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Its the way I feel comfortable in trading/investing - to me its all about balance - as long as I'm earning enough to cover my needs, anything more is a bonus. I know we've had this discussion before about eggs in baskets, but I've only got a percentage of my overall capital invested and an amount I'm prepared to lose - it wouldn't impact me greatly going forward if that makes sense and I'm not going google eyed like I was last year trying to track a few things at the same time.
If you can make it work for you, then that will be fantastic - I've still got ASC at the minute, but as I was saying to you the other day, they are very volatile, the price range is quite wide, but you need to watch them like a hawk as the movements both ways at times can be very swift and sharp.
N/T is negotiated trade - if for example there's a lot of volume/volatility and you want to buy a lot of shares, then sometimes the MM's will make you put an order in for your purchase/sale rather than be able to execute the trade yourself there and then and you get whatever the buy/sell price was at the time the order went through. The other alternative is to wait for the volatility to die down and do your own trade but there is the potential that you could lose out either by a rising price or a falling one - probably a bit like Fevertree would have been like the other day.
I like the idea of resetting to a fixed number of shares on monday morning.
I have only been playing with a relatively small number of shares in OCDO, FEV and ASC to try out your system. I think I can make it work for me so I will increase the numbers.
Regretably, I haven't sold any ASC yet so can make no comparison.
Didn't understand "N/T"
As I said, it's a system that I found works for me, but wasn't sure in monetary terms whether it was a good return or not - I just know that compared to last year, other years were more profitable, and if for arguments sake I say ok, I've got 5,000 OCDO shares now, and I trade them day in, day out, ( based on my average returns with ASC) that means I increase the number of shares by 15% during the week, so in this example, 15% of 5,000 is 750 shares. 750 shares at £13.26 from Friday afternoon would equate to £9,945 - well roughly dependant on Monday but I don't want to over complicate my explanation. If the share price increases to £25 by the end of the year, then roughly 750 at £25 is £18,750 so obviously the higher the share price, the higher the weekly "income".
Again, using the example of 5,000 shares - at today's price, my capital is £66,300 - if the share pice increases to say £42, then my capital is now £210,000 - and this is what I'm hoping will happen. So as with ASC, I have a maximum amount of shares that I feel comfortable trading with - an amount thats relatively easy and quick rather than having to go to N/T - everything above that figure gets transferred to cash and to the bank account as I have various plans/projects that I've got ongoing, and then Monday the dial gets reset and I've got 5,000 shares. I work to quarterly targets so as long as I'm achieving something every week I'm happy.
I was trying to explain to my friend yesterday about ASC from Thursday/Friday - she's interested in "dabbling" in the market, so we have training sessions now and again. Anyway, using this example, ASC peaked at £34.00 on Thursday, so you could have sold 1,000 shares for £34,000, then Friday morning you could have bought 1062 shares at £32.00, sold them at £32.89, and then bought 1,112 at £31.50 - so in percentage terms 11% increase in the number of shares - if for arguments sake that was the whole week, then you would sell the extra 112 shares at £31.80 which is £3561.60 income.
Alternatively, if 1000 shares is the maximum amount that you want to hold, then you would have sold at £34.00, bought back at £32.00 and banked £1994.05 then sold 1000 at £32.89 and bought at £31.50 and banked £1378.10 - I know I've included Thursdays likely outcome there, but looking at that, does it compare well against your trades for the same period?
Your approach to trading is no different to many others, or mine when I first started - I used to use T+10 settlement, and because of the volatility, traded the banks and you can imagine how that turned out - averaging down etc. I learned this way of doing things because of what happened to the Banks, but I also found that if a company was struggling - I'll use Lonmin in this example, it was great because the volatility was there initially, so increasing the number of shares was easy because of that volatility, but then the company not recovering as you were "expecting/hoping" really played havoc with my
I'm impressed, I haven't made those sort of consistent gains since my pre CLLN days. That really did knock my confidence. I think I have more invested than you in total but I am not getting a good return lately.
Weekly profit in percentage terms or money is sort of meaningless with the way I have been operating. It depends on when I sell a share and realise the profit. I can remember fabulus days, the whole market was up, several of my shares were above my expectations so I sold several holdings in that day so suddenly, big "profit". Then other times are barren and little or no profit is realised. My method, if you could give it that title is probably the most used one by PIs which is to sell high, buy cheap but on a macro scale, using down days as opportunities to top up. I used to take full advantage of the old TDW allowance for extended settlement up to 20 days. This is gambling of course, usually worked for me and is a way of investing (nay, gambling) using OPM, Other People's Money.
I was reading it back myself, and I suppose because I "think" in terms of number of shares, it probably means absolutely nothing to you - if I translate it into monetary terms, it may help with the understanding - so my worst week was a 6.13% increase in the number of shares - I used to trade 3000 shares on Asos, so my capital invested was £79,200 so my gain that week was 183 shares @ £26.40 (share price at the time), so £4,831.20.
My best week was a 31.6% gain - I think that was leading up to the end of a tax year, so that made it 948 shares @ £35.70 (price at the time) so £33,843.60 - but with the increase in price, my capital invested was now £107,100. Average over 27 weeks was 15.68% - so 470 shares at whatever the price was throughout that time period if that makes more sense? At its peak of £70 odd pound, because I was still trading the 3000 shares, they were now worth £210,000 rather than the £79,200 I had started with (only as a result of the significant rise in the share price).
The only reason I was saying that was just trying to explain why I'm happy to do what I'm doing and why I was staying with Ocado, but you're right, what works for one may not work for another, and probably, for the amount of capital invested, if it was spread across different assets, that greater returns can be achieved, but for me, its been enough for my needs and the trading has suited my temperament for want of a better description.
I think it is the discipline/structure that makes the difference for me, and with this way of trading you are very much at the mercy of the volatility in the share price, and that's why I suppose I've been frustrated in the last few weeks, buy you're right, I do need to buy in tranches at the moment.
I hear what you're saying about the breakout - but over a long time frame, missing one opportunity doesn't spoil the longer term game if that makes sense, and I suppose the reverse can be true that if you're not in the market and unexpected bad news comes out then you're not taking a hit - swings and roundabouts and Rule 8 springs to mind lol - I think what we both agree on though is how much psychology plays such a big part in trading.
I'm going to have a look at HL charts in the morning to see if they give something similar to LSE - ie indicators of tops/bottoms for the day, but I think you're right, I think it could be a down day just because of this virus. I suppose there's one benefit in all of this is that its China New Year so their markets are closed so there can't be any panic selling there that can have a knock on effect here.
I'm still taking all that in but, to quote you, you have to do what works for you.
I think you are trading well, you are following a methodology which gives good discipline. Obviously you can't control the range of share price each day, so an element of luck is needed there ( but only insofar as a greater range would effectively speed up rate of trading and hence, hopefully, profits). I hope you do try tranching. It's not always appropriate and I tell you from experience that it can make record keeping complicated. Did I mention one added advantage is that you are more likely to have stock in the event of a step/breakout of the share price. Sometimes it can reduce overall profit. For example, psychologically one is more likely to sell the first tranche early as there exists the backstop of selling the second tranche IF the price moves higher, of course the price might not move higher, so you have a smile on your face (and then wonder why you didn't sell both tranches/all your holding!! This where judgement and confidence in call the spike/shake comes in, if very confident, sell both etc.
My trading is not disciplined. I have made money but feel certain I could make more with more application. It doesn't have to be application to your method but rules are good and can see you through moments of panic.
I see the ftse going down tomorrow, only on the basis that it has made reasonable progress lately.
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So the reason I chose Ocado is that I see over the next 3-5 years (which ties in to my 5 year plan) I envisage the share price increasing quite substantially, and if that does happen, then I'll have the same double whammy that I had with ASC. I can't see ASC's share price has the potential to grow again as much as Ocado's, so for every 400 shares of ASC, if they went to £40 then they would be worth £16000, yet 1000 Ocado's shares could potentially be worth in excess of £45K by then (that's comparing like for like as at today if that makes sense).
The only spanner in the works which you have now made me think about is the stamp duty - would the 0.50% on each buy erode the benefit of the potential share price increase that I would anticipate over that timeframe - if only we had a crystal ball.
You're completely right in what you say about my focus - I am afraid of missing out on opportunities with OCDO, and I know from past experience, trying to juggle too many plates/shares has not worked out to my benefit in the past and that's why I prefer to concentrate on just the one.
If you're wondering why, after all this am I still working, I've got one word - Divorce! This has meant I've had to extend my "working life" a bit longer, but my plan is carry on doing "full time" trading for the next 3 years and as my capital builds up again it enables me to replace/improve on a few things as a result of the divorce, then "work" part time for 2 years to build up my capital and then diversify my portfolio even more which will by then include some high dividend paying shares (not to trade just invest longer term for income).
I think this week may be a bit volatile on the market though - I think this virus may start to create a bit more worry, but I think talking about things in the morning has been quite a good thing to do so far.
S - with our chatting last week, and our different approaches/strategies in trading/investing, it prompted me to re-visit/reconsider my strategy for this year - I've decided I'm going to carry on trading Ocado for now, and if the volatility doesn't return, then I may go back to trading ASOS - as I said the other day, I'll give it until the results come out and a bit longer for the figures to be digested before I make any definitive decision, but one thing I agree with you about is I need to consider buying in tranches at the moment with the lower volatility because I'm just not reading the swings correctly at the minute.
It's been a good exercise for me to undertake, as it's reminded me why I chose to trade Ocado for this year - I think because it was a few months ago that I made my choice, I lost touch with the reasons I made this decision, but re-visiting past trading on ASC has reminded me why.
As I said to you before, I started trading ASC back in 2014 when the share price crashed from £70 down to £17 - and as sad as I am, I do keep meticulous records, so reviewed a 6 month period (well 27 weeks actually), to see what my "income" was averaging - as you know, I base my profit on the increase in the number of shares I end the week with, and my worst week in that period was leading up to Xmas and I only achieved a 6% increase in the number of shares, with my best week being in the March and that gave me a 31.6% increase in the number of shares - the average over the 27 weeks was 15.68% so a good earner, not just by way of income, but by way of capital growth - 1000 shares in December 2014 was worth £26,400, but that same 1000 shares by mid 2018 was worth £70,000 - so a double whammy in some respects - regular income and increase in capital.
I've also mentioned that I "review" my trading year towards the end of every year, to then decide on my strategy for the next - ASC served me well for a few years and there was no reason to change from that, but what I have found is that trading a share in an uptrend is far more profitable than trading one that's on a downtrend and that's what happened to ASC during 2018 - if its not broke, don't fix it as they say.
During 2019 I went off piste from what was previously a successful strategy mainly because other people were saying about eggs in baskets, dependance on one company - all the reasons why we shouldn't invest in one company, so I switched things about a bit and started trading companies that had been hammered one day expecting a recovery the next - and as I've said, that didn't prove to be as profitable for me as ASC had been.
My reason for choosing OCDO to trade this year was that I'm hoping to have the same sort of success that I enjoyed at ASC - I know the volatility isn't there at the moment, but if I can repeat what I did at ASC with OCDO I'll be really happy.
To be continued
Good morning T. For me "Good Shopping Trip" is an oxymoron. It got done, I spent my time enjoying myself, reading, writing and drinking tea in cafes, oh, and a walk along a sea front . She did the actual shopping business, apparently she did a good job of it as there is now more stuff in the house!
I haven't got anything earth shattering to suggest after reviewing the last week other than to repeat things already mentioned. Buying/selling in tranches. I already do this sometimes. For you, it would get/keep you in the action instead of having to sit on the sidelines without stock for a day or so. Yes it makes trading slightly more complicated (+extra charges) but I think I can report it has nearly always worked out well for me. You are a long term believer in OCDO, as am I, I even said last week that I wanted some shares to hold longer term, that idea lasted about two days and I sold all my holding (bought as 2 tranches) on a nice spike.
Sort of brings me to my next observation, we should do as we previously decide, unless big extenuating circumstances have/are occuring. This certainly applies to me.
Also I want to use all the money from a share sale to buy on the next shake, I only managed to do this for about half of my share buys this last week, partly forgetting and partly being simply too busy.
On the whole, I think your method is OK, the return is proportional to the daily range available, on low range days,more finesse ( or no trading) is needed. I'm glad you are back into ASC, I think it will be easier to make profit without stamp duty. Perhaps you are concerned that you will not be able to give OCDO your full attention and that your trading there will suffer? Let's try it for a week. Perhaps adding "tranchification" to the mix at the same time is risky?
Hope you had a good shopping trip yesterday S, and that you spoilt your wife rotten with all that profit you made last week.
I was doing some homework earlier - I'll detail it a bit later, but my reason/purpose for doing it was partly because I was reflecting on the last week, but partly to remind me why I'm focused/concentrating on Ocado and why it forms part of my "retirement planning".
S - Is there anything that you picked up on after reviewing last week that we need to be aware of going forward?