I started the diary of a DIY Investor for the magazine in May 2014, using £50k of my own money reporting each time I made a move.
I invested and traded the AIM and Small Cap end of the market using fundamental analysis, the intention being to make a total return of 20% a year including dividends. I failed.
Thinking back, 2014 brings tears to my eyes, 2015 was good and the first part of 2016 was OK.........................................but then I hit a brick wall.
The wall was called Brexit, post the referendum I found it impossible to value the small companies I focused on as there are simply too many imponderables. Until we know exactly what trade deals we as a country can cut not just with the EU but also with the rest of the world, no company can give meaningful guidance to the markets.
My view was that if I can't value something I don't know what I should pay for it and if I don't know what to pay for something why should I buy it. So with something of a heavy heart I gave up.
However, one of the great things about the market is that there are many ways to play it. In September of 2016 I relaunched the portfolio, this time with £100K of my capital, Swing Trading mainly the Large Caps, but also the Indices and Commodities.
What I do is take large (relative to the capital in the portfolio) very short term positions, at a time when I judge there is unlikely to be any specific negative news flow, using charts to time my entry and exit points. The reasons for trading only the large liquid markets are cost and ease of access. I can buy or sell £20k in one of the FTSE 100 companies in a flash without affecting the price at all and with low cost. Trying to do the same thing with one of the tiddlers is dangerous, expensive and all but impossible.
Using level two price data and short term charts set to show both volume and the open, the high, the low and the close I watch for momentum building up in something and when I think I have, I buy looking to hitch a ride on it, selling out and jumping off when the upward move weakens. In other words trying to catch the swing.
It's a widely held belief that it’s impossible to time the markets, but as the legendary trader from a hundred years ago Jessie Livermore once said 'no man can beat the market, but he can beat an individual share' and this is exactly where I'm coming from. I do believe that if I exercise rigid discipline and only trade when conditions are in my favour I will beat individual shares more often than they beat me.
Swing trading as I practise it is a percentage play, no more, no less. I have to win slightly more trades than I lose and my winnings have to be greater than my losses and if I achieve that I make money.
So how has it gone since the end of September? The short answer is very well indeed, I've had eleven winning trades and seven losing ones; the profit minus the losses totals £3251.
My three best trades were Petrofac Ltd two trades total profit £1478, The AA Ltd + £886 and Scapa Group Plc + £925, my three worst ones were Highland Gold Mining Ltd a loss of £413, Dignity Plc - £361 and Auto Trader Group Plc - £377.
£3251 is not a life changing sum of money in itself, but generated by £100k of capital in three months it extrapolates to an annual capital gain of 13% which isn't bad. Currently I've no positions open and I'm in no great rush to do anything for the sake of it. Right now I'm watching and waiting for suitable opportunities to present themselves as I'm sure they will.
I'll report all I do in 2017 both here in the magazine and in almost real time on www.diyinvestor.net - wish me luch as I wich you luck in navigating your portfolio through choppy waters ahead.
Tuesday 7th March
Running total £3637
Mining shares are not easy to trade because there are so many variables that can effect the price each day.
These range from Chinese (or any other countries) growth figures, to the daily prices of the commodities they mine, to general market sentiment to company specific news, to f/x rates to anything you care to think about. Indeed the list is almost endless.
As is the nature of the beast, risk has rewards and when you get a mining stock right you can make monster money because they're so volatile.
Sadly I didn't time Anglo American PLC (AAL) anything like right yesterday. With hindsight I should have bailed out the moment it opened down, my limit to buy was at 1273p, it was filled at 1259p and that was my starter for ten with no conferring. I've bought expecting it to go up, its first move is decisively down, er duh.
I was going to hold till the close of business today, but after I'd watched the level 2 price screen for half an hour this morning and seen it looking weak with no strong buying coming in to support it I took my loss of £562.
Monday 6th March
Running total £4199
I remain nervous about how 'toppy' the markets are, it all feels a bit 1999 to me. Fagin my trading partner and I are however continuing to trade as and when we see what we believe to be good opportunities, albeit we're looking to smash and grab to keep risk down as low as possible.
Over the weekend I ran the 'slide rule' over the giant mining company Anglo American PLC (AAL), my take is that its pivoting round to go back up after a recent decline so I put a limit order in at 1273p for this morning.
My timing wasn't good, as the mining sector is having something of a crisis of confidence so far today, AAL opened well down and my order was executed at 1259p which takes some of the pain away. Lets hope they man up in short order as I'd like to take £1500 out of them.
Wednesday 1st March
Running total £4199
I'm nervous about the state of the markets. It's very toppy particularly in the US, it might not be a line ahead of the party, but it's certainly a bottle up.
Bearing all that in mind I decided overnight to close my last two positions out, go totally into cash and follow the lead of my trading partner Simon aka Fagin (why Fagin? easy, he likes to pick the markets pocket and he's good at it) and until things calm down a little, only take 'safe' short term trades with very realistic profit targets.
The two remaining trades were, easyJet PLC (EZJ), I'd taken £1130 out of them by way of a chunky dividend payment but gave back £289.92 in a loss on the shares, still a first class result.
The other was Vodafone Group PLC (VOD), the second half of the trade went for a profit of £379.91, you may remember a week ago I took £457 out of them when I began to scale out.
Listen, the markets may well keep going up in which case I've sold out too soon, but never forget 'the best way to make money is not to lose any', fighting, giving them a good slap then running away means you live to fight another day.
Monday 27th February
Running total £4109
One of the rules I try to adhere to is 'never let a profit turn into a loss'. (although in the real world this is easier to say than do).
As a trade SAGA PLC (SAGA) was a total waste of my time and also tied up and put at risk £20k of my capital for three weeks.
As Simon my trading partner so rightly opined, 'SAGA turned into one'. The price had spend a couple of weeks going sideways then seemed to be gaining traction again but at the end of last week it lost momentum and began to look weak, so I decided to put both it and I out of our misery.
Had I been by the computer late on Friday I've have made £20, I wasn't and this morning when I closed out the trade cost me £107.
Friday 24th February
Running total £4216
For a short time on Tuesday I was a little mini master of the universe as my smash and grab raid on Petra Diamonds Ltd (PDL) was up over £500 in a couple of hours. Let me tell you it went up like a rocket, the problem is it then came down with the stick.
After three down days on the trot, I lost my temper with it and decided that's it, enough's enough, there is no more and did the early morning walk of shame, crawling out with what little dignity I had left at about 8.30am getting 144.62p for a loss of £548.
Just as well I did as it finished tonight at 141.3p. However it's not all bad news round here, as on Wednesday I became eligible for the easyJet PLC (EZJ) dividend of 53.8p a share.
2100 shares makes for £1129.80, I've added this to the running total profit which now stands at £4216 since this Swing Trading Portfolio started in late September last year.
Tuesday 21st February
Running total £3634
One of the joys of placing automated buy and sell limits is that you don't have to sit hunched over a so called smart phone or a computer all day. Its a case of set and forget, go away and play. My trade from February 6th on Vodafone Group PLC (VOD) made its first target of 203.4p late this morning and the broker's computers did the business. £457 banked, bring the running total to £3634. Nice.
I decided yesterday that a smash and grab on some gem stones would be a good plan and would liven up a dull day. So last night I put in a limit order to buy 13350 shares in Petra Diamonds Ltd (PDL) which was filled at 148.5439p to be exact.
Usually I have two profit targets and scale out of my trades, with this one I've only set one at 157p and because of the risks with this sort of thing I hope to be a thousand pounds richer and running away with my swag in a week or so. Nice.
As a side issue, its well worth catching the @diyinvestornet tweets. There was one a week or two ago highlighting the chunky dividends due soon from easyJet and Shoe Zone.
I have a vested interest in one of these, easyJet PLC (EZJ) as I currently have 2100 shares, they go xd on Thursday at 53.8p a share putting me in line for a payout of £1130. Nice.
Friday 10th February
Running total £3177
Thought I'd missed out on my ticket to ride with Easyjet PLC (EZJ).
My buying limit placed last night for this morning was 950.5p and in early trading the price climbed rapidly to 960p, but then it fell back and my order was filled.
After the way Gold performed late yesterday and overnight I could do with this going steadily up without too much turbulence
Friday 10th February
Running total £3177
I wasn't expecting yesterday's big sell off in Spot Gold, markets as we all know are driven by fear and greed and when everybody gets up to leave all at once the fear becomes self fulfilling. The price peaked yesterday afternoon for the second time at $1244 and then fell back sharply, doing so again overnight as the far eastern traders bailed out.
First thing this morning I didn't really have an option but to do the same, my current trading is looking for short term swings (mainly upward) and clearly Spot Gold had lost it's mojo with the immediate risk being to the downside. I've an open mind whether it'll bounce from where it now is in the low 1220's or keep falling but like so many others I had to protect my profit, so I sold at $1223.81 for a sterling profit after costs of £266.74.
A profits a profit and I've banked it, but yet again I was a tiny bit too greedy, I was looking for $1250, I should have set it slightly below where the other boys (and girls) were planning to get up and go, at say $1240.
The split second I close a trade whether I've won or lost it's gone and I move on. Vodafone (VOD) and SAGA (SAGA) are up up and running in the case of VOD and flapping around in the case of SAGA.
My next target is Easyjet (EZJ) with a buying limit in at 950.5p
Thursday 9th February
Running total £2911
Met up with Simon yesterday for our monthly trading pow wow. We looked at SAGA PLC (SAGA) not with a view to sending me on one of their cruises to see if I could pull a rich widow but to to see if we could nick some money off them.
We both decided there was money to be had picking their pocket. Overnight I put in a limit order at 185p which was filled as the market opened, if the trade swings upward as I think it will I should I'll make around a thousand pounds which would be nice.
Later tonight I'm going to do the due diligence on EasyJet PLC (EZJ) which had figures out today.
Monday 6th February
Running total £2911
So far I've caught the upward momentum in Spot Gold nicely, as I write the price is $1228 an ounce so my current trade is £320 up. Another 25 points up and I'll be looking to take my money off the table.
Mind you I never got the chance to put my money on the table with AstraZenica PLC (AZN), I'd been stalking them for a week waiting for last Thursday's figures to come out, I spotted momentum building up but it came in too quickly and the price gapped up and away from me.
I've got a cheeky limit order in again today in case the price has a wobble, but frankly I'm not holding my breath.
Vodafone Group PLC (VOD) also pivoted round last Thursday, I missed the fact that they too did so on figures, so last night I also put in another cheeky limit at 193.2p (Thursday's closing price) hoping to buy today if the price flapped around.
It did and so and my order was filled. My targets are 203.4p and 207.8p which if they get hit will make it a good evening’s work.
Tuesday 31st January
Running total £2911 (+£2.49!)
Standard Life PLC (SL.) is history, well at least till the next time I think I detect upward momentum in its share price. I sold at 348.5458 for a profit of £2.49, not out of fear, not because I decided to second guess the market (and by extension the President of America) but simply to stop a profit becoming a loss.
On the subject of profit I woke in the middle of the night and quickly checked the Gold Price. The screen showed a price of 1404 which meant I'd made a profit of over £2000 since I'd gone to bed. My first thought was thats brilliant sell, but then in a split second panic set in as I thought the price has gone berserk but the market isn't moving has there been a Nuclear War?
This demonstrates what a berk I can be, also how a panic attack can take hold in markets. No the price hadn't gone berserk, no I wasn't in the money and no there hadn't been a nuclear war. The broker's computer had gone wrong. Duh.
It took me a while to get back to sleep.
Monday 30th January
Running total £2909.
Interesting couple of days don't you think? The combination of the leader of the free world and social media don't make short term trading of financial markets any easier.
My recent trade in Standard Life PLC (SL.) is now back just below break-even; unless it bounces strongly tomorrow morning it will be history. Moving along, my current thinking is stalk the UK market and wait for things to bottom out (as they always do) and then go back in and in the meantime to be in Gold.
To that end I opened a £12k sized Spot Gold trade this evening on a CFD at 1196.41, there's no vast fortune to be earned on the likely short term movement that my charts showing........................................but if I can take £500 out of it while I'm waiting for things elsewhere to calm down that will count as a result.
Tuesday 24th January
Running total £2909.
From the diary of a private investor January 12th., 'I don't think I've ever bought a share that went wrong as quickly for me as yesterday's purchase of Standard Life PLC (SL.)'
Will history repeat itself? I ask the question because yesterday evening I was looking at the watch list Simon and I use and once again saw what I believe is upward momentum building up in Standard Life PLC (SL.).
No point in looking at what you believe are opportunities and then doing nothing about them, so I put a limit order in that was filled in early trading this morning at 346.1p.
If I've called the swing right I'll make around £500, if I get it wrong again, the loss provided I manage the trade correctly should be less than £250.
Thursday 19th January
Running total £2903 + £6 (!) = £2909.
I wrote on Monday about my respect for the banking industry. Note I don't call it a profession. Well I've got even less now, my plan was to ram raid The Royal Bank of Scotland PLC (RBS) aiming to take £700/£800 off them if I was right and give up £350/£400 if I was wrong.
Four days later I honestly don't know if my basic call was right or wrong, but what I do know is that the price isn't performing as I thought it would in the very short term. I thought I'd spotted a pivot point and that the price would rise sharply ahead of next week's figures and then carry on rising. The first part of my theory hasn't happened as yet, so to use a phrase 'I'm out'.
After all the costs I made £6 profit, what a total waste of time. Mind you it could have been worse; I could have lost the £400.
Viewed like that I suppose it’s a brilliant result.
Monday 16th January
Running total £2903
As per my system I looked in some detail over the weekend at what Mr Market had been up to last Friday and decided I liked the look of The Royal Bank of Scotland PLC (RBS).
Well, that's not quite true, I've no time whatsoever for bankers (remember what rhymes with banker?) but whilst I don't like the underlying state of their business I do feel the share price is pivoting round after a recent fall and therefore worth a short term speculative investment.
The limit order at 221p was met just after the opening bell this morning, it’s now roughly a 50/50 call whether I lose £350/£400 or make £700/£800
Thursday 12th January: £ - 348!
Running total £2903
I don't think I've ever bought a share that went wrong as quickly for me as yesterday's purchase of Standard Life Plc (SL.).
It rose very briefly after the opening bell, then reversed and fell steadily for the rest of the day throwing my money out of the window as it went. Taking losses quickly and without having to lie down in the dark crying into my hankie is very much part of the swing trading I now do.
This trade is good example of what happens when you get the timing wrong with the swings, the momentum I thought I'd seen building up on Tuesday clearly wasn't there on Wednesday and so earlier today I sold for a loss of £348. DUH.
Wednesday 11th January
Normally Simon my trading partner and I work through our charts independently each evening and then make contact via email and ping our thoughts back and forth. Its a great system, because we come at what we do from very slightly different angles and often one of us sees something the other missed.
Last night we decided to meet up and run through our watch list together while we had a bite to eat in a pub. Now trust me on this, if you meet in a pub to talk about putting quite chunky money into anything................................don't touch booze till you've done all the business. We didn't.
We sat in this fabulous, rather posh old pub miles out in the country, with a couple of hundred bottles of wine on a rack a few yards from our table, drinking tea. The power of will power. (As a side issue, I'm not put on earth to promote other people's business's but The Woolpack Inn at Warehorne near Ashford in Kent is a truly great pub, if your down that way, its well worth a visit. www.woolpackinnwarehorne.com)
Am I multitalented or what? I'll be writing a pub guide as well as a Private Investor Diary soon. Back to business, after a lot of discussion we decided to both buy Standard Life PLC (SL.).
I bought in the usual way by placing a limit order with the broker at 360.5p, I'll take half my profit at 372p the other half at 380p and will call time (did you get that) at 354p if it disobeys me and goes rogue.