Executed trade

Hi,

I just wanted to quickly show you a trade that I took for my pension fund on Friday 3rd February 2012 and exited the trade on Monday 6th February 2012 = 2 trading days.

The trade resulted in a profit of 2.58%, less commissions/trading fees so I nett’ed just under 2% as a return.  The risk was 2% so this was a 1:1 trade and lasted less than 2 days.

I do, do a lot of 1:1 trades, it’s just my nature to take off profits when they’re there!  If you think in terms of an account being £100k then a 2% profit is a decent sum, but it’s also a lot to lose on one trade too!  But for someone with £100k of funds it might only mean trading twice per month to generate a very decent income, obviously if you trade more you’d make a lot more – but you would have a couple of losing trades too.

What made me take this trade?  The 2 key things were 1) the WEEKLY 8 DTOSC was a fresh BULLISH reversal and the DAILY 8 DTOSC just made a fresh BULLISH reversal – Price had also stopped just above the 70.7% Fib level

This is an automatic LONG trade for me – No Elliott Wave counts or time aspects just pure price levels and DTosc reversals.

Look at the chart:

Vodafone

Point 1 is my Entry zone, point 2 is my Stop and point 3 is where I got out – please note that I’ve written this post prior to uploading the chart, I wanted the chart to show Wednesday 8th February 2012’s DTosc position, so you can see what the markets actually done after I’m out of the trade.

Now I got out of the trade on Monday 6th Feb during the day – If I’d have not got out at a target level and I’d simply waited for the DTosc to reverse I’d have not made any money as, as I type price is below point 1!  This is why I disagree with people who say you should not have a target level.

Now For this trade I have made a couple of mistakes (on purpose I might add):

  1. I actually entered this trade intra-day at a price lower than 173.40 – this reduced my risk exposure massively
  2. I’ve more than likely exited this trade way too early, I got out @ 177.913 exactly – but the daily DTosc is still bullish so really I should have stayed in the trade until the daily  DTosc got OB or it reversed
  3. The reason I got out was/Is that the main markets are severely OB and I’m just playing cautiously for the time being and preserving gains at the minute is a priority for me – like I said I don’t like to lose money!
  4. Just because I’m expecting the main markets to fall for at least a few weeks does not mean that I can’t be long individual stocks, remember, some stocks rally when the rest are falling!
  5. I bought real shares where for my pension fund I usually buy an option like trading instrument called a covered warrant but I didn’t look.

I did not look at any chart patterns or trendlines or the like just simply my indicator and fib levels.

Now some of you reading this will be thinking 2% is not much – you need to think of it like this – what if I’m making 2% a week on my entire account(s) that’s over 100% profit/growth/return a year.

How many people actually make more than 50% a year on a regular basis?

There is nothing wrong with taking 1:1 positions as long as they seriously outweigh the losing trades you will have.

Also look what I managed to do, not guessing, I managed to catch the bottom!  Admittedly I didn’t catch the absolute low/bottom, but using my analysis I managed to catch the approx level where the market STOPPED falling and reversed higher – I was only interested in the long position.  Don’t let people tell you it can’t be done, it can with a high probability of success.

I did not have to sit in front of the screen all day Friday and Monday either – I set my target levels and let the trade look after or fall itself.

For me trading is NOT about finding a share that could double overnight, I’m not interested in that, what I want to do is take small chunks from the market but often and limit my risk.  If the main market rallies 300% and I only make 100% I’m fine with this as I know the following year the main markets not likely to manage that again and I’ll just continue doing what I do.

This will be my last post showing trades for a while – I simply play the same game as often as I like as above in previous posts – I want to focus on developing the other aspects of trading rather than just looking at trades.

Take care and until the next post.

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1 Comment

  1. Update: as of the close Thursday 9th Feb the share price reached a LOW of 170.70.
    If I’d still been in the trade it would have come very very close to stopping out the trade – for those of you that want more longer-term trades – this style is not for you. I’m happy to dart in and out of trades taking 2-3%, I prefer 5-10% though BUT if 5-10% is not on the table and only 2-3% – I’ll take the profit every time. The 8 DTosc is behaving nicely and the next bullish reversal might warrant another long trade to see where that takes us.

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