Saturday, April 29, 2006

Week 4 Summary

Profit/Loss to Date (closed positions) - $925 loss

This week
Positions closed - 19; Positions currently open - 8
Winners - 7; Losers - 11; Win/loss ratio - 39%
Biggest Loss - $201; Biggest win - $700

If my weekly profit/loss were a candlestick it wouldn't look all that encouraging. Things started off with a bang and send my bottom line back into the black. But after two average days where I closed mostly losing positions it has quickly retreated to near last weeks close.

As well as the massive win on Healthscope, I finally closed out my steady profitmaker Suncorp-Metway. Looking at my statistics though, SUN ended up only improving my balance by $387. Brokerage and interest on a large position becomes significant - in this case it was $54. In fact looking over my 62 trades so far, brokerage costs pack quite a punch. Right now it stands at $1241, which would sound ridiculously exorbitant if I wasn't making money.

Still this is quite a lot considering I only started with $6000. My gross profit is actually positive at $79. A couple of days ago it was pushing $700. It's a reminder that my trading hasn't been poorer than average but that I need to think more about the right time to enter trades. Re-entering stopped out trades costs double in terms of brokerage.

I think it's time to take charge...

Friday, April 28, 2006

Freaky Friday

Day 18 - Friday
Total Account Value: $5642
Available Equity: $3211
Positions Opened: 7
Positions Closed: 8

You know those mornings where the bed feels warm and cosy, the birds are singing softly and nobody screams at you to wake up? But when you do finally pull back the sheets and stand up your head feels like it's filled with cotton wool, and there is no milk for your cereal. Just one of those days...

My cold has grown much worse and while I wish the markets would wait until Monday, I'm thankful for not having to ingest a hellish morning commute. But bad news awaits as I find out my long position on the oil price has been stopped out overnight. My opening balance looked sickly even before 10am had rolled around. And to make it worse I completely forgot about the exchange rate with the USD when setting my stop loss! Silly but not too devastating.

Worse, I also discovered that metal prices crashed - nickel, copper, zinc - so my supposedly longer term CFD in BHP looks a bit tenuous. Sure enough the All Ordinaries came tumbling down at 10am killing off BHP, TIM and ILU. Luckily though two shorts in CPU and CML were turning profitable so what could have been a disaster was averted.

Around 10 days back when this happened I shedded around $500 and remained vulnerable for the following day. The difference is greater diversification. I've realised that when trading CFDs you need to share around your available equity between 6 to 10 stocks. So even though I started off on the back foot, simply opening a few more positions that were earmarked for attention at yesterday's close would set me straight.

Healthscope was bucking the trend and refusing to fall in the morning, eventually stopping me out at a loss. The bastard started to fall again almost straight away - the stop loss just one tick too close! Never mind, I may be able to enter again next week once the indecision has evaporated. Annoyingly QBE did this to me too later in the day. Paladin Resources (PDN) was a big winner for me even though I missed out on half of the action. I had been thinking bearish on this stock for a few days now a fall in metal prices was a perfect reason to enter.

This situation is very difficult though. Many stocks gap significantly down and there is a question mark as to how much more they can fall in a day? I preferred to wait for more solid signals of overall bearishness or potential for recovery. Setting a large number of price alerts was great for making these decisions throughout the day without spending too much time constantly monitoring charts.

Rinker (RIN) is one that seems set for extended weakness as it has risen too high too quickly. Fundamental analysts have been recommending to take profits recently and the chart patterns appear to back them up. I watched as latecomers eager for some Rinker action at a cheaper price tried to force it back up in vain before relinquishing to selling pressure. Dark cloud cover was once again telling so I entered.

One positive to come out of the falls is the opportunity to go long on some resources stocks that corrected slightly. It is highly unlikely that positive sentiment has disappeared for these bucking bulls. I await Monday with anticipation.

Thursday, April 27, 2006

It cost $40 to fill up my little hatchback!

Day 17 - Thursday
Total Account Value: $5910
Available Equity: $3025
Positions Opened: 6
Positions Closed: 2

I have now settled into my trading routine and potentially silly trades that would have been opened last week are now being ignored. Lend Lease Corp (LLC) is one stock that comes to mind. I had chosen this on Day 1 as one of ten on my watchlist, subsequently entering two high-risk trades on only moderate signals. Recently it has been hovering around resistance/support, constantly changing its mind and while showing potential for pure daytrading, to me its rather useless. Unlike before I will not trade this stock until it starts being more decisive.

One that has been decisive is MBL, which appears to have broken away after a teacup formation. With an $82 gain today it hasn't been too amazing but steadiness is fine with me. Those that rise the quickest often fall the hardest. I witnessed this today with ASX, which vindicated my decision to take profits yesterday as it plummeted to just near Wednesday's opening price. I would have kissed goodbye all my profits. Behaviour like this reiterates how valuable volume indicators are. Together with price action, it is the most pure form of technical analysis. It just sucks that my main trading/charting platform doesn't record it!

BHP has chosen today to stagnate after impressive gains over the past few months, and while my stop loss order wasn't filled it dragged down my daily result. ORG was stopped out and I opened shorts in CPU, QBE and CML as many signs pointed toward a loss of trader sentiment. QBE in particular gapped open yesterday with a spike in volume but did little else. This reeks of an exhaustion gap, which will quickly be filled. Today it took the first steps.

I also tried something a little different and went long on the Oil commodity price at $71.99. Sadly for the consumer I think this going to test US$100 per barrel sooner rather than later and there is no shortage of analysts who support this view. It corrected slightly in the last few days giving me an entry opportunity. If prices at the pump are going to surge I might as well extract some benefit out of it!

Today was one of those days where my balance actually fell midway through the day and rallied into the close while the All Ordinaries bobbed up and down. This fills me with great promise for tomorrow.

Wednesday, April 26, 2006

Winter is here

Day 16 - Wednesday
Total Account Value: $5989
Available Equity: $4191
Positions Opened: 3
Positions Closed: 5

I went to bed last night with a tickle in my throat and a sniffly nose. So you can imagine how bad I feel today. My head is clouded and the last thing I want to be doing is sit in front of my computer. But while my concentration was on and off, nothing went amiss with my trading account.

In fact, after 16 hectic days I am just a tick under my original account balance, after it hovered just below $6100 most of the day. The market opened well up but I didn't notice many obvious opportunities to enter a new trade. I want to be careful not to overtrade by ensuring that my available equity matches or exceeds the amount used on margin.

It didn't take long until one of my shorts, BSL, hit its stop loss at $7.77 registering my first loss for the week. By days end my two other short positions in AXA and CSM (pyrammided) were no more. With hindsight, upon seeing a green covered watchlist in the morning, taking profits on these would have been wise.

And while AXA showed some trend breaking movement it began move back up toward yesterday's close. I manually exited the trade with a tiny profit. Buyers started to get on board CSM and reminded me that I must be frugal when adding to positions. What would have been a tiny loss turned into a larger than average one ($167).

Suncorp-Metway (SUN) has continued to steadily rise since I went long last Tuesday and the profit is now starting to look valuable. I have kept it open overnight as volume indicators demonstrated strong support. MBL is also doing nicely.

Cabcharge (CAB) made impressive gains yesterday after bottoming out, today gapping up and rising further. However these movements were made on unusually low volume, which tells me they're mostly based on hot air. The stock isn't as liquid as others in my portfolio so I locked away my profits rather than try to gamble on good fortune. Luckily for me it began to struggle toward the close. However, my profit was not much more than my maximum allowed loss of $120. I must remember to look at price targets to determine whether the potential reward outweighs the risk involved. It also seems my maximum loss is too high so I have lowered it to $110. Not much I know, but I'll trial this over the next few days and see whether it helps.

In other trades, I went long on Origin Energy (ORG) and Timebercorp (TIM) as they showed trend reversal signals and opened a small long position on BHP. As an experiment, this will be a longer term trade that I will try to pyramid and take partial profits at continuation/reversal points. My stop losses will be looser. BHP has been the best performing blue chip on the market and it would be silly to miss the opportunity.

Now to get some rest...

Monday, April 24, 2006

A new beginning

Day 15 - Monday
Total Account Value: $5921
Available Equity: $2886
Positions Opened: 6
Positions Closed: 3

Apart from a minor frustrating episode this morning, the past four days could not have gone smoother. My girlfriend and I went for a relaxing weekend retreat that included a deep tissue massage and a variety of relaxation pools and spa baths. The massage therapist said there were knots all over my upper back. It could have been caused by my four-days-a-week gym regimen but I suspect sitting at a computer all day had something to do with it.

Oh, and I somehow managed to generate more than $1100 over the last two trading days. That's a 23% gain on my account balance. The most pleasing aspect of today's trading was that unlike Friday when I was still staring at a $1000+ loss, much of my winnings have now been safely banked. $842 today all up.

The one bad aspect of the weekend I spoke of happened this morning when my craving for a $5 hot breakfast overwhelmed me. On a detour before heading home I parked on a city street before realising I had only 15c in change for the meter. Inspectors are always crawling around. In the desperate search for change in the glovebox and on the car floor I got frustrated a left the car, forgetting to take my keys out of the ignition. Now no change AND no keys! I ran to a corner bar to ask for change but they were closed - my yanking on the locked door probably made me sound like a desperate drunkard. Not many other stores were around. All I could find was a florist but they were too tightarse to trade me some of their precious change. Luckily a friendly bookseller helped me out.

To cut a long story short, I bought my long awaited breakfast (eggs, bacon, toast) which turned out to be runny and unappetizing. Roadside assistance took one hour to arrive in the Melbourne CBD after I made the call, despite the operator assuring me of a 30 minute ETA. Not to mention the 10 minutes on hold. Sitting idle in the cold, seeing off a couple of parking inspector twits and missing the first hour of trading gave me the shits.

But my account balance had only increased since yesterday! My big winner Healthscope (HSP) was starting to weaken after the slowcoaches forced the price to gap open but do little else. When I closed out, final profit was a handsome $708.

I then set about consolidating on CSM by adding to the short position when the price started to gather downward momentum and the sellers were in numbers. I'm liking this stock so far because of all the others I've been monitoring (with the exception of MAP and MIG), it appears very predictable and retains its direction throughout the day.

I took profits on COA as it looks prone to sharp swings and is a little too thinly traded for my liking. It went on to fall further which I suspected, but that's the way trading goes and I'm not too fussed. A similar situation happened with CPU which I shorted and closed in the same session. I had a large position size and was just a little tenative about what it would do. This was a case of thinking too much. I opened the trade for a reason - it definitely looks like indecision will turn into bearishness - and I should have left it alone without constantly looking at the depth screen.

Macquarie Bank has completed the handle in a teacup pattern and closed strongly on the back of decent volume. I think it will definitely make some nice gains in the next few days as the bears failed to force it as low as it should have gone in the last week. Appears to be much positive sentiment about this stock.

I'm overall very happy with my situation because I'm closing positions at the right time, managing my stop losses better and waiting for reliable signals. Also, I'm thinking about the near future and building a portfolio that will not either succeed or fall over within one day. This has happened in the past two weeks and left me vulnerable.

Sunday, April 23, 2006

Week 3 Summary

Profit/Loss to Date (closed positions) - $1280 loss

This week
Positions closed - 12; Positions currently open - 5
Winners - 4; Losers - 8; Win/loss ratio - 33%
Biggest Loss - $248; Biggest win - $311

I cannot find the words to describe my fortunes this week. Up and down like a yo-yo. Great frustration followed by optimism. But it really shook me up and forced me to weed out the weaknesses in my "game". My biggest loss and biggest gain statistics basically say it all. And although four wins is greater than 0 (last week), my loss to date is a stark warning to never count your chickens before they hatch.

I was on the verge of quitting as I'm not a complete idiot who likes throwing away his money. Just taking out the easy option is not something I'll be happy to live with. It is now one week from Good Friday. After near death, could my trading account be ressurrected and go on to do great things?

Friday, April 21, 2006

Happy Anniversary!

Day 14 - Friday
Total Account Value: $5359
Available Equity: $3322
Positions Opened: 3
Positions Closed: 3

My girlfriend and I celebrated our one year anniversay this morning. But not long after waking she had to go off to work and I drove home to see if I could resurrect this trading account. It would be a very pleasing anniversary gift as I grew pretty annoyed yesterday.

It seems there is a money god after all. Most of my open trades "matured" as the day progressed, and at one point I was sitting on a tasty $700 one-day gain. Of course there are no fairytales, but more than $500 is as perfect as it can get in my circumstances.

HSP has performed sensationally and I'm glad I had the foresight to go long when I did. It began so strongly that I pyramided my position by buying another 1666 CFDs and watched as the gains multiplied. If I were to exit now the win would be worth nearly $600. However, the good news is sobered by the fact that similar bursts are a dime a dozen.

This was the first time I survived and profited from a major opening downtrend in the All Ordinaries. This gives me hope - it means I'm getting better at pre-empting individual stock movements. As well as HSP, my decision to go long on CEY shortly before yesterday's close was fruitful. It stormed upwards, eclipsing the three previous day's losses. When a stock shows this kind of pattern there is a danger it may lose momentum as quickly as it appeared, especially in a flat market. Due to opening unpredictability, I'm being more frugal and will take every opportunity to close out positions sooner rather than later. CEY left me $310 up.

AXA and COA continued their slow descent and a new short position in CSM (Consolidated Minerals) began promisingly. I have been watching this stock for quite a while now and it exhibits slow, involatile movement. There is money to be made here if I go with the trend.

Last week I tended to wait on unperforming positions, hoping for good fortune the next day. This time I am smarter. I closed FXJ with a minor profit intact as it seemed to struggle after healthy gains yesterday. Anything can happen after the weekend though my feeling on this stock is still bullish.

Ahh it was a very happy day, but will it last? At least I feel better about splashing out on a health spa massage for my girlfriend and I.

Thursday, April 20, 2006

On the ropes

Day 13 - Thursday
Total Account Value: $4808
Available Equity: $2582
Positions Opened: 6
Positions Closed: 4

I'm starting to feel a little queasy whenever 10am rolls around. Opening action continues to devastate me as unpredictable gaps seem to be showing up on every chart. This morning it hit me like a ton of bricks. In my greatest trading tragedy so far, Coca Cola Amatil (CCL) gapped up higher than last Thursday's opening price despite it seeming that its downtrend would continue. Wednesday exhibited signs of profit taking, as the priced gapped lower and rose a small amount on high volume, unable to break the previous day's low. I went short thinking the trend would resume but was wrong. It was much too foolish a move for my risk profile and I paid a high price. I'm a Pepsi man anyway...

But it wasn't just CCL that made me sad. Despite a brief sunny interlude around lunchtime when my balance traced the positive path of the All Ordinaries it was all bad news. WOW burst through my stop loss and taught me why you shouldn't ignore "dark cloud cover" (red candlestick that opens higher and overshadows a black candlestick). It's so much easier to think positively before the falls have happened. Trading is funny in that way - when you look at the chart a few days later it all looks a bit too simple.

PMN was looking a little shaky so I cut my losses, leaving just SUN teetering on the brink of its stop loss. My balance was terrible now at around $4700. The were only two options remaining - give up or carefully rebuild. Since I'm crazy, I chose the latter and bought stock after stock as the signals appeared.

I started off quite well. Healthscope (HSP) had been doing absolutely nothing for the last month and very little since January when it shedded 29% in two days. Reminds me that I'm not the stupidest trader out there. The sellers had to be selling to someone on those days and I'm willing to bet not all of them were shorting profit takers. I read an analyst report on it from a popular newspaper this morning saying the price was not matching the performance of the company. It gapped open slightly this morning following a modest gain on Wednesday so I went long and held on as it jumped 3.5%.

Very wary of gappy openings in the Australian market, I wanted to even up my portfolio with both long and short trades. AXA showed a MACD-price divergence so I shorted once it fell below the close of its decently sized red previous day. Coates Hire (COA) and Excel Coal (EXC) were behaving similarly, with the latter meeting resistance with seemingly strong seller support. Now 5 stocks in the bag. Unfortunately it turned full circle and temporarily broke resistance before the day was done.

On the other side of the coin, John Fairfax Holdings (FXJ) and Centennial Coal (CEY) appeared to have bottomed out. Both looking especially strong with an engulfing and "three stars in the south" (triple weakening bottom) candlestick patterns respectively, confirmed with volume signals. So although my balance was down, I feel I have set myself up for a comeback. If this doesn't work, what will?

Also, I checked out guaranteed stop loss orders. The offering of my CFD provider is quite pathetic. The price is different depending on the price of the stock, which makes little sense. Placing one on a $5 (or less) stock will cost me $2. This price goes up in $5 intervals. Too bad if I want a stop loss for Macqaurie Bank (currently trading at $69). Also the guaranteed stop loss must be placed at least 5% from the current price. Ridiculous! A 5% loss is huge! Especially with an account value as low as mine.

But wait there's more! You must call the trading desk to set one, and who can really be bothered doing that? With the extent they promoted guaranteed stop losses as part of the package it really is a big sham.

Wednesday, April 19, 2006

Not so fast...

Day 12 - Wednesday
Total Account Value: $5168
Available Equity: $3430
Positions Opened: 3
Positions Closed: 5

CFD trading must surely be bad for one's blood pressure. Following satisfying gains yesterday, it all disappeared despite closing off two winners, a first since the 7th of April. The problem was due to an opening surge that leapfrogged stop losses on two of my shorts, MBL and CPU. Most of my losses can be explained by this phenomena - frustratingly the stop loss for Macquarie Bank was set at a price that would have given me a smallish profit. The logical solution is to use guaranteed stop losses, in which the price I specify will be the price my position is closed without fail. But I set them so much that the extra cost might get out of hand. Definitely something to look into though.

It looks obvious on the chart now that MBL was unable to sustain its bearishness despite oversold signals and spinning tops/hammers galore on the chart. Even fundamental analysts are saying the stock is overpriced and recommending a sell. Perhaps the falls will continue but I'll have to wait on that one.

I shorted CPU late yesterday as it had made monumental gains of around 4%, despite the weekly chart clearly pointing toward the beginning of a downtrend after reaching new highs. As the price barely moved I watched the depth screen load up with sellers as the bears seem to wrest control back from greedy bulls. My stop loss was placed two ticks above the daily high. I'm sure some pros were on the scene and shorted with very high volume as I saw evidence of their limit orders appear on the buyer side (round figures belonging to 1 buyer).

But today the price gapped open and I lost. This was probably due to the pros who bought back in after a quick kill and the amateur latecomers who saw a big green/white candlestick and placed buy orders overnight. I had been doing OK with the strategy and pre-emptiveness until the close. Another very important lesson learnt. How could I be so stupid?

I closed Centro Properties (CNP) after it gapped up hugely and locked in a quick profit. As I thought, it crashed back down as the gap was unsustainable.

Later on I erred with using a too-tight stop loss on QBE insurance as the MACD indicated a major weakness - a divergence where the price makes higher highs while the indicator makes lower highs. I jumped in just a bit too early as last minute buying pushed it up to new highs before settling back down into a long-legged spinning top. I will only re-enter a short if it begins to fall tomorrow. I hate market indecision...

Tuesday, April 18, 2006

Back on the rails

Day 11 - Tuesday
Total Account Value: $5502
Available Equity: $3592
Positions Opened: 4
Positions Closed: 0

It gladdens me to say that despite my nagging fears, I am not a raving idiot after all. Last week was a testing one - making bad decisions and reading countless opinions on the inevitable failure of short term traders made me feel like a loser. After stupidly admitting to my girlfriend's excitable mother that I owned a blog, I sheepishly refused to send her the link because I didn't want news of my losses to spread.

I spent the weekend relaxing and recharging, while also thinking deeply about market psychology and how a typical stock fares over the course of a trading day. While going with the crowd makes money, you need to pre-empt them to do it consistently. False signals were savaging me. A major aspect I was paying little attention to was market depth. Watching the buyers or sellers mount up is a great forewarning to what the price candlestick will do.

Opening prices and first hour phenomena are particularly interesting. It seems the floor is flooded with amateur traders who have placed their orders overnight. There are also many end-of-day or "weekly" (2 to 5 days) traders like me who are waiting to enter trades based on confirmation signals. The pros are waiting to confuse the masses and profit from their panic and fear, trading in the opposite direction with considerable volume. A slight direction change will cause nervous bulls to sell (if trend is to go long). End of day traders will wait, and if the panic increases, the tight stop losses of more resilient but careless bulls will be hit, sending prices lower. Once the pros have made a killing, they will exit and the trend will resume. Some stocks behave this way more than others, but the threat is minimised when the order book is strong.

Today I waited for Woolworths (WOW) to show strength before I went long, and was rewarded with a decent day's profit. I had my eye on the price, because the weekly chart showed a weakening downtrend (with decreasing volume), and the last day of trading finished strongly. This morning it gapped open above the 50 day SMA, allowing me to enter with confidence.

Suncorp-Metway (SUN) is a blue-chip stock that has been tracking sideways within an extremely tight range for about 50 days. It's difficult not to pay attention when volume increases steadily, as it means market sentiment is improving and it's only a matter of time before a breakout occurs. I picked the direction (upwards) as the MACD indicator had been rising consistently. Since the 20-day SMA had just started to turn up, a gap open signalled the beginning of a burst. I bought 700 Share CFDs, worked a tight stop loss and now I am up $175 in a day.

Last week's surviving shorts continued to fall and a tasty Easter interest payout made them even better. I am considering closing MIG tomorrow as its 7-day correction could soon come to an end. After losses last week I'd hate to press my luck. Come to think of it, I'm a little nervous about what the market will do this week. After some choppiness, the index chart points toward another week of stagnation before resuming bullishness. If the overseas indices crash again overnight, my longs are doomed. Therefore I will be extra conservative with my stop loss trailing.

Monday, April 17, 2006

Week 2 Summary

Profit/Loss to Date (closed positions) - $916 loss

This week
Positions closed - 10; Positions currently open - 2
Winners - 0; Losers - 9; Win/loss ratio - 0%
Biggest Loss - $175; Biggest win - $0

Tragic week. I failed to register a win and my account balance began to bleed. It was a harsh lesson but one I am glad to have experienced. And while I am not over the troubles just yet, I think I was able to prevent more serious chaos with a few of my decisions. It did look much worse at times. While this is not an excuse, I have been unfortunate to be trading through a tumultuous week in the Australian market. This was not something I expected when I started and it caught me like a fish out of water.

I have learnt to not restrict my trades to a handful of stocks because it has been leading me to open trades on questionable signals. On the long weekend I have cycled through a larger number of charts and seen the greater possibilities that are available.

Lastly I have finally gotten off my arse and analysed weekly charts. I am happy to see that the trends shown are very clear cut - using these will markedly improve my decision making. Looking back on my past trades, on roughly half of the losses, I had traded against the prevailing weekly trend. On all four wins, I had traded with the prevailing trend. I can't stop kicking myself...

Thursday, April 13, 2006

Saved by Easter

Day 10 - Thursday
Total Account Value: $5197
Available Equity: $4622
Positions Opened: 0
Positions Closed: 3

This morning I woke up at my girlfriend's house and was unable to check on my positions until 12:30pm. I didn't tell her, but after such a chaotic Wednesday all I could think about was what was in store for me. The news was mixed. CML went ex dividend today which netted me $229 straight off the bat. I was relieved have my first win of the week guaranteed but the overall result ended up being downright pathetic. Due to the volatility of the past few days, I really hadn't made much capital gain at all. The stop loss, which I had adjusted to the dividend amount less 5c at last night's close was triggered almost straight away. The stock never recovered, and I'm not too sure it will in the near future. My profit was a laughable $2.38, but I guess you have to start somewhere! It would have been wiser to sell at the close but I grew obsessed with simply snaring the dividend.

Despite my short on PMN showing a small profit yesterday, it began to show evidence of making a comeback. When I turned on my computer and noticed, I had no option but to make the decision to sell at the price I entered, making a loss on brokerage. Too many times now I have been tentative about cutting my losses or taking profits when the tide is about to turn. I escaped just in time too, because PMN added 2c to $5.43 shortly after I made the move.

JBM burned me by taking a tumbling despite finishing last night with momentum. However, MBL and MIG continued to make good progress downwards, and I finished the day holding only these two positions.

The market closed at 2pm for Easter and it was almost a relief to have my horror week end prematurely. Looking at the All Ordinaries and ASX200 charts, you can see choppy sideways movement. I reckon only the best daytraders who trade on intraday swings could make money in an environment like this. There is too much unpredictability. In such situations it is probably best to open positions more frugally and resist going overboard. My research efforts have gone into high gear today I'm looking forward to happier times next week.

My predetermined maximum loss is $2000 and as long as I'm within that I'll continue to trade with confidence.

Happy Easter everyone!


Day 9 - Wednesday
Total Account Value: $5281
Available Equity: $3425
Positions Opened: 3
Positions Closed: 4

Carnage. That's what happens when the All Ordinaries opens roughly 40 points down on the back of a similarly sized rise the previous day. Three days of strong direction changes is bad news for a short term trader with a strategy like mine. Longs on Sonic Healthcare (SHL) and MIG were blown out of the water, with the losses on SHL particularly painful due to the slightly larger position size.

Talk of rising interest rates and volatility of the major global indices is playing havoc with my trading efforts. I wish all of this happened a few months ago. It really is difficult to predict what will happen the next day - once I turn on my PC in the morning and notice what happened around the world I've already lost. The longs are in place and gapping is a certainty.

I need to be proactive, so I immediately turn full circle and short MIG because it has now definitely fallen below short-term support and the 20-day SMA. On a day like this, go with the trend. Promina Group, which I complained about yesterday because it seemed sluggish in continuing its bearishness, began to respond and I was thanking my lucky stars that I was careful enough to retain both longs and shorts in my portfolio.

But the damage was already done with the aforementioned losses, which combined with the collapse of CML and Jubilee Mines (JBM) left me roughly $500 in arrears by lunchtime. Luckily though, these two seemed strong as they slowly made ground throughout the day. All signs pointed to JBM continuing its charge so I was keen to retain it.

But then, a huge embarrassing mistake sunk my spirits. I felt a little vulnerable with no solid opportunities to gain from the negativity. I scanned chart after chart finding nothing really suitable to short. That is until I checked CSR, which I have been monitoring over the past few days because it gapped down underneath support.

I have a soft spot for this stock. They are upping ethanol production and in late November 2005 I made the call it would start to make solid ground. It did to the tune of nearly 50% but sadly I missed the boat completely. Anyway, the past two days saw strong bearishness and the price was now underneath the 50-day SMA. I checked the price depth and the sellers seemed out in force, so I shorted with a tight stop loss.

Barely 10 minutes later, as if to mock me and shatter my confidence after taking a morning hit, the price rose cent by cent. It broke my stop loss, and that was a quick $120 down the drain. Without this blunder my closing balance would not have looked so bad considering the circumstances. It was a harsh lesson to always keep emotions out of the trading room. Looking back today, overly high volumes after the gap down was a hint that this was an exhaustion gap, and the downward force would not last too long.

There's always just a tiny piece of the puzzle that is missing. But I'm getting better at noticing these things every day...

Tuesday, April 11, 2006

The rot continues

Day 8 - Tuesday
Total Account Value: $5615
Available Equity: $3413
Positions Opened: 3
Positions Closed: 0

The title of this post may be a tad negative but I'm honestly not feeling that way tonight. I've just woken up to the fact that trading is a very difficult thing to do. I'm sure many beginners start off the way I have or worse, and throw in the towel before proving to themselves they can master the system. It's the market's way of weeding out the pretenders.

I'm going to persist. Because I know from experience that certain things can only be learnt by doing. Initial failure is common and without it I would probably leave myself open to a future disaster. As long as I continue to make "smart" losses rather than inane mistakes, the outlook will be rosy.

I had been keeping on eye on Macquarie Infrastructure Group (MIG) and this morning it responded exactly as planned by gapping slightly open. A star had formed that was resting on a significant line of support. I went long 1666 share CFDs at $3.85 and set my stop loss just below the nearby 20-day Simple Moving Average (SMA). It did well throughout the day, gaining predictably with very high volume and liquidity (as always with both MAP and MIG) until slightly selling off toward the close leaving me down $66. It unexpectedly crossed over the support line despite looking strong and now all I can do is hope it was a short term sell-off that will soon be reversed.

PMN is another example of the market playing games with my head. Price action shows it has been looking weak for quite some time now:
  • After an all time high on the 13th of March the general trend has made a clear bearish reversal.
  • Twelve days later it fell strongly below the 20-day SMA.
  • Last week it tested and rejected the 50-day SMA four days in a row.
  • Following this it made an upwards rally which ran out of steam after just one day.
  • On Friday it once again tested and rejected the 50-day SMA.
  • Yesterday it finally fell below this line for the first time since January 3rd, forming a small red candle
  • Today I was poised to go short as it opened lower and fell steadily but slowly below a short term low.
However, once the order was made it began to rally in the last half hour and was a whisker away from hitting my stop loss. Reading chart signals in depth and seeing the market react differently can be frustrating at times. Hopefully PMN does as its told and continues its slow rot tomorrow.

CML continued to rise, being a bright spot for the day (not to mention the last week) and it looks like gains are still to be made as we count down to Thursday's ex dividend date. MBL once again had an indecisive day and surely now the bulls have lost faith in its ability to make new highs.

While my open positions have been a mixed bunch, I have thankfully been correct with my decisions NOT to trade some stocks. For example, my call yesterday to ignore CPU because of momentum loss (despite it being one of few to gain on a bearish day) paid off as it turned out to be one of few to fall today.

Also I noticed a pattern forming with TAH after lunch. I have had difficulty with this stock recently but I noticed that the opening price gapped slightly above yesterday's close but below yesterday's high. It climbed to reach a new 60-day high before falling back steadily, ending up well into the body of yesterday's candlestick.

Famous short-term trader Jeff Cooper calls this the "Gilligan's Island", because anyone who remains long will be shipwrecked. Noticing this so easily excited me, but I decided to be conservative and wait because I have been stung twice by TAH's trickery. Sure enough, it did a back flip and once again pushed up to new highs....there would be no re-runs of Gilligan for me today.

I have noticed that Tabcorp yesterday released their half-yearly statement, which showed very positive results. Their dividend reinvestment plan also went into effect and i'm sure this would have boosted the price somewhat. With TAH being one of few companies these days to offer shareholder benefits, there are probably a few "mum and dad" long-termers out there who participated. I'll need to wait for the dust to settle on this one.

Monday, April 10, 2006

The day of ill omen

Day 7 - Monday
Total Account Value: $5652
Available Equity: $4386
Positions Opened: 1
Positions Closed: 2

The week kicked off to a very unnerving start. I'm not superstitious, nor do I believe that bad omens can affect trading or life in general, but today I was a little on edge. On Sunday I had placed my first ever football bet for my sister and I as a birthday gift (yeah I know, bad gift, but it was her request). It was a relatively safe multibet for three teams to win (home teams and favourites) but the odds were quite nice at $3.30. The first two teams had already won and all that remained was for the Crows to get up over the Eagles. Despite being healthy favourites, they fell in the last moments of the game to lose by two points. It reminded me why gambling is a bad idea!

This morning the paper delivery man delivered the wrong paper - the cheap tabloid! I love reading the Monday morning sport and it ruined my routine. After this I logged on the my PC and began to open my CFD trading software. Suddenly, my virus checker was reporting a serious virus that was crippling my entire system, preventing me from even opening the Control Panel. I don't remember downloading anything suspicious!

Later in the day, the most bizarre occurence of all...

A man called my house looking for Andrew (me). My sister handed me the phone and the man said, "Hi Andrew, you just sold me a wooden bookshelf on EBay." I thought WTF??! "Are you from EBay?" He replied, "no, you auctioned a bookshelf and I'm the winning bidder. I want to arrange postage." I stammered like a simpleton that I don't use EBay, so he then told me the auctioneer was of the name "Liz xxxxx" and had given my home phone number as a contact address with the instructions to "speak to Andrew". The dude wasn't too happy.

So while all this crazy stuff happened to me today, the market also dropped heavily on the back of negative movements in the Dow Jones and Nasdaq indexes. The frustrating thing was that while my entire watchlist was red (with the exception of the bullish CPU), my two short positions in MBL and TAH had barely fallen at all, despite overbought signals. Barely 30 minutes had passed before I lost my long position on the ultra-volatile Santos Oil (STO) in which sadly, my stop loss failed to trigger. I had to close it out myself but luckily the damage wasn't too bad.

As the day moved on, CML began to make a comeback and had added 24c at the close to remain above old highs. This was very encouraging considering how much it gapped down, and I am confident in holding this position for a little while longer. MBL continued to show indecisiveness, but by the end of the day a clear "tristar bearish" pattern had formed. In addition to this, volume spiked strongly on Friday despite the weakening uptrend. Today volume was considerably low in confirmation of a loss of confidence. If technical analysis means anything, the stock should fall tomorrow.

I considered going long on Computershare on the back of its gains on a bearish day, but it failed to overcome Friday's high. As it started to lose momentum in the last half hour, I put my trigger finger back in its holster. I'm making a conscious effort this week not to be gung-ho with my trades. I spent a lot of time applying 50 day SMA's to my charts, reading up on complex patterns and identifying potential entry signals for Tuesday.

I finished down again but am definitely not out.

Friday, April 07, 2006

Week 1 Summary

Profit/Loss to Date (closed positions) - $8 profit

This week
Positions closed - 13; Positions currently open - 5

Winners - 5; Losers - 8; Win/loss ratio - 38%
Biggest Loss - $178; Biggest win - $208

Overall, not a perfect fairytale start but I'm very glad to have learnt that trading is not a walk in the park. Reminds me of when game show contestants say, "It's a lot easier on TV." There is a completely different dynamic when your money is involved and you need to start worrying about stop losses and exit points. However my win loss ratio isn't overly concerning at this stage - I've realised that I mostly need to start making my wins more substantial. I have been guilty of closing trades off too soon or entering longs toward the latter stage of their rise. And while I can't allow myself to trade large with such a small opening balance, I will definitely be more selective.

I've also learnt more about the stocks I'm trading on a day to day basis, understanding when and when not to trade them. Volatile, directionless stocks will be weeded out as I see fit and replaced with strongly bullish stocks. Jubilee Mines (JBM) was not on my watchlist this week but made spectacular gains with little weakness - stocks like these will definitely help my portfolio.

$8 total profit sounds stupid...but at the beginning of the week I told myself that any win would be celebrated! Now let's see what happens next...

I see red

Day 6 - Friday
Total Account Value: $5765
Available Equity: $4278
Positions Opened: 2
Positions Closed: 2

The proceedings of yesterday had forced me into damage control, leaving me in a vulnerable situation. While five positions remained open at the close there was little guarantee that these would reap rewards immediately. Of the newly opened positions, I had aimed for a two to three day time frame and the trade sizes were relatively small. The plan for today was to step back a bit and wait for clear, obvious, and safe opportunities to arise.

As the market opened I saw a sea of red. The ASX200 was down and most of my watchlist was feeling the negative effects. Surprisingly, there was considerably less initial action this morning and I could feel it was going to be one of those days. A tentative market was not what I needed to make my recovery.

Still, a few of my current stocks shone above the pack, making my account balance look quite promising. CML has clearly broken above long-term resistance now, making me glad that I backed myself to try again after two straight losses. It has been suggested that this is due to the approaching ex dividend date, which makes quite a lot of sense. This is definitely something I should start paying attention to from now on.

CML's bucking of the trend by heading north on a bearish day fills me with confidence. Stocks that perform in this way are being supported by the masses and show good underlying strength. Despite the price slightly tailing away towards the close I was keen to keep it in my pocket.

PMN disappointed by descending below my adjusted stop loss level and ending a week long trade 1 cent below the purchase price. It quickly rose again and may yet continue to do so but I haven't been impressed with the stocks inability to make consistent gains when the signs are good. It's times like these when you wish you could go back in time and sell when the profit was looking sizeable.

The week's cold weather snap has frozen my extremities as my dad insists on keeping the central heating below comfortable room temperature. I think this has also numbed my brain as I have been spending more time away from the computer. It's OK though, because I admit I can be occasionally susceptible to "white line fever" and overplay certain situations. MBL formed a hanging man yesterday above its upper Bollinger Band. But I was patient enough today to wait for a reliable sell signal to enter my first short position since Wednesday. I have yet to gain from this but a second red hanging man has developed and the stock is now well and truly overbought, which means statistically MBL will surely bear fruit for me next week.

As the week came to an end and the ASX200 recovered to its opening price, my account balance dwindled below $5800 in a last minute plunge. For some reason this phenomenon has been occuring quite regularly so far, but I feel that trying to counter this may be overanalysing. Whatever the case my be, I am now poised to strike.

Thursday, April 06, 2006

The market takes its revenge

Day 5 - Thursday
Total Account Value: $5924
Available Equity: $4805
Positions Opened: 5
Positions Closed: 8

The mistakes of Wednesday came back to haunt me this morning. I was pleased with my account balance but something seemed a little wrong. I had made a few silly mistakes that should have had a greater impact on my bottom line.

This morning my positions in ASX and STO delivered their final blow. Stupidly, upon noticing the market shifts I refused to close my positions, holding on to some faint hope that I might be presented with a golden exit opportunity. There are no fairytales in trading. Both gapped open above my stop loss levels, leaving me with greater losses than my pre-determined maximum limit.

The double blow was accentuated when CML suddenly decided to break towards its 12 month high yet again, blowing my profit out of the water. This despite all signals on the chart, stock depth screen and technical indicators. I should have been patient with my original call on Monday to go long. But "should haves" and "could haves" is for suckers looking for excuses. There are no excuses, just circumstances.

The disastrous opening half hour reminded me that going short in a bull market is risky business. If anything, shorts should be held only for the very short-term and only after confirmation signals are seen. I'm definitely jumping in too soon.

The second mistake was not to immediately reverse my decision after being stopped out and go long. Taking the losses made me a little gunshy and as so much was was happening, the last thing on my mind was to get back on the saddle. ASX ended up surging around 6% for the day. Looking at how the chart formed and the recent bullishness of the All Ordinaries, the result was not a complete surprise.

Not too long afterwards the day got worse. NAB and ANN (Ansell) had been meandering around unpredictably for the last week or so. Because of this, I haven't been paying a whole lot of attention to them. Trading in them therefore was a big mistake. NAB had formed a loose "teacup" pattern, typified by a double-tested resistance line over a length of time. It was starting to look strong and broke over resistance so I bought at $37.88. Not too much later it turned full circle and hit my rather loose stop loss.

ANN's positive divergence into new territory abruptly ended as buyers and sellers seemed to go "schizo". As I watched the candlestick bob up and down like a pogo stick, my stop loss was hit, making it 5 losing trades in the day! ANN has been acting very bizarrely lately, so I have no option but to remove it from my watchlist.

The remainder of the day was spent closing off some winning positions. Partially because they were starting to look out of steam and partially because I grew a touch nervous. CPU ended well for me - up $209 after brokerage and interest.

So in the end, most of yesterday's gains were eroded today. That's just the way trading goes, and its something I'm quite comfortable with. I'm actually glad to have experienced such chaos and negativity in my first week, as it was a valuable lesson.

Patience, composure, conservatism and a lack of hesitancy are critically important trader attributes.

PS: At 3:45pm today I had a little deja vu. My just-turned-18 year-old cousin entered my room unexpectedly and started blabbing about teenager stuff. "Now I can finally buy alcohol...last time we got Johnny to buy us chick drinks....he is such a fag..." The bizarre contrast with yesterday is just too funny...

Tuesday, April 04, 2006

Trading + Family = Bad

Day 4 - Wednesday
Total Account Value: $6343
Available Equity: $3174
Positions Opened: 2
Positions Closed: 1

I'm certain that most CFD/options/derivatives traders don't have to deal with their parents while a large amount of their money bounces around the sharemarkets. But this one does...

A victim of the hoohaa going on at Telstra, my dad was retrenched and now stays at home doing long-planned renovations. Unfortunately this is the house that my office/desk resides in where I both trade on the sharemarket and do preliminary work for a new startup business.

My dad has a hard time accepting the boundaries between home and office, often interrupting me at critical times to ask for help with the renovations or to do household chores. Now sometimes this is fair enough, but today he succeeded in pissing me right off.

At short notice he told me to go to my grandma's investment property to wait for the gas man, who was coming to repair the heater. With no computer all I can do is read for one hour until the guy finally arrives. He then asks me difficult questions about the heating system which I have no idea about as I don't live in that house. A total of two hours spent twiddling my thumbs and hoping that the usual inactivity of the markets around lunchtime would continue. Made me very angry indeed!

Luckily my overall position hadn't suffered too badly when I returned - in the opening two hours it had already risen roughly $500 and I was preparing for a "bubble burst". It turned out I was too late for one major reversal. Yesterday I had gone short on the ASX as strong selling pressure was obvious on the chart. This had continued this morning and I was sitting on a decent profit. However, after that interruption the bearishness had dwindled and a hammer (open near close and long downward stick) had formed as the stock prepared for a recovery. Seeing the strong price movement on the chart earlier in the day had fooled me into thinking it would remain that way the whole day. If it had been 4pm, evidence would have pointed toward a complete lack of buying power in the stock. But I didn't have good foresight and now have only myself to blame.

Another error in judgement was made with Santos Oil (STO). Yesterday it gapped open near resistance and began to fall away slowly and show much indecision, the beginning of a correction. I took my opportunity and went short at $11.62. I expected the price to fall over a few days but it plummeted heavily in the last half hour. I failed to realise that the selling pressure was "used up" in this period, encouraging longs to resume their positions. Sure enough, today it gapped back and made up most of Tuesday's losses. I didn't close my short position as my stop loss was not yet reached. A gap down tomorrow will encourage me to do so.

In other highlights, I was pleased to see my Computershare (CPU) holding resume it bullishness and I closed off my first winning position, a modest $172 on MBL as it began to look unsteady near resistance toward the close. PMN finally repayed my faith by breaking away from its recent sluggish movement, closing at $5.59.

TAH is making me uncomfortable yet again. In my last post I mentioned I was waiting for a recovery on the drop in price of Tuesday. And this it started to do, pushing daily profit on the stock above $300. But just as soon as it climbed it decided to mess with my mind and fall back suddenly, retaining only a slim profit at close. The stock is proving way too volatile for my liking and trading style and I may reconsider my decision to trade with it.

Oh forgot to mention that at 3:40pm, as the market typically begins to flash like a cheap disco, my uncle rang the doorbell. As my dad was off in the garage somewhere, I had to show him around the renovations while acting calm and personable, even though my mind was racing.

I reaaaaalllly need to move out of home soon.

Monday, April 03, 2006

Bills are more deadly than trading losses

Day 3 - Tuesday
Total Account Value: $5908
Available Equity: $3039
Positions Opened: 4
Positions Closed: 2

This morning I had an unavoidable dentist appointment. I hate the dentist. Not the woman herself, nor the drill or the discomfort, but rather the realisation that my mouth will soon be setting off metal detectors at the rate I'm going. Oh and the exorbitant cost...

It was even worse today because the appointment was at 10am, the same time the ASX opens for the day. All I could hope for was a smooth morning and trust that my stop losses were in the right places. But to cap it off, I now owe $548 and must come in for more treatment!

Automatically my mind drifted to CFDs, hinting that I could make the money back in short time. But placing undue pressure on myself was a huge mistake, and I need to learn never to raise my hopes up like this. I've heard that the best traders don't have aggressive goals or reasons for raising capital, such as buying a car or planning a holiday. If you relax and let it flow, minor losses will not be felt so badly. This is also primarily why I never set a target growth figure for my initial $6000.

Rushing back to my computer with a slack jaw and numb lips I surveyed the situation. LLC, which I had thought would continue falling after making some ground yesterday, proved me wrong. When it reversed, the price was nowhere near short-term support of $13.60, so I will keep such behaviour in mind when I trade LLC in the future. My readjusted stop loss at $14 had taken me out, which luckily for me restricted my loss to a piddly $21.70.

I was glad to see my trailing stop loss strategy has some merit. After holding a long position for two days, I will trail my stop loss to 1c below the low of two trading days ago. The opposite will be done for short positions - 1c above the high.

To illustrate this more clearly, let's say PMN hits a low of $5.40 on Monday and on Tuesday trades higher before reaching a low of $5.45. Before Wednesday trading begins, I will place my stop loss at $5.39, just below Monday's low. This ensures I can retain profits whilst still allowing for price volatility. I will monitor the success of this strategy in the coming weeks.

I notice that Macquarie Bank (MBL) has gapped open this morning above long-term resistance and is looking quite strong. I love gaps. They usually indicate strong gains (or falls) and the following day's price action can be monitored against them. It doesn't take long for MBL to surge over the recent "three times tested" high, so I jump in at $66 even. As the day progresses it posts considerable gains before settling back to just $66.12, but there is enough buying pressure to force it higher the next few days.

My last minute play on CML yesterday now appears to have been a little rash. A star (candle pattern indicating indecision, where the current price is the same as the open with sticks on either side) has formed as the stock struggles at the resistance level, with significantly lower volumes. Common sense says the market will fall tomorrow, which may or may not present another buying opportunity. I reluctantly decide to sell as the frustrating market indecision continues throughout the mid-afternoon. Hesistancy after making decisions is something I must discipline myself not to do.

Tabcorp (TAH) gapped above resistance yesterday and made impressive gains. Today a long red (negative) candlestick formed alongside it and was holding around $15.56. Interesting psychology was involved here. Since the gains were so impressive, I'm sure many longs grew anxious and took their profits earlier in the day. However, the gap was yet to be filled and with so much selling going on, surely some confidence began to resurface in the market.

I bought in with two scenarios in mind:
  1. The price would hover around the $15.55 mark and resume its bullishness the following day (as it would have remained above resistance-turned-support).
  2. the price would make a late rally and surge up to near the opening price of $15.82, at which point I would have taken my profits.
Not long after I purchased a large $23000 worth, TAH followed scenario 2, boosting my profit at one point to $100+. However, only halfway up the day's price range it began to fall again finishing up right near the low of the previous day. I didn't mind the short-term loss, as scenario 1 was looking likely. Still, with hindsight, selling at the high of the mini-rally and entering again at the close would have been much more intelligent. Once again the hesitancy. Now all that needs to happen is for TAH to do what I expect and continue upwards.

Otherwise I might have egg on my face, particularly if you look at my final balance for Tuesday.

Sunday, April 02, 2006

Hooray for Monday!

Day 2 - Monday
Total Account Value: $6139
Available Equity: $4892
Positions Opened: 3
Positions Closed: 0

For the first time in my life I couldn't wait for the weekend to end. Now that I'm working from home, the individual days have become meaningless. Now I can relate to my grandma when she forgets what day I'm supposed to visit. The only good thing about weekends now is hanging out with my girlfriend and the football, but apart from that Saturday and Sunday are just like any other day.

It was frustrating starting my program on a Friday, but luckily it gave me time to focus on my plan and ensure I didn't dive in too deeply too soon with rash decision-making. I also had a chance to speak with two economist friends about trading.

I graduated with a Bachelor's Degree in Information Systems. I chose this degree because I enjoyed computers and using the Internet, and economics/commerce sounded like something boring old sods do. It was only after I completed a compulsory unit of Introductory Microecomonics that I realised my initial naivete.

I enjoyed the subject because of its "mathematical correctness", application to the real world and its "common sense" simplicity. Not only that, but I'd also loved charts, statistics and graphs as a kid. I ended up finishing the unit with what turned out to be my highest mark at Uni, receiving a congratulatory letter from the professor.

Happy and picturing a change in career path, I applied to transfer into a double degree Information Systems / Commerce. However I was unsuccessful because my overall mark average, while very good, was not good enough. A chip on my shoulder formed after that, which until reflecting on it last night had slipped into the back of my memory. But at the time, because the "economics establishment" rejected me, I lost interest and focussed on my Information Systems.

It wasn't until I glanced at "Shares" magazine last year that my curiosity for trading was piqued.

The point is, I have little "proper" knowledge of ecomonics. However, I'm not quite sure that this is such a bad thing, as I'll explain later.

My economist friends have solid, well-educated opinions on world markets, foreign exchange, commodities and all that kind of thing. Naturally they see me as a lightweight. After telling one of them I had starting trading CFDs, he wanted to know which stocks I chose and why. As mentioned earlier, my selection criteria comes down to trend strength and predictability, liquidity and volatility. No fundamentals.

He was more interested in what the company was doing. He liked my choice of Macquarie Infrastructure (MIG) because of further overseas expansion. He liked Tabcorp (TAH) for their strong brand and takeover strategy. But his economist mind could not see why I liked Coles Myer (CML), because they are languishing behind major competitor, Woolworths (WOW). I agree, but I trade short-term on trends, charts and technical analysis. Most of this kind of thing, and I emphasise most, is rather meaningless.

The second economist is a final year Uni "know-it-all" type. He intends to trade CFDs long term (loose stop losses) in safe blue chip stocks like BHP. He repeatedly quizzed me on why I bought shares earlier this year in the small cap resources company Mount Gibson Iron (MGX). I believed the shares were undervalued and the chart indicated a bullish break. He smiled smugly when I was unable to reel off an intelligent sounding synopsis on the outlook for the iron ore industry. Regardless, I was in and out of the stock and made money. Doubters and economists are motivating me even more to succeed.

Onto this morning, the start to the trading week was not ideal. It turns out my CFD platform displays daily instead of total profit and loss on positions. Before knowing this, I was alarmed to see my overnight profit on LLC of $50 had magically turned into a loss of $20 after the stock gapped slightly higher. Overall though, I remained ahead.

PMN stagnated a little and began to steadily fall toward my stop loss level. Later in the day, I noticed it had hit this level and bounced back up, but the stop loss order was not executed! Yet another reason why my provider is less than capable. However, it was a very quick spike, which indicates that perhaps only one low volume trade took place at this price and my order could not be filled. For this reason, I was willing to let it slip, but if it happens again I will be complaining over the phone...

There was interesting price action with quite a few stocks today. Computershare (CPU) made a bullish break above resistance to new highs so I was careful not to miss the wave. My position finished up $206 in just three hours, making it very tempting not to add to my position. It will be interesting to see what happens tomorrow after a 4.6% daily gain.

Macquarie Infrastructure (MIG) made up the previous three days losses so I bought in at $3.85.

The LLC price began making a recovery on the previous day's losses, and I flirted with the idea of closing my short position with a tiny profit left intact. However, the bears showed strongly into the close and I believe the rally was shortlived. To be careful, I've trailed my stop loss closer at $14.

Lastly, Coles Myer (CML) made strong gains as it broke through medium-term resistance with the 12 month high of $10.86 in its sights. I think there is at least one more day's gain left in the stock so I bought a modest 480 CFD shares just before the close.

You see, Mr Economist?