Bad Assed Trader: On reflection I felt I had got a bit gungho about my trades so despite being a Bad Assed Trader I do perhaps have a Faceless Bureaucrat lurking within. So I've gone back and checked the charts on the four new trades I've placed to find reasons not to trade them. And I've spotted a good reason to delete my order for the Xstrata stock. Price action was trending up but has just recently had a lower high (peak on the chart) and a lower low (trough on the chart) which means the trend could be turning down.
I've deleted the trade so now Xstrata is going to shoot up and prove me wrong...isn't it?
Sunday 31 October 2010
On a Roll...
Bad Assed Trader: Buoyed by my early success I have scoured the sectors and stocks and, still maintaining my exacting standards for spotting a trade, have managed to find four more. Well, five really. I forgot to mention that I placed a trade on Derwent (a "real estate" company in the FTSE 250 - I will only be trading with the top 250 stocks as they have the volume needed to behave relatively predictably).
My order to buy Derwent kicked in at the tail end of Friday so I will let you know how that goes later this week.
In the meantime Bad Assed Trader has placed orders to buy:
Britvic (beverages - mmm orange juice) at 487
Bodycote (industrial engineering - smacks of big strapping chaps...) at 267.8
IG Group (financial services - hmmm) at 534
Xstrata (mining - may be a bit risky the way commodity prices are falling at present apparently) at 1243.5
To manage my risk I am only risking 1/2% - one half a percent - on each of these trades, so if they all go badly wrong I'm unlikely to lose more than 2% of my trading capital in total. Even Bad Assed Trader understands that managing risk is paramount in trading. They all look good to go - all bouncing off that 50 Moving Average line etc and trending up, but you never know what could happen. Georgie boy (our distinguished chancellor) could say something to blow them all out of the water - it doesn't take much in these shaky markets to send the investors into a panic.
And the next piece of exciting news....I'll be learning Forex trading tomorrow and Tuesday so hopefully new markets will open their arms to me and tell me there's room for just one more wafer thin Bad Assed Trader....
My order to buy Derwent kicked in at the tail end of Friday so I will let you know how that goes later this week.
In the meantime Bad Assed Trader has placed orders to buy:
Britvic (beverages - mmm orange juice) at 487
Bodycote (industrial engineering - smacks of big strapping chaps...) at 267.8
IG Group (financial services - hmmm) at 534
Xstrata (mining - may be a bit risky the way commodity prices are falling at present apparently) at 1243.5
To manage my risk I am only risking 1/2% - one half a percent - on each of these trades, so if they all go badly wrong I'm unlikely to lose more than 2% of my trading capital in total. Even Bad Assed Trader understands that managing risk is paramount in trading. They all look good to go - all bouncing off that 50 Moving Average line etc and trending up, but you never know what could happen. Georgie boy (our distinguished chancellor) could say something to blow them all out of the water - it doesn't take much in these shaky markets to send the investors into a panic.
And the next piece of exciting news....I'll be learning Forex trading tomorrow and Tuesday so hopefully new markets will open their arms to me and tell me there's room for just one more wafer thin Bad Assed Trader....
Friday 29 October 2010
Unleashing Bad Assed Trader at last - a Successful Trade
Bad Assed Trader: Whilst Faceless Bureaucrat toils at the coalface of NHS management my forces are unleashing... On Monday night I spotted another opportunity to trade. This time it was "DOM-LON" which is not a company peddling rubber/leather/spikey stuff but rather the bog standard Domino pizza chain. I'm a keen pizza fan myself which did warm me to this opportunity. But of course the trade had to meet my exacting criteria and so it did.
To translate a little from my earlier technical entry, when trading it's important to follow the cyclicity of price - when a stock price is going up it doesn't just shoot up, it goes up and then backs down a little, then goes up again followed by another retracement.
We aim to catch the trade when the price has just retraced and is ready to bounce back up again. But how do we know when it is about to bounce back up? We have a number of means, but the most important is to find it bouncing off a particular line on the chart. The best one is the 50 day moving average. This line is automatically put onto the charting software and shows the average price for the last 50 days (with a bit of technical whizz put in which gives stronger weight to the most recent price action). Price likes to return to this line regularly so it's a good idea to catch it when it does and make a trade. When price is going up steadily the 50 moving average runs along beneath it and the price action runs away from it (up steeply) and then whiplashes back to it before bouncing off to shoot up again.
So back to my Domino trade. I spotted it was an uptrend, I spotted it was retracing and I spotted it about to bounce on the 50 day moving average line and hopefully spring back up rather than crash right through. So I placed an order that would be filled if the price went up a couple of pounds from Monday's high. And it did the next day, Tuesday.
Of course I've been checking it regularly to see what happens and now I've just come home from work and checked its progress and there's a tidy £145 sitting in my profit and loss section of my trading account. I had risked about £130 on that trade by placing a stop loss about 19 points below my entry price so that if the price went down I would be taken out of the trade at that level and take that loss - but thankfully it went the right way.
My first successful stock trade....which means Bad Assed Trader has officially been born.
To translate a little from my earlier technical entry, when trading it's important to follow the cyclicity of price - when a stock price is going up it doesn't just shoot up, it goes up and then backs down a little, then goes up again followed by another retracement.
We aim to catch the trade when the price has just retraced and is ready to bounce back up again. But how do we know when it is about to bounce back up? We have a number of means, but the most important is to find it bouncing off a particular line on the chart. The best one is the 50 day moving average. This line is automatically put onto the charting software and shows the average price for the last 50 days (with a bit of technical whizz put in which gives stronger weight to the most recent price action). Price likes to return to this line regularly so it's a good idea to catch it when it does and make a trade. When price is going up steadily the 50 moving average runs along beneath it and the price action runs away from it (up steeply) and then whiplashes back to it before bouncing off to shoot up again.
So back to my Domino trade. I spotted it was an uptrend, I spotted it was retracing and I spotted it about to bounce on the 50 day moving average line and hopefully spring back up rather than crash right through. So I placed an order that would be filled if the price went up a couple of pounds from Monday's high. And it did the next day, Tuesday.
Of course I've been checking it regularly to see what happens and now I've just come home from work and checked its progress and there's a tidy £145 sitting in my profit and loss section of my trading account. I had risked about £130 on that trade by placing a stop loss about 19 points below my entry price so that if the price went down I would be taken out of the trade at that level and take that loss - but thankfully it went the right way.
My first successful stock trade....which means Bad Assed Trader has officially been born.
Sunday 24 October 2010
No go...for now
Faceless Bureaucrat: Ah well, Bad Assed Trader has ducked out for now and killed the trade we put on as it didn't trigger. No money lost, none gained. We have to stick to the rules and if it doesn't trigger we let it go and move on. Too bad. An inauspicious start.
And apologies that Bad Assed Trader got so carried away in our last blog that she showed off all her technical terms without explanation. She is a bit of a show off, hence the bad assed bit. We'll strive to do better next time and thanks to Poobah for pointing out the error of our ways.
We're on the lookout for further trades but have had a few friends over for dinner and was preoccupied today with having fun. Back to the grindstone tomorrow...oh, and the Forex training will hopefully get things moving a bit faster very soon. Can't wait.
And apologies that Bad Assed Trader got so carried away in our last blog that she showed off all her technical terms without explanation. She is a bit of a show off, hence the bad assed bit. We'll strive to do better next time and thanks to Poobah for pointing out the error of our ways.
We're on the lookout for further trades but have had a few friends over for dinner and was preoccupied today with having fun. Back to the grindstone tomorrow...oh, and the Forex training will hopefully get things moving a bit faster very soon. Can't wait.
Wednesday 20 October 2010
Found a Trade!
Bad Assed Trader: Finally! Just as I was nearing the end of my tether a trade has appeared and I've placed it! I'm going long on Senior (Aerospace and Defence sector - trending up well) daily cash rolling trade. I'm going in at 142.8 with my stop loss at 134.2. This means my risk is 8.6 points. I'm staking £7.73 on each point - less than 1% of my account as it's early days.
Let's see how this goes tomorrow. I think the trade meets my criteria, it's bouncing off the 20 day moving average and an upward trend line, the volume is over 500k and the MACD indicator is converging. Cyclicity looks good so I'm up for it.
Will report in due course...
Let's see how this goes tomorrow. I think the trade meets my criteria, it's bouncing off the 20 day moving average and an upward trend line, the volume is over 500k and the MACD indicator is converging. Cyclicity looks good so I'm up for it.
Will report in due course...
Is Perfection the Enemy of Good?
Faceless Bureaucrat: Well call me a perfectionist if you will but I'm not finding the trade that meets the exacting criteria I've been given. But I'll let you in on a secret, despite having had no success as yet with the stocks I have not given up because there is Hope. At the end of my two day course I signed up for another course - in Foreign Exchange trading, otherwise sexily known as "Forex".
Why Forex? Well the traders who were there supporting the course told me that it's far more interesting, fast moving and lucrative than stock trading. And because of its size - three trillion dollars a day traded - it's far more difficult to manipulate so you don't get the level of insider knowledge affecting your technically placed trades. This makes it a more predictable market to trade. Faceless Bureaucrat likes the sound of predictability when one is looking for trading action. The traders tell me that Forex is ideal for intraday trading (where you get in and out of a trade in hours or even minutes - sounds exciting!) and once you've mastered the trade you really can generate an income to live off.
So although I continue to run my searches for bouncing share prices to get a good short term deal I am really now holding out hope for the Forex training turning me into that Bad Assed Trader I so yearn to be.
Meanwhile, it's touch and go as to whether FB will still be in a job post April. Although the NHS has come off relatively lightly compared to other sectors in public service in the Spending Review our region is looking to cut management costs by about half. Our team, which provides support to other teams who are top sliced to fund us, have been told we have to be self funding after April. In many ways this seems eminently sensible, we know that those who we support value us as we continually evaluate their satisfaction with our service, but whether they will still feel able to pay for us once the mechanism to do so becomes more Pay-as-you-go remains to be seen. It'll cost more to administer that's for sure...
Why Forex? Well the traders who were there supporting the course told me that it's far more interesting, fast moving and lucrative than stock trading. And because of its size - three trillion dollars a day traded - it's far more difficult to manipulate so you don't get the level of insider knowledge affecting your technically placed trades. This makes it a more predictable market to trade. Faceless Bureaucrat likes the sound of predictability when one is looking for trading action. The traders tell me that Forex is ideal for intraday trading (where you get in and out of a trade in hours or even minutes - sounds exciting!) and once you've mastered the trade you really can generate an income to live off.
So although I continue to run my searches for bouncing share prices to get a good short term deal I am really now holding out hope for the Forex training turning me into that Bad Assed Trader I so yearn to be.
Meanwhile, it's touch and go as to whether FB will still be in a job post April. Although the NHS has come off relatively lightly compared to other sectors in public service in the Spending Review our region is looking to cut management costs by about half. Our team, which provides support to other teams who are top sliced to fund us, have been told we have to be self funding after April. In many ways this seems eminently sensible, we know that those who we support value us as we continually evaluate their satisfaction with our service, but whether they will still feel able to pay for us once the mechanism to do so becomes more Pay-as-you-go remains to be seen. It'll cost more to administer that's for sure...
Sunday 10 October 2010
Needle in a haystack
Faceless Bureaucrat: Having spent an hour or so putting my checklists together I have today spent a few hours wading my way through sectors and stocks to see if anything fits the bill - or ticks the boxes (something we faceless bureaucrats just love). It has to meet the exacting requirements I have been taught. Now maybe I'm too fussy. Or perhaps unable to see what's right in front of my nose, but it's like searching for a needle in a haystack this search for the elusive trade.
I found quite a few sectors that are trending quite well - I saw evidence of recent "golden crosses" where the 50 day moving average crosses up through the 200 day moving average (showing an increasingly strong uptrend) such as on Household Goods. I saw evidence of a sector stumbling as it approached a Big Number - in this case 4000 (Media Sector). Apparently Big Numbers have this affect quite often - it's all to do with trader psychology.
I saw that the Banking Sector trend looked pretty indifferent and really quite shady and that Construction is flat. I'm learning something about what's going on in the real world from seeing these charts it seems, which is quite interesting but not making me any money.
Having found some good sectors like Travel & Leisure, Pharmaceuticals, Mining and Automobiles, I've drilled down into the stocks themselves. As I'm looking to go long (buy) in line with the FTSE going up I'm looking for evidence that price action has retraced (moved down) to a moving average line and is about to bounce back up. It's important I don't get carried away, as amateurs like me do, by seeing sharp moves upwards. The traders say "If you've seen the move, you've seen the move" - which means you've missed it. Move on. Don't try to chase a trade, you lose money. You have to be able to recognise the signs that the price is about to move in your direction and put the trade on before the price moves substantially - catch the move.
I'm looking to find the price hitting the 50 moving average (MA). This is apparently the best one as price action always keeps returning to it eventually - it's like it's on a piece of elastic and can only stretch so far away from this line before springing back to it.
But each time I find price has returned to the 50 MA I find some other problem with the set up. Maybe the trend looks like it's starting to turn with the higher highs (peaks) levelling off and even a lower low (trough) appearing. I'm looking to go long (buy) and so I must have continually higher peaks and higher troughs as evidence of a good strong trend.
Or I find that there are what's called "roadbumps" in the way of my expected increase in price. This might be a big number in the way and evidence that the price has reached this before only to be pinged back down - and if this has happened more than a couple of times this is called "resistance" - it's like an invisible ceiling holding the price down. I don't want a ceiling blocking my trade from moving up in the right direction.
And finally, I've been checking an important indicator called "MACD" which shows whether the moving averages are converging or diverging and if it doesn't look similar to the pattern on the chart then that's a danger signal and I should avoid the trade. That managed to wipe out the last few promising looking trades - MACD was showing lower highs or lower lows and indicating that the trend may be tailing off.
But at least I've noted down a few stocks to watch over the next few days in the hope they will start to set up in the way I need to place a trade.
So I'm calling it a day for now without putting on any trades. But I've been a good girl and done my work as planned so I'm allowed that glass of Chablis as a reward. Apparently it's important we reward ourselves not for winning trades but for following our plan. Faceless bureaucrat likes that concept.
Looks like bad assed trader will have to wait a bit longer to come into being....
I found quite a few sectors that are trending quite well - I saw evidence of recent "golden crosses" where the 50 day moving average crosses up through the 200 day moving average (showing an increasingly strong uptrend) such as on Household Goods. I saw evidence of a sector stumbling as it approached a Big Number - in this case 4000 (Media Sector). Apparently Big Numbers have this affect quite often - it's all to do with trader psychology.
I saw that the Banking Sector trend looked pretty indifferent and really quite shady and that Construction is flat. I'm learning something about what's going on in the real world from seeing these charts it seems, which is quite interesting but not making me any money.
Having found some good sectors like Travel & Leisure, Pharmaceuticals, Mining and Automobiles, I've drilled down into the stocks themselves. As I'm looking to go long (buy) in line with the FTSE going up I'm looking for evidence that price action has retraced (moved down) to a moving average line and is about to bounce back up. It's important I don't get carried away, as amateurs like me do, by seeing sharp moves upwards. The traders say "If you've seen the move, you've seen the move" - which means you've missed it. Move on. Don't try to chase a trade, you lose money. You have to be able to recognise the signs that the price is about to move in your direction and put the trade on before the price moves substantially - catch the move.
I'm looking to find the price hitting the 50 moving average (MA). This is apparently the best one as price action always keeps returning to it eventually - it's like it's on a piece of elastic and can only stretch so far away from this line before springing back to it.
But each time I find price has returned to the 50 MA I find some other problem with the set up. Maybe the trend looks like it's starting to turn with the higher highs (peaks) levelling off and even a lower low (trough) appearing. I'm looking to go long (buy) and so I must have continually higher peaks and higher troughs as evidence of a good strong trend.
Or I find that there are what's called "roadbumps" in the way of my expected increase in price. This might be a big number in the way and evidence that the price has reached this before only to be pinged back down - and if this has happened more than a couple of times this is called "resistance" - it's like an invisible ceiling holding the price down. I don't want a ceiling blocking my trade from moving up in the right direction.
And finally, I've been checking an important indicator called "MACD" which shows whether the moving averages are converging or diverging and if it doesn't look similar to the pattern on the chart then that's a danger signal and I should avoid the trade. That managed to wipe out the last few promising looking trades - MACD was showing lower highs or lower lows and indicating that the trend may be tailing off.
But at least I've noted down a few stocks to watch over the next few days in the hope they will start to set up in the way I need to place a trade.
So I'm calling it a day for now without putting on any trades. But I've been a good girl and done my work as planned so I'm allowed that glass of Chablis as a reward. Apparently it's important we reward ourselves not for winning trades but for following our plan. Faceless bureaucrat likes that concept.
Looks like bad assed trader will have to wait a bit longer to come into being....
Saturday 9 October 2010
Getting started
Faceless Bureaucrat: The two day course was everything it promised to be. I arrived having watched all the DVDs, having opened my spreadbetting account with MFGlobal and having purchased my eSignal charting software. I was ready to rock.
I confess that I was nervous on arrival. I had tried to psyche myself up to boost my confidence but my usual rallying cry - hey I'm a senior manager in the NHS, I can handle anything - wasn't sufficient when I opened the door to see who else was going to be on the course. The room was packed with young men and most of them looked very business like. Wheelers and dealers, I thought. My heart sank a little as I felt quite out of place, being a woman of a certain age which shall as yet remain undisclosed in order to preserve the frisson of sexiness I have tried to establish with this blog. NHS managers? Sexy?! Come off it....
Well I tried.
Anyway, fortunately I spotted another woman of about my age who I had met on the free seminar and could become a co-conspirator. Judith is a lovely lady and as we chatted it emerged she had, in her earlier years, done a degree in maths and psychology which sounds like a perfect combination to equip one for trading (although I guess economics would come in handy too). I did psychology for my degree and my parents both did maths degrees so I felt a camaraderie developing here.
Judith and I sat together and helped one another (she was definitely better at the maths than me) and marvelled at tutor Craig's ability to keep us engrossed throughout the two long days.
So now I am ready to trade. However, the first step is to do the analysis of the sectors and the stocks themselves. I need to establish whether the FTSE is up or down first. If it's up (and it seems to be) then I should be looking to go long (buy) on stocks and I should find sectors that are clearly trending up and then look for stocks that are also going up within those sectors. Craig told us to do this analysis and then develop a watchlist of the sectors and stocks to trade in. He did say that he had a watchlist of his own which he could have shared but it was important we do the work ourselves and get used to doing the analysis.
So this is my work for the weekend, lots of analysis. I have already decided that imposing some discipline on myself is required. I need to have some checklists to complete so that I am objectively assessing these sectors and stocks and also prior to placing any trades. This should jolly well force me to work through it properly rather than just jumping in and trading willy nilly.
Oh the joy! Faceless bureaucrat loves devising checklists of all description. I shall spend a few happy hours doing this before getting on with the analysis. I also read somewhere that I should have a trading plan with rewards and punishments for either properly following my plan or rebelliously diverging from it. That should be fun to put together too. And perhaps then I will be ready to actually start trading....
I confess that I was nervous on arrival. I had tried to psyche myself up to boost my confidence but my usual rallying cry - hey I'm a senior manager in the NHS, I can handle anything - wasn't sufficient when I opened the door to see who else was going to be on the course. The room was packed with young men and most of them looked very business like. Wheelers and dealers, I thought. My heart sank a little as I felt quite out of place, being a woman of a certain age which shall as yet remain undisclosed in order to preserve the frisson of sexiness I have tried to establish with this blog. NHS managers? Sexy?! Come off it....
Well I tried.
Anyway, fortunately I spotted another woman of about my age who I had met on the free seminar and could become a co-conspirator. Judith is a lovely lady and as we chatted it emerged she had, in her earlier years, done a degree in maths and psychology which sounds like a perfect combination to equip one for trading (although I guess economics would come in handy too). I did psychology for my degree and my parents both did maths degrees so I felt a camaraderie developing here.
Judith and I sat together and helped one another (she was definitely better at the maths than me) and marvelled at tutor Craig's ability to keep us engrossed throughout the two long days.
So now I am ready to trade. However, the first step is to do the analysis of the sectors and the stocks themselves. I need to establish whether the FTSE is up or down first. If it's up (and it seems to be) then I should be looking to go long (buy) on stocks and I should find sectors that are clearly trending up and then look for stocks that are also going up within those sectors. Craig told us to do this analysis and then develop a watchlist of the sectors and stocks to trade in. He did say that he had a watchlist of his own which he could have shared but it was important we do the work ourselves and get used to doing the analysis.
So this is my work for the weekend, lots of analysis. I have already decided that imposing some discipline on myself is required. I need to have some checklists to complete so that I am objectively assessing these sectors and stocks and also prior to placing any trades. This should jolly well force me to work through it properly rather than just jumping in and trading willy nilly.
Oh the joy! Faceless bureaucrat loves devising checklists of all description. I shall spend a few happy hours doing this before getting on with the analysis. I also read somewhere that I should have a trading plan with rewards and punishments for either properly following my plan or rebelliously diverging from it. That should be fun to put together too. And perhaps then I will be ready to actually start trading....
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