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SadA, I can vouch for slimming down portfolio. I found I lost more money searching for alternatives and spreading myself thinly.
Try not to stress yourself. absorb info and only act (day trade) if you want to. It's not easy for anyone. the more you study, the more it may feel comfortable. Certainly do not risk money until it feels right to do.
Start small and see if it's do-able.
I've got quite a few OCADO and at lot of the time, I probably just don't want to let go of them all because I'm looking towards future.
So, I might start doing what Treacle has already said 20-30 times to me already and deal in 1000 units which could bring in £120 here and there, but often. (now that I have freed up cash from elsewhere).
I think G mentioned something about it - along the lines that he read that you should always do that - I'm not entirely sure though.
Stop losses can be good, but the danger is that they can be hit so quickly, rebound and you're out of pocket - both in monetary terms and number of shares.
Its sods law with Tullow - I've watched them for years, and they've been relatively stable for the last 6-7 years - the last time they were quite volatile was about 5 years ago when they did a rights issue - I'm sure they'll recover, but as an idea, rather than put more money in, when they become more tradeable, why don't you increase your shareholding that way to reduce your average? There's bound to be loads of spikes in them over the next few months as news/recovery takes hold which makes the trading option a lot easier.
I think over the next couple of weeks you will see the pros and cons of the way I do my trading - I've already said I changed my successful strategy last year in favour of different companies and in order to make a true comparison, had to continue to year end to be able to identify which was more profitable on a like for like basis. This won hands down and that's why I've reverted to it.
G's going to have a lot to read later lol
No, I'm not depressed, just sanguin. Did I read recently on this board about someone who always sells on a 7% fall? I used to use stop losses a lot but seem to have got out of the habit. Maybe I should think about that again.
Thanks for sharing your OCDO/Tullow experiences. I only bought Tullow for the first time a few months ago, I had had sucess with PMO, CNE and ENQ mainly due to oil price rises and I thought, with almost no research, I would try TLW and HUR. HUR gave me a little profit and you know what happened to my TLW foray. After the initial fall, I did very nearly buy more at around 138 but didn't (I am actually still scarred by CLLN where I bought them down to zero) and feel OK about having bought more arround 60. I will probably buy some more at current level to get my average price down then sit on them and wait.
With OCDO things are different. I have been following them for a couple of years and have made a couple of good trades. At the start of december I decided to buy OCDO and MRW as christmas gambles making reasonable profit on four trades. In retrospect, TSCO would have been a better bet than MRW.
Yes, I have lots of experience of dealing with several shares at once, most of it bad so I have learnt that lesson. My ambition was to reduce my number of holdings, ever since then they have gone up!!
So I did exactly the same on the 9/12 - assumed the percentage drop and monetary drop from £1.30 odd to 58.81 was the bottom, but as you know, they carried on falling till about 40p that day.
Any share can be traded daily like I'm doing now with Ocado, but it has to be the "right type" of share if that makes sense. One with a bit of volume basically - if there's not much daily movement between the peaks and troughs then it makes it all the harder.
Glad you're already in the habit so to speak.
I always believe if you don't try something then you never know - everyone trades differently, but one word of caution to you in respect of doing the same with a couple of shares - I've tried it and it didn't work for me - if you've got a number of screens that could make the difference , but for me I don't want to go google eyed chasing things if that makes sense - I'm making more than enough for my needs, it's stress/worry free, and if there's more of us adopting the same strategy, we've got more chance of getting things near perfect between us (I hope lol). We've learned that G is better than me at spotting the spikes, but I'm the better one with the shakes so far.
I always try and think of a way of explaining myself to someone else if I use their experience of something if that makes sense - just to prove that I'm by no means perfect, I'll share with you (having looked back on my records) the trades that I have done both with Ocado and Tullow.
I stupidly bought in here on the spike at £13.77 on the 3/12 - I'd seen on Bloomberg the news about the Japan contract and on Bloomberg they were saying that there was going to be at least 20% gains that day - and this just emphasises how panic/emotion can take over - so lets say I bought 1,000 shares at £13.77 - that was a cost of £13,844.80 - obviously the news of the Bonds wasn't well received, so I sold my 1,000 shares on the spike on the 4/12 at £12.34 - so proceeds were £12,334.05 - a loss of £1,510.75 - but I then bought back 1045 shares at £11.73 on 5/12.
In respect of Tullow - I bought at £150.88 on the 18/11 and because I couldn't see any recovery/bounce happening I sold on 20/11 at £138.74 - so more losses yet again. I did however buy back much more on the 9/12 at 58.81. Don't get upset now when you see this, but you bought 6,500 Tullow at £2.12 at a cost of £13,854.85 - if you had sold them on the 20/11 at £1.3874 then your net sale proceeds would have been £9,012.15 so a loss of £4,842.70 - I know no-one has got a crystal ball, and what happened on 9/12 could not have been envisaged so it may be a bit unfair of me to be showing you this, but it does really emphasise the point I've been making about being able to accept a loss, but on the 9/12 you could have either bought 15,237 shares at 58.81 with your £9,012 proceeds from your previous sale, or bought your 6,500 shares for £3847.71 and pocketed £5164.43.
I hope I haven't upset/depressed you now, but you will have read that last year I was trading the shares that were the biggest fallers - my mistake with Tullow and others was thinking/assuming that they would bottom in the mornings because they had been hammered percentage wise and recovery would take place during the day - I thing Tullow did bounce a little, but then continued to fall in the afternoon and stupidly from my point of view, I wasn't watching the graphs.
Continued on next post
I can hardly believe it but I think I watch the chart more than you! Certainly several times an hour. I'm going to try something closer to your tactics from tomorrow. Oh dear, think I will have to get up even earlier than usual. Also, I'm going to set up an extra screen specifically to monitor charts on this site, LSE.
I would like to try your tactics on one of my non Stampy shares as well but I guess I'll probably be too busy with OCDO tomorrow.
I look at the daily chart every morning, and virtually every hour because sometimes if you've "missed" the spike or shake, you can usually tell from the graph that you've missed it especially so if its been a big sudden jump in price.
I understand where you're coming from with the points you raise - some days, especially if a new trend is being established, then there's no spike or shake - its just a gradual grind up or down and you just need to follow the trend that its setting - what do people say - the trend is your friend, and don't do a trade for the sake of it - sometimes doing nothing is the best option.
I think you can see from what I've written, sometimes accepting a loss is the best thing to do - if you took in what I was saying to G about his IAG trade last year, and what happened here after the Japan/Bond news broke, if you didn't take a hit, then its nearly two months of "income" that you've lost out on, ( it sounds to me like the penny has dropped with you) in that money can be made both with a share price going up or down - you just need to change your mindset.
You need to forget about the charges/costs and be mindful of how much a share price has to change to enable this exercise to be worthwhile if that makes sense - if the share price is only going to change by say 5p, then its not worth doing a trade because you know you're not going to cover your costs, but the bigger the gap between buys and sells the more profit you're going to make - I think if you look at what I was saying to G about his trading last week you may see where I'm coming from.
I don't even give churning a consideration - I just focus on my buy/sells/profits at the end of the week - everything else is just noise.
There's loads of different methods to trading - some are more technical traders and go on fibonacci charts (or whatever they are), I've had a look at that, didn't understand it, and because I couldn't get my head around it, it made no change to my trading - it was very much buy at x and sell at a profit.
Like you say, once you get what I'm saying, it is mind-blowing because it does make a difference to how successful you can be. As we're going to be doing pre-briefs and de-briefs every day from now, as time goes by, hopefully you'll really start to "get it" and we'll all be winning.
LSEs graphs are more comprehensive I think.
It all comes down to judgement of course but I find it hard to sell on a peak for several reasons.
1. It's not a peak or even close to one, it's an upward trend.
2. As already mentioned, reluctance to sell at a loss even though it's temporary.
3. Effect of stamp duty eating into sell and subsequent buy back (not an issue on non Stampy shares)
4. My natural aversion to churning.
Of course point 1 also applies to buying on a shake... Down to judgement again.
"What the share price is irrelevant to me"..
...when you said that I understood but it blows my mind.
Who offers more - IG? I think its just whatever works for you that's the important thing.
As I said, I don't use them (perhaps because I don't fully trust them) and I prefer to be able to press the button myself. If I know I'm not going to be able to trade say because I'm taking a day/week off, its not a problem because I view things probably a bit differently and just concentrate on the number of shares I have, so if the market has gone against me while I've been away, and the share price has gone down, then its no problem as I still have "x" number of shares - regardless of their price I still have "x" number, when I'm back, I sell on a spike and buy on a shake and then I've got "y" number of shares, so my profit is the difference between "x" and "y" if that makes sense?
Using that mindset, what the share price is is irrelevant to me which I find helpful because it can go up and down as many times as it likes - the more the better (although I do prefer big jumps up or down as the wider the gap between the sell and buy prices are better) the more shares I'm buying, so the more shares I have by the end of the week, the more profit I've made and at the end of the week, whatever the difference between x and y is is what I take in profit, and I start the following week with x again - hope your following my x and y's there!
Know what you mean about the discipline though - that's exactly what you need in this business.
You caught me rereading your messages, points 2 and 7? Yes, but. The only thing I can think of is that I am using IG charts/graphs and not LSEs. They do seem to offer more info.
One thing that irritates me about using limit trading is that it may not sell all of your order (if any of course). Maybe this is perculier To IG or my luck in setting a sell limit just at or very slightly above a peak. I have never experienced this effect on a limit buy order though.
I surprise myself that I'm not more disciplined at trading especially considering my attachment to money and keeping it!
It's no problem, everyone needs a helping hand at times and I'm just sharing what I've found to have worked for me after a long time of trial and error. Its been useful for me to write everything down as well - especially the bullet points as its reminded me to stay focused - I've now written them down myself and will have them in front of my computer from tomorrow onwards as the one point especially for me is a reminder to not get emotional about the trading.
Great that you're doing them - one thing that I realised I omitted was setting alerts/limit buy/sell orders - only because its not something I do myself as a matter of routine as I prefer to be in control, but its obviously something that should be considered if you're going to be away from your computer and you have some specific target in mind.
It's good to hear that you're already doing most things, I'm surprised to hear though given your previous profession that you don't do these things systematically :-).
I know what your saying about selling on the spike and worrying about where the share price is going in the future, but the "mind game" for want of a better description that I play with myself is right, I've sold on a spike, how many more shares can I buy now on the shake? For me that works wonders because the more shares you have, the more profit you're making so your winning if the shares are going up or down. I think to many people worry about where the share price may be next week for example rather than what its doing today, and its today you should be thinking about/concentrating on and not next week.
Have you missed something - um yes - points 2 and 7 lol - re-read them :-)
Thank you very much for your generosity in sharing with us. I think I do most of those but not systematically. Emotion comes into play for me, I find it very hard to sell on what I perceive to be a good spike. Effectively selling at a loss, even though I "know" I'll be buying back cheaper later. But I have a question, I guess it's down to experience looking at charts but how are you deciding the top and bottom for the day. I assume you know the range for the day from previous day's data. Am I missing something?
8. Emotion is the biggest enemy you will have in trading - control/manage that and you're half way there. The point I'm making here is tomorrow is always another day - if you haven't sold at the top/bought at the bottom, don't punish yourself emotionally - for me, I "work" 40 weeks a year - that's 200 trading days - if I keep beating myself up psychologically if I've got something wrong then I'm always going to be going around in a circle - and without a clear head, you make the wrong decisions trying to chase your tail (I know as I've been there!), so you need to take a longer term view because what you loose on the swings you gain on the roundabouts - nothing goes up or down in a straight line so there's always going to be another opportunity to make good what you missed out on today. To make things a bit more interesting for me, I set myself little goals/targets that I want to get to by certain times in the year - makes it a bit of fun and I think of what I'm able to do with the money once I get to that target.
I think keeping those 8 points in mind will put you in a strong position going forward - its up to you whether you want to adopt all/any of these points, maybe keep them in mind and monitor what happens in the markets over the next couple of weeks against what I'm saying - keep the bullet points that I've given you by the side of your computer and keep re-visiting them until you're confident in what I've been saying - those 8 things are the major changes I made to my own trading which made the difference for me.
SadAct - these 8 points are applicable to most situations - the only difference obviously being the value of the share that you're buying at the time as the range movement will be different - ASOS for example most days has a trading range of £1, yet its purchase price is £31.
As far as dividends go, that's an interesting one. You have to be clever as its all to do with knowing what the ex dividend date is - 9 times out of 10 a share price will fall the day after the ex divdend date by the amount of the dividend and maybe for a few days afterwards as people who bought in for the dividend have now got what they want, and are selling and taking their profit.
Each company is different, and all I can say to that is you just need to consider the company that your buying into, what your investment objective is, the timeframe that your looking to invest for - all the usual things really.
I hope you find the 8 points useful.
7. Is self explanatory really - the graphs/charts are an excellent tool and the more you use them, then the more confident you become. I have noticed though that sometimes, say for arguments sake early in the day that there's a range of £13.10-£13.60 - if the share price hits those figures, and there's no definitive spike/shake, the graph will change to what is now expected to be the revised top/bottom for the day.
1. I find it important to note what the share price is doing on open ( in my experience 80% of the time the following happens) - the only difference being is on days where there is news for the company/sector. If a share opens up, then it will drop usually within 10 minutes of opening - if the shake is early in the morning - 9 or 10, then you know the share is going to rise in the day. If the share continues to drop throughout the day, then you know its going to start down the following day (bit like IAG) last week so you will buy more shares - I've shown how this will impact your trading positively when this happens.
If the share price opens down then buy on the clear shake - it usually turns positive during the day then.
2. The graphs here are very good guides on where the trading range may be for the day - whilst I keep saying there's a 50p range, its not always the case especially with high volume, news driven days - get used to using them and seeing the trend for the day establish itself - I think Fridays graph showed something like £13.10-£13.35 and surprise, surprise, that's where the share traded for the day.
3. If you're not certain whether there's been a spike/shake, which I sometimes have difficulty in identifying with the low volume that we're having most of the time, apart from reviewing the graph, consider the range movement and base any buy/sell decisions on those as well.
4. Stop thinking in terms of monetary gain, start getting into the mindset of selling on spikes, buying on shakes - that change in mindset could completely change your success rate in trading - I gave some examples before in the information I was giving to G about IAG and Ocado - small and often can give you far greater return than one big hit over the longer term.
5. Bit of an obvious one I know, but only buy if its a clear shake - there's a danger that you get tempted to buy because the share price has dropped in the afternoon - it it doesn't bounce, then its going lower the next day.
6. I think a good example about not worrying about taking a loss if the market turns against you is when the news came out here about Japan and the Bonds - I think from memory that the share price went down for a couple of days, but lets say for example that you sold your 5000 shares for £12 ie £59,994.05 (after buying them for £13 for £65,330.95) you would have taken a a "loss" of £5,336.90. If you then used that capital to buy shares again at £11 then you would be buying 5426 shares - so when they get back to £13 and you sell, then you're actually in profit by £5,201 rather than just breaking even. Don't worry about the share price going down as it is an opportunity to buy more shares, and more importantly keep you in the game day after day. If someone had bought the shares here on 29/11 at the peak of £13.90 then they'd still be here twiddling their thumbs waiting for the share price to recover and make a profit.
Continued on another sheet (again!