Taking Profits to Give Margin Room

I’ve held CHW for a couple of weeks now and it’s had a high of £150 paper profit for me. Today the price dropped a few points and reduced my paper profit to £90. I decided to ‘double down’ at this point after reading p.165 chapter VII of ‘Reminiscences of a Stock Operator‘ last night. In the chapter, Jesse Livermore suggests somwthing he describes as ‘pyramiding’. The gist seemed to be that when you are in a positive swing in your direction, buy more, “stocks are never too high for you to begin buying or too low to begin selling”…

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Too Scared to Play Today

Been a quiet day today after the big losses of yesterday. I basically bottled out of any trades for the best part of the day because yesterday’s £100+ loss in one trade really shook me up. When curiosity got the better of me and I logged into my account I was pleasantly surprised to find my only open position in Chime Communications (CHW) was up by 5 points at £10 a point – giving me a £50 profit.

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Market Mind Games

Opened Positions

Spread Bet Longs:

  • Brent Crude 11036
    After my success yesterday, I wanted to see if I could apply the tools/systems I used to other markets. I want a fast moving market that offers the potential of quick gains. I decided to try brent crude. I can see a trend that clearly looks like its rising so I feel I’ll just go in here and hope to ride the trend.

    • £2 @ 11036
    • STOP LOSS: 11021
  • SPOT GOLD 1616.02
    Went long here on the back of a tip from a market analaysis tool which suggested outlooks were bullish and on target to hit 1625. This later proved to be very foolish. Yesterday’s trades were good, based on a very simple tramline system which I felt made sense to me. In that tramline, I felt 1615 was a good time to get out of the market and yesterday, it proved to be true. Today, I read some analysis, went against my instinct and made a big punt on someone else’s advice.

    • £25 @ 1616.02
    • STOP LOSS: 1611

Spread Bet Shorts:

None

Closed Positions

  • SPOT GOLD (opened today)
    • £25@ 1616.02 hit its STOP LOSS at 1611 resulting in a BIG LOSS = -£125.50
    • Annoying thing with this is that literally the minute after I was closed out, the market headed back up. Was I just scalped by IG Index or did I make a bad trade?
  • BARC (opened 2nd August)
    After my big loss with the gold above, I panicked and went against my original plan to hold this for longer and sold out despite the shares still looking like increasing in value. Yesterday evening, these closed at +£40 for me and today I’ve panicked and wimped out to sell for a smaller profit in order to offset the gold losses above.

    • £5 @ 170.02 closed at 173.48 = +£17.30
  • EMG (opened 2nd August)
    Similar to BARC above, I sold this after I took a big loss on gold, despite my original plan to HOLD UNTIL 14th August! The market is playing mind games with me.

    • £10 @ 81.632 closed at 83.72 = £+20.88

That’s me done for the day. Too much stress. Only have 1 open position now and that is CHW, which was opened on 31st July at £10 a point.

Loss for Day

-£87.32

6th August 2012

Opened Positions

Spread Bet Longs:

  • SPOT GOLD (DFB) 1606.31
    • I said I’d have another look at this today in Friday’s diary because I still think the trading signals and general market sentiment here looks like it’ll push gold up. When I say ‘trading signals’, I really mean my simple tramlines – and they still suggest this is going back up to 1615.  I’m combining that guess with the daily news where “The dollar fell to a one-month low against a basket of currencies <.DXY>, helping gold to gain slightly, although the overall sentiment for bullion remained mixed amid a lack of clarity on the macroeconomic policy front. U.S. employers hired the most workers in five months in July, but an increase in the jobless rate to 8.3 percent kept the prospect of further monetary stimulus from the Federal Reserveon the table.”To my laymans way of thinking, this suggests to me that people with money who like to grow their capital and traders will keep buying up gold as an ‘insurance’ against lower productivity/weaker currencies.
    • £2 @ 1606.31
    • STOP LOSS: 1600
  • SPOT GOLD 1608
    • In the back of my head, I was sure I was in the right trend with the gold price so decided to take a punt when the price started to climb. Somewhere I remember reading something about doubling up your gains, and I think this affected this trade. I have to say, looking back, perhaps it wasn’t a wise thing to do? Where’s my system? Am I just guessing here or what?
    • £5 @ 1608
    • STOP LOSS: 1600

Spread Bet Shorts:

None

Closed Positions

  • SPOT GOLD (opened earlier today)
    • £2 @ 1606.31 closed at 1615 = +£17.38
  • SPOT GOLD (opened earlier today)
    • £5 @ 1608 closed at 1615 = +£35.00

     

Profit for Day

+£52.38

3rd August 2012

Opened Positions

Spread Bet Longs:

  • SPOT GOLD (DFB)
    • Gold been trading within a tight range this last week and even though I know I shouldn’t trade on impulse, I’m going to give this one a punt at 1595 and hope to catch an upward trend to around 1615.
    • £3 @ 1595.74
    • STOP LOSS: 1590

Spread Bet Shorts:

None

Closed Positions

  • SPOT GOLD (DFB)
    • This was my punt that I made earlier this morning. Hit my stop for a brief moment in the afternoon before heading back to 1600. Still looks like it will head up from here – might have another look on Monday.
    • Opened long £3 per point @ 1595.74, stop loss hit at 1589.03 (actually almost a point less than my stop loss) = -£20.13

Loss for Day

-£20.13

 

 

 

2nd August 2012

Opened Positions

Spread Bet Longs:

  • BARC (Barclays)
    • Going long because libor scandal under the carpet now and latest results look good to my uneducated eye (making billions in profit and paying a dividend so can’t be bad?). Plan to hold this until some bad news hits (or Stop Loss is reached).
    • £5 @ 170.02
    • STOP LOSS: 160
      .
  • EMG (Man Group)
    • Going long because ex-dividend date is 14th August and expecting people to pile into this for record date because they’re paying 6.12p per share (about 7.6% on current price) in dividends and it looks cheap based on how much they have in the bank. First time I’ve tried this theory but expecting to stay long on this until 14th August (or my Stop Loss is reached). Thanks to PaulyPilot for his morning summaries here.
    • £10 @ 81.63
    • STOP LOSS: 76

Spread Bet Shorts:

None

Closed Positions:

  • MEC.L (Mecom Group)
    • Bought this when I saw it mentioned on another blog but missed out on earnings reports etc. (I ‘bought on the news, not the rumour’). Have faith it will continue to increase because it looks good on the balance sheet but IGIndex sent me an email telling me my other positions were in need of margin. Decided to close this one out to give the other 3 open positions some head room (see yesterday’s opens). Luckily wasn’t in this position for much.
    • Opened long at 69.17 for +£2 a point and Sold at 65.33 = -£7.68

     

Loss for Day
-£7.68

 

1st Aug 2012

Opened Positions

Spread Bet Longs:

None

Spread Bet Shorts:

None

Closed Positions

  • Spot Gold 31st July
    £5 – Bought @ 1614.53 : Sold @ 1601 = +£67.65
  • HOME Retail Group
    £1 – Bought @ 71.78 : Sold @ 77.85 = +£6.07

Profit for Day
+£73.72

 

31st July 2012

Opened Positions

Spread Bet Longs:

CHW (Chime Communications)
£10 – Bought @ 182

Spread Bet Shorts:

Spot Gold
£5 – Bought @ 1614.53

Closed Positions

BARC (Barclays)
£2 – Bought @ 162.86, sold @ 167.63 : +£9.53

Profit for Day

£9.53