the law!), do not let trading take over your life, unless you want it to.

So far this year my total cumulative profits for 2011 have been around 15% – which has beaten the market (FTSE100/DJIA) and I’ve not really been that focused this year.  From a pure statistical point, 2011 has been by far my worst year since I became a professional trader.  That doesn’t concern me though as it’s not the result of a poor trading set-up, poor set of trading rules or making a shed load of mistakes.  It’s simply down to the fact that I’ve traded a heck of a lot less than I previously have and as such you’d expect lower returns.

The only disappointment for me from 2011 is that I have not done any Charity Weeks – something that I feel guilty about and as such I’ve come to the following decisions, during the 2012 Charity Weeks I will be just a tad more aggressive in the trades that I take and I will look for more trades to make up what I’ve not obtained during 2011.  Also If I have a good 2012 I might add a couple more charity weeks into the calendar.

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FTSE100 Trade Update

STOPPED OUT!!!

Would you believe it?  Well yes I can – I half expected it, but you never know for sure.

Why did I expect it?  The 60 min 34 DTosc was Bull OB Friday am when the trade triggered – IF that was the start of a new trend upwards then the lows would not have been taken out.  This is trading though – we know and accept that not every trade will work out – this was just one of those times.

Let’s talk a little about risk – just imagine if we’d have had £10,000 exposed to that trade, it would have been gone!  Luckily I only risked £140 ish and lost that – that’s still less than 0.01% of my trading account, but I don’t like being beaten – especially by the market!

I am still waiting to get back in on this trade as I have a couple of possibilities.

Let’s take a look at the big picture: – The Weekly DTosc is bullish still – the fast line is in the OB zone but the slow line is not.  This weeks price action is critical.

The 8 DTosc is not behaving as we’d like hence the loss – that does not mean it’s no longer not a useful indicator – the 13 DTosc is nice and smooth and bearish.

Price is still at the first fib support zones.

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Update

Update on the FTSE100 trade.

Everything was in place on Wednesday for a long trade – the only thing missing was a positive market!  I never got filled and the position of the DTosc at close of trading Wednesday has resulted in the trade being moved back into AIM mode (of Ready, Aim, Fire analogy!) See chart below:

Aiming 1y

The chart above has now had to revert back to analysis and trade set-up mode – something I call for fun – AIM position.

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What’s Next – Update

Here’s an update to the FTSE100 “What’s Next” post

Let’s take a look at the current position:

Ok so what have we got?  We’ve just had on this DAILY chart a DTosc bullish reversal right on the 38.2% fib level of the A-B swing up.

The WEEKLY DTosc is still bullish.

On the chart below we have in RED – the 38.2% fib level and I have placed 2 black horizontal lines on todays (Tuesday 13th Dec 2011) bar.  these lines mark our ENTRY and STOP positions.

So tomorrow, Wednesday 14th December 2011, I will go LONG the market (FTSE100) if it hits 5526, as soon as that happens I’ll place a stop at 5412.

The difference is (5526-5412) 114 points – I’d have preferred todays bar to have been shorter but we can’t demand! Remember the market can do anything it likes at anytime and we are powerless to stop it.

How much am I prepared to lose on this trade if my analysis is wrong?  Well I’m happy to lose £150 on this trade – this represents less than 0.1% of my entire trading account, but there’s no clear trend so I’m playing cautiously.  I’ll be taking what’s known as a spreadbet in the UK so I need to bet  per point so £1.31 per point I will do (£150/114)

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How I THINK as a Trader/Investor + Update

Why do we trade/invest?  It should be surely to make money and once we have made money the next consideration ought to be to keep hold of that money – these are over-riding goals throughout our investment lives.

So we know the main goal is to make money and keep that money, well if that’s the case I see no reason at all to giving back profits when markets fall – to me it makes no sense whatsoever.

Let’s look at this:  Let’s assume that we bought something, say a Vodafone share, it rises and rises over the course of a few months and then it falls and falls, back to where we had bought it – To ME what a waste of time owning the share, I could have used my funds and deployed them into something else, made money on that share and then bought into Vodafone’s share.

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Whats Next – Amendment

Yesterdays (Weds 7th Dec 2011) price bar – a wide range bar has altered some of yesterdays fib levels.

I’ve uploaded a new chart to show the position of the recalculated fib levels.  This has to be done as a new high was put in so the old fib levels are now obsolete and the ones in this chart are the ones to watch now!  Trading eh!

Anyway here’s the updated chart, we’ll just see what happens – the new preferred target zone is 5379/5354 & 5238/5218

Figure 1x - Recalculated fib levels

We’ve had a daily bearish reversal so it’s now important to just watch price action as the days unfold.

Remember I’m not interested in trading short this market – the weekly DTosc is still bullish so price might not even make it to the fib levels on the chart, we’ll just wait patiently and what price, we it does all the things we want – we’ll take action then.

What Next?

Hello,

Let’s take a walk through the recent price movements of the FTSE100 index – this is the leading index for the UK market – I don’t trade it that often as I prefer to trade the individual shares within it – unless I’m doing something mega wrong, to me and my mind it’s far easier for an individual share to move 5-10% than it is an entire index.

Take a look at Figure 1 below, something really made the market drop in August (I didn’t get chance to trade that as I was on holiday) but you can clearly say that the bears won the fight

(Please click on the charts for clearer images)

Figure 1

Can we know IN ADVANCE the approximate levels that the market might fall to?  You bet – see Figure 1a below – fib levels created from extreme low to extreme high and projected down for support levels and look what stopped price!

Figure 1a

Now when it hits support we don’t know if it’s going to hold up or not – the main thing is that we were AWARE of those support levels the day AFTER the high was put in – many months in advance!

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