moosh's diary chapter 3

new september is upon us and so a new chapter begins. thinking back 2 years ago to chapter 1, oh how different things were. but no needs to look back. look forward!! the strategy is now complete. risk is ultra minimized, i'm not throwing major wodges of £ at things now, and the profit is rolling in in small amounts, but more often, so lots of small things will tend to add up to a bigger thing over time. the big hit is great every now and then, but the little ones inbetween keeps the buzz going and makes days a joy to wake up to. i think it's a moosh's world record cos' i managed to bank profits every day for the last 7 trading days! wahoo!!! still more to come next week too! but the best part of it is that i'm not actually buying frequently anymore. the refined strategy is thus:

1. keep a £ lump to invest in a share
2. use ~35% of said lump at the first throw
3. split remaining lump into 5 lots of 13% and throw one of these mini lumps if sp drops 40% from the previous buy.
4. topslice any 10%+ profits if i get nervous, but will take 5% if i see enough intraday sell signals.
5. keep topslicing until sp stops going up, then use the 40% averaging down technique as above if sp then retraces on wotever timescale.

the strategy assumes the extreme that the sp can be anything from 0p to current sp and i always have £ in reserve in case of duff RNSs/duster drills/failed drug trials/share dilutions.

so when is the first throw of the dice? see next post...

when to throw? timing. it's all about timing. in short, i like the slow stochastic oscillator. i personally will have a throw on the day after the slow stoch gets to zero. if it don't get to zero and just goes oversold (anything between 0 and 20) then might still have some then too. wotever works for you i guess. i always use other longer term (weekly/monthly) indicators to get the bigger picture of a share but am more confident of +ve reaction after a slow stoch signal if weekly+monthly macd have crossed up and over and turned up. and if the slow stoch signal fails, there's always the 5x13% lumps i have in reserve so just a case of waiting to see if sp falls to those levels.

a few links to maybe stimulate some thoughts, or just make you think i'm a nutjob. don't care either way.

http://www.guerillastocktrading.com/stock-trading/trade-slow-stochastic-for-killer-profits

http://www.guerillastocktrading.com/technical-analysis/use-the-stochastic-oscillator-wrong-and-stay-poor-or-use-it-right-and-become-rich

http://www.guerillastocktrading.com/stock-trading/a-trader-who-survived-sh-that-would-kill-warren-buffett-reveals-automated-trading-tactic

http://www.guerillastocktrading.com/stock-market/simple-rule-lets-you-double-your-number-of-winning-trades-by-stealing-money-from-amateur-traders

http://www.guerillastocktrading.com/stock-trading/big-money-is-made-in-the-stock-market-not-by-working-hard-but-by-working-smart

http://www.swing-trade-stocks.com/pullbacks.html

http://stockcharts.com/help/doku.php?id=chart_school:technical_indicators:stochastic_oscillato

big list of articles on the guerillastocktrading links at bottom right of page. entertaining and v informative. posted the swingtradestocks link before somewhere but always nice to be reminded.

i post topslices on twitter:

http://twitter.com/moosh87

and a CAZA-cum-TA thread on advfn.

http://www.advfn.com/cmn/fbb/thread.php3?id=23153057

DJ?

and the question mark because? i don't do birthdays or weddings lol. just me mixing the music i like in my bedroom rather than paying to get into a club to listen to wot someone else likes. and besides, clubs are full of people. blurrrgh.

LOL. The question mark because I wa surprised. Not sure why but I was. :-)

the next burning issue i have is when should i reinvest topslices? not done so yet in this new strategy but i'm figuring that the sp has had to have dropped a sufficient amount first. i'm thinking something along the lines of 'if i've topsliced 1000 shares at 50p, then wot sp does the sp have to drop to before i can get 1750 shares (ie, 75% more shares than i disposed of), after taking into account stamp duty+commissions'. after some rough calculations, this would mean the sp would have to drop a huge amount before reinvesting those topslices, which is good cos' most of the time that would only happen during a major downtrend, and i'd be more confident of reinvesting cos' most others might have lost interest by that time. cash is king. not tried it out yet, and still pondering whether i should look for 50%, 75% or 100% more shares for my same topsliced £. but a thought all the same.

...and of course, if the sp does drop to those phenomenally low levels again, then a relook at fundamentals would be a must to see if things have got better or worse since the recent peak.

take a look at STL CDG fundamentals people!