If you want to see some action, here it is.
With news of Italy’s sky-high borrowing rates spooking the markets, and the FTSE taking a turn for the worse, it’s no surprise that my account suffered some stop-outs today. When a position stops out, the stock in question goes onto my Stop-Out List, and when I can re-enter at a more attractive price than my last stop-out price that’s exactly what I do. On days when I’m watching closely, like today, I am prone to going in and out of a position repeatedly (perhaps too repeatedly) while trying to catch the falling knife. This is apparent in this morning’s trading history shown below, which you should read bottom-to-top.
Notice how I bought Homeserve automatically at 263p thanks to yesterday’s opening order, stopped out at 253p (ouch!), re-bought at 248.4p, stopped out at 244p, and then finally re-bought at 230p. As you can see in the following transaction history, I lost a total of £14.40 by trying to catch this falling knife, but by the time of my re-purchase at 230p the “buy and holder” would have lost a greater £33 by having held all the way down from 263p. (Later it in the day it stopped out again at 219p and I repurchased at a lower 211.4, not shown).
Aviva is another interesting one: stopped out at 317p for a profit of £0.90 (minus the £1.58 to guaranteed my stop order, minus £0.13 in rolling charges since purchase), re-bought at 312.9p, ‘averaged down’ at 310p, stopped out (on both positions) at 307p. The price subsequently rebounded upwards, but I held out for a fall-back before re-purchasing again at 307p (not shown above).
My two ‘averaged down’ positions in Balfour Beatty — one bought at 243.7 and the other at 241.2 — both stopped out today at 237p for a combined loss of £10.90. Well, I won’t lose any more on this stock unless I first get to re-purchase at a lower price.
Home Retail Group stopped out at 86p and I was a little naughty in buying it back at a slightly higher 86.3p because it looked on the chart like it may have bottomed out. My rules are there to be bent… but not too often, and not by very much.
In came Wincanton today at 75.6p with a stop order at 63p, as well as Sportingbet at 33.6p with a stop order at 29p.
I can’t stress enough that these are not trading recommendations. I’m merely documenting what I am doing for general education and entertainment purposes only.
I would have liked to have taken a punt on Admiral, which suffered a car crash today, but it was far too expensive for my risk tolerance in this account. I may have taken advantage in another account.
Although I’m no big fan of opening orders, I set one up which will buy Cape at 315p and then stop out (well, hopefully not) at 305p.
Tony Loton is a private trader, and author of the book “Position Trading” (Second Edition) published by LOTONtech.
Tags: trading commentary
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Trading Trail #8: The INs and OUTs of Trading
Nov 9, 2011 at 4:47 pm in Trading Diary by
If you want to see some action, here it is.
With news of Italy’s sky-high borrowing rates spooking the markets, and the FTSE taking a turn for the worse, it’s no surprise that my account suffered some stop-outs today. When a position stops out, the stock in question goes onto my Stop-Out List, and when I can re-enter at a more attractive price than my last stop-out price that’s exactly what I do. On days when I’m watching closely, like today, I am prone to going in and out of a position repeatedly (perhaps too repeatedly) while trying to catch the falling knife. This is apparent in this morning’s trading history shown below, which you should read bottom-to-top.
Notice how I bought Homeserve automatically at 263p thanks to yesterday’s opening order, stopped out at 253p (ouch!), re-bought at 248.4p, stopped out at 244p, and then finally re-bought at 230p. As you can see in the following transaction history, I lost a total of £14.40 by trying to catch this falling knife, but by the time of my re-purchase at 230p the “buy and holder” would have lost a greater £33 by having held all the way down from 263p. (Later it in the day it stopped out again at 219p and I repurchased at a lower 211.4, not shown).
Aviva is another interesting one: stopped out at 317p for a profit of £0.90 (minus the £1.58 to guaranteed my stop order, minus £0.13 in rolling charges since purchase), re-bought at 312.9p, ‘averaged down’ at 310p, stopped out (on both positions) at 307p. The price subsequently rebounded upwards, but I held out for a fall-back before re-purchasing again at 307p (not shown above).
My two ‘averaged down’ positions in Balfour Beatty — one bought at 243.7 and the other at 241.2 — both stopped out today at 237p for a combined loss of £10.90. Well, I won’t lose any more on this stock unless I first get to re-purchase at a lower price.
Home Retail Group stopped out at 86p and I was a little naughty in buying it back at a slightly higher 86.3p because it looked on the chart like it may have bottomed out. My rules are there to be bent… but not too often, and not by very much.
In came Wincanton today at 75.6p with a stop order at 63p, as well as Sportingbet at 33.6p with a stop order at 29p.
I can’t stress enough that these are not trading recommendations. I’m merely documenting what I am doing for general education and entertainment purposes only.
I would have liked to have taken a punt on Admiral, which suffered a car crash today, but it was far too expensive for my risk tolerance in this account. I may have taken advantage in another account.
Although I’m no big fan of opening orders, I set one up which will buy Cape at 315p and then stop out (well, hopefully not) at 305p.
Tony Loton is a private trader, and author of the book “Position Trading” (Second Edition) published by LOTONtech.
Tags: trading commentary