In May 2014 DIY Investor Magazine’s very own DIY investor, Humbug, set himself the target of achieving a 20% return on his £50,000 portfolio.
Humbug trades frequently in mainly small cap stocks and is disciplined in his trading, maintaining 'the market can remain irrational longer than I can remain solvent'.
He is determined to cash in the minute he realises he has got it wrong, or the market is moving against him, reasoning that 'a loss of 6% can easily be made up, 60% is another matter'.
Humbug shares his highs and lows in a frank and engaging way; his frequent trading may not appeal to those looking to build a long-term, diversified investment portfolio but Humbug’s diary is rarely dull and is often brutally honest.
At the end of September 2016, Humbug hit the buffers with his small cap strategy; he broke his own rules too many times and decided to go down another route - swing trading.
Swing trading attempts to capture gains in a stock (or any financial instrument) within an overnight hold to several weeks. Swing traders use technical analysis to look for stocks with short-term price momentum and also try to capture the intrinsic value of a business – its ‘true’ value based upon a range of objective and subjective measures.
The trader must act quickly to find situations in which a stock has the extraordinary potential to move in such a short time frame; this techniques is mainly used by DIY investors who are able to exploit such short-term stock movements without having to compete with the major traders.
The goal is to capture a larger price move than is possible by trading on an intra-day basis; swing trades tend to require more holding time to generate the anticipated price move.
Stop-losses tend to also be wider when swing trading to match the proportionate profit target; Humbug is going to trade only FTSE 350 stocks - let's see how that goes!
When I first started in radio a huge man with an ugly face and the unlikely surname of Belcher taught me how to kiss. His advice was ‘Keep it Simple Son’ or KISS for short.
After all why make something complicated unless you have to?
KISS also works in trading and investing – a favourable report or positive trading update usually does wonders for the share price and is one of the things I look for each morning on the news feed.
Wednesday 21st December
A win’s a win but I'm not sure whether to congratulate myself or give myself yet another kicking. When I originally took my trade in Dominoes Pizza Plc (DOM) a month ago with a hefty profit target of £1000 in mind over a time line of eight weeks or so, it all seemed a good idea. True to form the price raced up to over £600 profit in four days and I was in Mini Master of the Universe mode, then it stalled and dropped back a bit.
I had a wobble and decided to accept a smaller profit on a shorter time line but to some extent the damage had been done, the trade had lost its momentum and in a couple of days my profit was down to £400. So for once again being too greedy, I deserve that kicking but the congratulations bit comes in for the way I then managed a muck up of my own making.
I've obviously got no control over where a share's price goes, but with level 2 prices I can watch and take a view on where the bulls or the bears are likely to take it, its a bit like watching a tug of war. Cutting a long story short I watched closely and tickled £307.69 profit out when I sold half on December the 8th and this afternoon I sold the remainder for a profit of £324.18.
You might well say 'what's not to like about using £10k capital and making a turn of £631.87 in four weeks' , yeah true, but if I'd been more realistic with my profit target, I'd have done it in four days and that is a clever trick.
I've also got a confession to make. I only actually book profits when a trade is totally closed, although I mention part sales on the day they happen. Somewhere down the line I've missed something out and slightly understated the profit to date. Totally closing DOM has in fact made the profit £3251.27 since the private investor swing trading portfolio started at the end of September.
Friday 9th December
This private investing lark is going really well for me right now, the problem is there's a steaming great pile of dog dodo waiting for me to tread in round the corner and it gets worse, the problem is I don't know which corner. I need to be careful as I don't want to give my profits back any time soon.
Moving on, share price graphs have a personality all of their own (don't worry I'm not chemically enhanced this morning and as a result off with the fairies), no they really do. Some are very volatile, some make very small moves, some go up and down in regular patterns, some follow the market, some lead it etc etc.
Now, the good thing about swing trading is you look at the same watch list of shares each day so you get to know the patterns and in the middle of last month Petrofac Ltd (PFC) knocked on my door again wanting to play (we last played in September as you may remember when I left the game £995.62 richer) this time wasn't as good but this morning my second profit target was triggered, my two targets together yielded £483.82.
Thursday 8th December.
Today didn't start so well when I had a sense of humour malfunction. I switched on the computer to check the markets and faced a blank screen; yep my internet connection had gone down. I know that stuff happens, but when you’re a private investor as I am, you just don't need this sort of thing.
Can I get through to a real live person at the company to get assistance, can I hell, until I had the brainwave to call their sales office and in the first instance pretend to be a possible new customer. I then blagged my way through to technical help (which was in South Africa for crying out loud) and after forty minutes on the phone got them to sort it.
The entire process was a joke, normally I've no problem with a joke at my expense but this one didn't hit the spot. I think there's a gap in the market for someone to provide a real premium internet and phone service, I for one would certainly be willing to pay more to avoid the chaos of this morning. If John Lewis ever gets involved in this business I'll sign up that day.
To add to my temper I'd placed a limit order to buy Just Eat PLC (JE.) at 1% below last night’s close. Missed the deal by 2p and then had the pleasure of watching it do what I thought it would, just go up up up and away.
But then it all got better. My first profit target for Domino’s Pizza PLC (DOM) was triggered for a profit of £307.69 and my second profit target for GKN PLC (GKN) was also met for a profit of £199.45.
Wednesday 7th December
Christmas has come early to my house, last night I was out for my first Christmas Dinner of the season and whilst I may get fed up with turkey by the New Year, last night's first taste was great.
Today is pretty tasty as well - I closed my two FTSE 100 ETF's for a profit of £363.59, after recently moving my profit targets down for the AA Ltd (AA.) both new targets were met for a profit of £886.41. The first profit target for GKN PLC (GKN) was met in less than a day for a profit of £111.02 and my old playmate Petrofac Ltd (PFC) produced a profit of £152.92 when target one went under the hammer.
In round figures a total profit banked for the day of £1514.
So YO HO HO around!
Tuesday 6th December
I bought into the AA Ltd (AA.) at the end of October and was planning to hold the position for a month to six weeks and to take 15% out of it. Five weeks into the trade I've downgraded my profit expectation and as a result have just sold half my holding for a profit of £401 (8%).
I do actually think there is 15% in it, but it’s been slower to ignite than I thought it would be, so my timeline's slipped and turning money over quickly is very much part of what I'm now doing. It’s a balance between how much am I likely to make and how quickly.
I've written before about not being a 'dick for a tick', last night I put a limit order in to buy GKN at 305p today (just below yesterday's close), at one point I thought I'd been too clever by half as the price got away from me this morning, it’s now coming back down and I'm now a whisker away from being the proud owner of £10k's worth of GKN.
Friday 2nd December
One of the girls from the cafe down the road popped into my shop today to say be on your guard as some little tosser had just nicked their tip box and she and the other girls in there weren't very happy.
I thought I know the feeling, as Mr Market had had a hissing fit today with GVC Holdings Plc (GVC) in the process nicking £310 out of my pocket when he dropped the price off a cliff.
I spent most of the morning looking, but can see no reason for what at one point was a 5% drop, there's nothing on the newswires and my mate Teresa who is so good at fundamental research that she could easily hold down a job as a senior analyst in the City, couldn't find out anything either.
But facts is facts and the fact was that the price had fallen straight down through my stop loss. My rules say never let a profit turn into a loss (earlier this week I was £300 up) so I had to sell simple as that.
Friday 25th November
On Tuesday I wrote 'just bought into Highland Gold Mining (HGM) planning to sell out half at 147p the other half at 156p, This one is in effect a leveraged play on Gold, it can work brilliantly, it can also go bang'.
Two things to say. One, plans are what makes God laugh, so much for selling out at 147p or 156p........................................try 128p.
Yeah the trade went wrong, Spot Gold has been very weak and at one point in the middle of last night was down to $1177, leveraging of course works two ways, one for you, one against.
On Tuesday I thought I'd detected a turn in both the Gold price and HGM, I was wrong.
Changing the subject, I was asked today by someone who knows me slightly and reads this column 'were the trades I report real?' The answer was yes my money goes where my mouth does. He also asked 'did I really not give a toss whether I made money or not, because that was how it read.' The answer was no I care very much whether I make money or not and do a great deal of background research prior to putting on a trade, but doing what I do can't be done with scared money, hence the casual approach.
In fact I take it a stage further, In the short term I don't even think about the money flowing in or out, it’s a game and I'm playing the odds and provided I win more than I lose over time the money takes care of itself.
At least that's the plan, which brings us back to what makes God laugh.
Thursday 24th November
Not a good day at the office, the collapse in the spot gold price is giving my recent trade in Highland Gold Mining (HGM) something of a kick in the ingots and Dignity (DTY) hasn't worked, it closed yesterday below my stop level of 2517p.
I like to enter trades and exit them for a profit automatically on limit orders, but I tend to take my losses manually the morning after the close, working on the basis that it doesn't matter who you dance with at the party, it's who you go home with that counts.
Prices go all over the place during the day, but as I'm not a day trader it's the close that I take as my reference point. Dignity cost me £361 as I got out at 2507p, but not to worry as something has happened to Domino's (DOM), my holding is up £450 today for some reason. It's not at my profit target so I'll leave it be for now.
What do they say, 'one door closes but another one opens'.
Wednesday 23rd November
Last night I decided that the snappily named Domino's Pizza Uk and IRL PLC (DOM) was going to go up 10% in the next couple of months.
Don’t you just love it, 'I decided etc etc' - talk about delusions of adequacy! Perhaps a better way of phrasing it would be to say, 'I think or I hope it will go up 10%'.
Anyway, either way, I put in a limit order overnight at 329p, just below the close and watched the price race away from it all morning. Then the market fell back in the early afternoon (perhaps in response to the Chancellors Autumn Statement? who knows) and it got filled.
Excellent, because it now seems to be going back up again; its 330p as I write.
I've said before how difficult it is to price limit orders. The huge advantage of them is that you can place them when the markets are closed and therefore there's no pressure to buy as prices jump around in front of your eyes as they do in opening hours.
The risk to buying in a live market is that you can easily get suckered into paying too much. The drawback is you have to take a view in advance of what is likely to be the best price you can achieve.
I missed out on Rightmove (RMV) the other day by being too greedy, however it’s beginning to look as though I've got today's purchase of Domino's right to almost the exact penny.
Let’s hope that's a good omen.
Tuesday 22nd November
Busy busy busy and at 10.30am still in my dressing gown.
Automated trades to take profits on Scapa Group PLC (SCPA) kicked in producing a nice profit of just over £900. As you may remember I had a nasty run of three losses recently, it never goes amiss to wipe the slate clean.
This game is all about fear and greed, confidence and despair. It’s easy to get over confident and think you’re a MINI MASTER OF THE UNIVERSE when it’s going well and easy to want to curl up and die when you’re losing heavily.
A quick rough tot up, I've been running this swing trading portfolio for the DIY INVESTOR.NET site for about two months.................................I've banked profits of £1522 which is about a 9% return a year.
Just bought into Highland Gold Mining PLC (HGM) at $133.3628; planning to sell out half at $147 the other half at $156.
This one is in effect a leveraged play on Gold, it can work brilliantly; it can also go bang!
Friday 18th November
Looking through my charts last night Rightmove (RMV) shone off the page. So as per my system I put in a limit order at 0.5% below the closing price.
I was too clever by half, or as our American best friends with whom we have a special relationship with would say, I was a dick for a tick. I missed out on buying by being 3p too greedy, 3p on a £38 share for crying out loud.
Shame to say the least, as it’s up 88p as I write.
Working out where to place limit orders is not a science it’s a black art that I don't always get right. So I decided to check the market just before the close this afternoon, Dignity (DTY) and GVC Holdings (GVC) both met my buying criteria, so rather than wait till tonight to put orders in for Monday I short circuited the system and bought them both.
Ten grand of each, GYC at 649p and DTY at 2582p.
Wednesday 16th November
If it wasn't for the fact that my charts are in my computer I'd be tempted to stamp on them after the way my two leveraged ETFs performed today.
I still think there's a decent profit in the trade but without doubt I got my entry wrong. DUH.
However I think I gauged the price about right for my Petrofac (PFC) purchase. It's never easy working out the night before exactly where to pitch your limit order. Be too clever and go in too low and the order doesn't get filled, go in too high and you throw your money away.
With hindsight I would have got away with 790p today, but I'm happy enough with 794p.
Wednesday 16th November
I was bored to death yesterday afternoon so I got the laptop out, curled up by the fire and played around back testing the FTSE 100 (UKX) to see what trading parameters would consistently have made money over the last three years.
Back testing is a two edged sword, in that you are looking at history but going to use any conclusions in the future. As the saying goes, the past is no guide to the future. However it is your starter for ten.
My chart says the UKX is going to go up 2% in the next couple of weeks, let’s hope it’s right because I put ten grand on it in two ETFs (exchange traded funds).
£5k into LUK2 a 2 times leveraged one and £5k into UK3L a three times leveraged one.
Never traded either of these before so very interested on two levels; one I want to make money obviously, two I want to see how the leveraging works out in real life.
Oh yeah I nearly forgot, I also put a limit buying order out on my old mate Petrofac (PFC) at 794p. I say 'my old mate' because I made a thousand pounds last time they knocked on the door asking if I'd like to come out to play.
Friday 11th November
Still slapping myself round the portfolios for being too greedy with my Spot Gold trade and not selling out in the mid $1330's on US Election night, but I called coming out at $1278.39 for a small profit, as I could no longer make any sense of my chart about right. Its since fallen over 50 points and in my view is going to test $1200.
As always its masterly inactivity (don't just do something, stand there), Mr Gold Market will calm down sooner or later and then I'll have another little nibble.
I thought that the recent chart of Scapa Group PLC (SCPA) if not a thing of beauty was at least very interesting, so I put a slightly cheeky limit order to buy in at 277p, which got filled when the price had a wobble about 11am this morning.
More by luck than judgement I bought right at the low of the day. My initial profit target is 289p where I plan to sell half, the balance will go at 299p.
If I get this one right there's £500 in it for me
Thursday 10th November
As I wrote on Monday 'This game is never easy, but its great fun'.
To re-cap, I spotted a breakout of the Spot Gold price a while ago, bought in at $1269.55 with a conservative profit target of $1302. Changed my mind and raised the profit target to $1340.
Watched the price run up to my initial target and bounce off it three times before falling back in the run up to the US Election Night. Took the view that there would be some extreme volatility especially if Trump won and moved my stop right out of the way.
So far so good.
I also wondered if there was a deep undercurrent that the US polls weren't picking up on and was right about that. As a Trump victory became more and more likely stock futures collapsed all across the world and the Gold price exploded upwards.
I went to bed at 5am on Wednesday morning with Trump about to be given the keys to the White House and Gold just below $1340, fully expecting to wake up (yes even at my age) to find I'd made a really great trade.
Er no, markets decided that maybe Trump wasn't so bad after all, the FTSE 100 was up and Gold was back down to around my initial target of $1302.
During the day it fell back further and on the basis that one should never let a profit become a loss and because the chart now looked a mess I closed it last night at 1278.39 to bank £88 profit.
As is the way with things, this morning its up 10 points. Oh well.
Lesson to be learnt? Yeah, I largely called a complex situation right..........................................................but I was too greedy.
Monday 7th November
I've currently got two trades running, The AA Ltd (AA.) which in the week since I took it out has neither frightened me nor made me that happy. The only thing that's a bit of a worry is that I'm in profit tonight by exactly £6.66. (yeah spooky init) It would be good if this one stopped mucking around and simply went up.
I changed the profit target on my Spot Gold trade, raising it from $1302 an ounce to $1340.
This might have been a mistake, as if I'd left it where it was I'd have banked £350 profit last Wednesday, instead after the FBI cleared Mrs Clinton of being a naughty girl last night, the price has come down with a bump today.
I've just checked the price a moment ago (6.21pm) and I'm still £90 up and to be honest I'm tempted to take it.
However I wonder if just like Brexit there is a deep undercurrent in favour of Trump that the poll's aren't picking up. If so and he wins, I think Spot Gold will really explode upwards. This game is never easy, but its great fun.
Tuesday 1st November.
From the Humbug blog of the 19th of October, on the subject of Spot Gold I wrote 'I think I've spotted a breakout and as always put my money where my mouth is......................................my target for taking profits is $1302.55'.
I had indeed spotted a breakout and Spot Gold is 'smoking' ahead of the US election, also for what it’s worth I think it will do well after the election, but that's somewhat beyond the scope of a portfolio dedicated to swing trading.
The question I've been asking myself all day is, is my profit target too low? You know what’s coming don't you, greed - to coin a phrase - is good, and so I've upped the target to $1340 an ounce.
Listen, I might as well get hung for a sheep as a lamb eh?!
Monday 31st October.
Very worried about what the latest FBI investigation may throw up (if you'll pardon the expression) and what it may or may not do to the market in the coming days and weeks.
Dangerous dangerous dangerous, the problem with this game is there's always a can of worms lurking somewhere.
As I wrote on Friday, 'with these swing trades I don't want any nasty surprises if I can avoid them', to some extent I can guard against company specific problems by keeping a close eye on the RNS and the reporting dates, but wider world nasties are totally outside my control and life and making money has to go on.
The AA Ltd (AA.) is a business that's been struggling lately, but their latest report and more to the point my chart says that things may be improving.
Just before the market opened I put a limit order in to buy at 255p (about 1% below Friday's close) which got filled at about 8.20am when the price started dancing around it's handbag.
Events may cause me to change my mind, but my current thinking is to run this trade for a month to six weeks looking to take 15% out of it.
Friday 28th October.
As I write its coming up on 9am and I've just manually sold my holding in Hiscox Ltd (HSX).
It hadn't hit my stop loss but I was on the way to being time barred. With these swing trades I don't want any nasty surprises if I can avoid them, so I aim never to be holding when a company reports.
Hiscox are due to update the market next Thursday so time was running out and after an initial swing upwards it’s not been performing well in recent days, so I took the view it was time to leave them to play on their own.
Closed out for a loss of £116.
Currently the only trade I have running is my Spot Gold CFD, that's more or less at where it started, whether it works out or not is another matter, but its a sensible position to be holding in the last few days of the US election.
Wednesday 26th October
Off to dinner with among others 'MR BIG' who always regales us with his latest business success that's made him millions.
Having just lost Auto Trader Group PLC (AUTO) to its stop loss after a day when all it did was steadily fall lower and lower till it hit 367p losing me £377 in the process.
I may have to restrain myself from spitting on the floor when he starts telling us how clever he is. Mind you there may be some light relief, I've just checked the menu of where we're going and (I promise this is true) they have a dish called 'Shagorama'.
I'll report back next time I update.
Monday 24th October
Mini disaster, Dignity PLC (DTY) opened and spiked down this morning on a wide spread before immediately bouncing right back. But those few seconds were all that was needed to trigger my stop loss.
Shame it happened, as a result I book a loss of £307.
I only trade the large companies (the FTSE 350) but Dignity is one of the smaller ones in the index and as such is vulnerable to such moves and because I'm only looking to take small percentage profits out of each trade I naturally run with tight stops to protect myself.
Today it worked against me.
Friday 21st October
Not that happy with either of my trades in Dignity (DTY) or Spot Gold currently, but will hang in there with both for the time being.
I looked at all the shares in the FTSE 350 yesterday evening and took a shine to Auto Trader (AUTO). As per the system I placed a limit order to buy at a fraction above yesterday's close at 380p.
My phone has just pinged to tell me it was filled, so the big decision right now is do I get up and start being dynamic or do I roll over and go back to sleep.
Wednesday 19th October
I've been watching the Spot Gold price like a hawk since I closed my last profitable trade a few weeks ago. It fell sharply, but then bottomed out and has spent the last week or so consolidating between $1250 an ounce and $1260.
I think I've spotted a breakout and as always put my money where my mouth is.
I bought 10 mini contracts as a CFD (contract for difference) at $1269.55, my stop if I'm wrong is $1250.55, my target for taking profits is $1302.55.
Tuesday 18th October.
Lost Greggs PLC (GRG) to my broker held stop loss at exactly 8.02am just as the market opened, whilst I was sleeping the blissful sleep of those who don't have to set alarms. There are many joys to being self employed and a lie in when you’re knackered from too much work is one of them. Mind you 'the too much work' can be a downside.
A loss of £331.93, so was this trade a mistake or just one of those some you win some you lose? I've looked at it long and hard this morning and looking at the chart pattern I'd take it again today if it re-presented itself as before. Was my stop in the right place? Well I won't know that for a week or two, but my initial thinking is, give or take a touch it was.
I don't regret taking it in the first place, so yeah one of those things, days you win, days you don't.
Friday 14th October
My phone pinged at about 8.10am to tell me that my limit order to buy Hiscox Ltd (HSX) had been filled at 1036p.
I got lucky with this order, the price had opened slightly up from last night's close but spiked down momentarily and the brokers computer did the business in a split second.
My stop if it goes mammary glands up is 1014p, my first profit target to sell half is 1070p, the second to sell the balance is 1087p.
Thursday 13th October
Writing this about 9.15pm and just realised I'm missing the Apprentice. Not to worry I'll get it later on catch up. I would really like to have lunch with Lord Sugar and soak up some of his wisdom (as well as eating a seriously expensive bit of steak) to my mind he talks lots and lots of sense.
I'm still of the opinion that the market is heading down to 6800 or thereabouts but it won't be in a straight line and not everything is going to fall, so I've just placed a limit order to buy Hiscox Ltd (HSX) at 1036p for tomorrow morning.
I'm willing to bet that there's 4% in it and 4% of £10k is worth not getting out of bed for. I say 'not getting' because the process of buying needs no further input from me, if the price is right it'll happen automatically.
Wednesday 12th October
I spent most of yesterday driving and listening to the radio. Much talk about the pound’s fall in value, the liberal (with a small L or is it a C) 'elite' were bleating and generally having a field day wallowing in woe.
No one even had the nous to point out what a benefit to tourism (one of our biggest industries) this would be and how it could be catalyst to revive our seaside towns.
Anyone remember what happened when there was a sharp drop in sterling around 'Black Monday'? Yeah right, the longest ever boom in our history and history often repeats itself.
There is bad in this fall for sure, but an overpriced currency is even worse and that's what we had.
As a side issue after I got back last night I had a look at the market and placed a couple of limit orders to buy this morning. My phone pinged a few minutes ago to tell me they'd been actioned.
Greggs PLC (GRG) at 1008p and Dignity PLC (DTY) at 2777p.
One of the side effects of what the media will soon be calling 'the sterling crisis' is this very toppy market that I'm wary of. The real danger I face with these two trades is the market suddenly gapping down through my stops. Wish me luck.
Wednesday 5th October
I'm sitting here thinking am I a prat of a scaredy cat who bottled it, or am I a wise and mature private investor who took a pragmatic view on what he saw unfolding. I'll know in a week or two.
I wrote yesterday that I thought the market was dangerous and toppy (it's less toppy in America me-thinks) but that I had to trade what I saw, not what I thought.
This morning Ocado (OCDO) was holding in the low 260's but a bit spiky making fairly small but quite sharp movements and Stagecoach Group (SGC) was down almost 3% on steady selling at about my entry price of 210p.
I looked at these two and thought in isolation would I hold these till the end of the day and then re-evaluate, the answer is yeah I would, although I'd keep a close eye on SGC.
Then I thought what are the chances of the market taking a sharp run down sometime soon, maybe not today, but soon and I thought its a no brain-er. It's got ahead of itself, its going to correct but of course I don't know what will spook it or when it'll happen.
Remember trade what you see, I'm looking at a graph of the FTSE 100 (UKX) which has gone way too far up the page too fast. So I sold and took all my money off the table. Ocado (OCDO) went for a profit of £57 and the rump of Stagecoach Group (SGC) for a loss of £26.
Tuesday 4th October.
The first price target (T1) for my recent purchase of Stagecoach Group (SGC) was hit inter-day and the profit of £246.49 was taken automatically for me by the limit order. I could get used to getting emails on a regular basis telling me I've just made some more money, it brightened up my morning.
The market is looking very 'toppy' and dangerous to me right now, but the trick with what Simon and I are now doing is to trade what you see not what you think. So I'll keep my nerve with my OCADO (OCDO) position and the balance of the Stagecoach one and see what happens.
Spot Gold has come off a cliff today, I'm watching it like a hawk to see if/when it makes sense opening another long trade.
I placed an overnight limit order on Stagecoach Group PLC (SGC) at about 1% below Friday's closing price.
The stock began rising in early trading and I thought I'd lost it, but then as so often happens there was a little wobble, the price fell and the order was filled at a fraction under 210p.
The plan is to act like Fagin did back in the day and pick their pocket for about £700. My target for taking half profits is 222p, the target for the balance is 228p and the stop loss if I'm wrong about it pivoting is 203p.
Simon emailed me in the middle of the night to say had I noticed the price action of Hiscox Ltd (HSX).
This company's an old friend who's divi'd up for us in the past. It closed on Friday at 1042p. I needed to see it rising to want to buy in and it didn't disappoint, but sadly I faffed around and missed the moment.
As I write its risen too high, so as I never ever chase prices I've put a limit order to buy in at 1050p. To be honest I think its got away from me, but maybe just maybe ............................
Friday 30th September.
One of the joys of the swing trading that I'm now doing (which I've nick named the 'Fagin' system, because I'm aiming to pick the markets pocket) is that I do not only my plotting and planning in the evening when the market is closed, but place my trades with the brokers using limit orders at the same time.
There are some dis-advantages to this but the principle advantage is that it removes the pressure of sitting in front of a screen the following morning watching prices flapping around and trying to decide is now the moment to press the buy button.
So last night I decided to buy OCADO GROUP PLC (OCDO) if the price fell back 1% from yesterday’s close.
The market was having a twitching fit this morning and falling sharply, so my buy order was filled almost at the open at 260p. My stop if it all goes wrong is 246p, my profit target for half the holding is 286p, the target for the remainder is 300p.
£1200 to win if it works perfectly; £500 to lose if it goes wrong.
Of all the pockets there were to pick last night let’s hope 'Fagin' picked the right one.
Thursday 29th September.
I'm not a naturally gifted trader who has an instinctive feel for the market, my results are more perspiration than inspiration. In the light of this fact I was looking long and hard last night at the chart of Petrofac (PFC). My view was that on the back of yesterdays OPEC decision the price was likely to take off this morning, my dilemma was should I raise my target selling prices?
Because I'm not a 'natural' I decided to stop trying to be clever and stick with the system Simon and I have developed where we set conservative profit targets that are slightly more likely to be hit than not and cover our bottoms with (hopefully) intelligently placed stops.
The result was brilliant, both my targets were met in early trading. These were executed automatically on the limit orders I had with my brokers, half the holding going at 862.75p the other at 881.0168p. These plus the dividend that went xd the other day have generated a profit after costs of £995.62.
A grand in your hand before breakfast helps digestion wonderfully.
Wednesday 28th September - am
Utterly knackered, went to see my daughter yesterday and spent seven hours being run ragged by a three year old grand-daughter. Mind you she is very sweet and my heart (which is normally as cold as stone) melted as she went to sleep (eventually) clutching the donkey I'd given her.
Hoping that walking around (and looking) like a zombie hasn't clouded my judgement this morning. The second half of my Spot Gold trade isn't working out that well, its only just above its stop at 1322p. I had a small profit out of the first half of the trade when I sold at 1340p and if my stop is hit I'll have to settle for just that. I've decided to let nature take its course, it either bounces up or it doesn't.
My other trade Petrofac PLC (PFC) had me flapping yesterday when it had a bad hair day and wasn't a million miles away from testing its stop, today is different its up in the high eight forties and is testing its first profit target. I've looked again at my charts and have moved my stop up to the entry point at 805p and in a move I hope I don't come to regret have upgraded my profit targets slightly to 856p and 881p.
Moving the stop makes total sense, no question of that. Moving the profit targets? Hum jury's out.
Wednesday 28th September - pm
I said in my last posting that I was going to let nature take its course and it did. The second half of my Spot Gold trade breathed its last late this afternoon when it hit its stop loss of 1322p for a loss of £3.65. A few days ago the price had risen to 1340p so I took partial profits, closing half the position for a profit of £86.50, overall the trade netted a profit of £82.85.
Over the coming days I'll be keeping a close eye on Gold, looking to enter again either via a CFD (contract for difference) or via investing in one of the gold miners. My favourite being Highland Gold Mining (HGM) although my view is that at 150p its somewhat over egged right now.
I see tonight that OPEC is reported to have agreed amongst itself to restrict oil production. This should be good for my long trade in Petrofac (PFC)
Monday 26th September. Its never easy making money from the market, but even when I’m doing badly I love almost every minute of it. Its therefor with sadness that I’ve decided to close the DIY Investor Portfolio, for reasons I’ll detail below. I originally set it up with £50k, the idea being to trade/invest in Small Cap and Aim shares, looking to make 20% a year.
I’ve failed and whilst it hasn’t been a disaster nor has it been a success. I over traded and lost money in 2014, had a rethink and calmed down, making money in both 2015 and this year. I don’t think there’s any point in giving you a blow by blow account of exactly what happened trade by trade as its history, but the bottom line is that I took 68 trades, 43 of them lost money and 25 of them made it. Because I tried to ‘stop the bleeding quickly’ aiming to cut loss’s in short order but run profits, the overall position from start to finish is a profit of £3004.
Notable success’s were AB Dynamics and Cranswick where I doubled my stake in each case, my biggest failure was Tungsten where I lost three quarters of my stake when I broke my own rules as it got away from me. DUH.
The reason for closing the portfolio isn’t principally its lack lustre performance, but that post Brexit (which I totally support) I’m finding it almost impossible to value these small companies, as there are now too many imponderables. Compounding my problem is that its always been a dark art timing the trades because price action isn’t as reliable a guide as it is with the bigger more liquid shares. Small company prices are ‘controlled’ by the market makers to quite an extent, they are also very susceptible to tips and rumours.
Adding all these together makes the current portfolio ‘the tooooooooooooooooooo hard file’ and signals its time for me to not just move on, but hopefully to MOVE ON UP. I’ve enjoyed the high and low points of the last two and a half years greatly, I hope you have as well.
The new plan is to refine and extend the SWING TRADING that I do in conjunction with my trading partner Simon and report the results here in as close to real time as busy lives permit. Currently I’ve got two trades running, a long position (betting the price will rise) in Petrofac (PFC) opened at 805 and currently 830 as I write. The first target to take partial profits is 850, the final target is 875 and the stop is 779. The second position is in Spot Gold via a contract for difference. Opened at 1322, first target was 1340, I say ‘was’ because I closed half the position when it reached that last Thursday (it since fell back) and is currently 1337.5. Final target is 1360, the stop was moved up from 1295 to 1322 when the first profit target was met.
Or INDEPENDENCE DAY as I believe its now known.
I've been busy during the last month trading fairly big swing trades...........................................like the one on Phoenix Group Holdings (PHNX) I took inside the DIY Investor Portfolio last month. A £5k trade that returned a £240 profit after costs. No big deal you might say, yeah you’re right but I was out of it in one week flat and the profit was 4.8%.
Again no big deal you might say, hum, multiply 4.8 by 52. I owe my mate Simon who got me into this idea an expensive meal somewhere at the very least.
What I decided to do was trade these swings whenever I saw a suitable one, but to do so on my accounts outside the DIY Investor Portfolio as they're not really within that remit. As is the nature with this kind of trading some work and some don't, the trick is to cut losses when/if they hit their stop loss but if they work, run the profits to their quite conservative targets and then exit and be happy.
On the subject of 'exit and be happy', the value of the core holdings in the DIY portfolio have come off a cliff this morning following our vote to leave the EU and do you know what I couldn't care less. In the long run most of them will come back strongly as over time our economy really gets going.
What I'm hoping is that there is a real rethink about the way our country is run and how wealth is generated.
Generating wealth that all of us share if we're willing to work hard and take risks is the way forward. We also need to make certain that that wealth is created all over the country not just handed out to the elite as part of their package for being on the gravy train.
In the medium to long term if we get a leader/government with the right vision, there are going to be plenty of good exciting new companies starting up to invest in.
We live in exciting times.
Had a meet up in the week with my mate Simon who also trades the markets and I thought I'd share a hot tip with you from the day.
Don't try and go from the country to London on a seriously wet day when the trains are on strike, but you don't know this till you get to the station.
Sense of humour....................................yeah rock on, mine failed.
Simon has recently made a lot of money trading big liquid companies that are oversold but look like they've pivoted round, but selling the moment they look fully valued.
Over a cream tea in the lounge of a grand hotel he talked me through his system. Its all about ratio's and probabilities and involves tight stop loss's and lots of discipline.
Now I've never felt the need to be tied up and spanked by a dominatrix, but I do like discipline and practice it in my trading. So I've decided to give it a whirl.
There's no point in mucking about is there, so I set up the excellent Sharepad to tell me when the conditions I was looking for were met and today's the day for Phoenix Group Holdings PLC (PHNX) the lucky company now has me on its share registrar for £5K worth of shares bought at 835.43p.
It takes a certain amount of bottle to just go 'yeah I'll have some some of that', but as Muckler so rightly asks in his article of a few days ago, WHO CAN YOU TRUST? The answer of course is yourself.
The problem with capital is that there is never enough of it; well certainly there isn't in my life.
I wrote a while back about an idea I had for actually taking medium term positions in shares via the spreads (rather than using them just for very short term trades) so as to introduce some leverage into my DIY Investor portfolio.
The jury is still out on that one, but I've had another idea which has some merit. Its this; with a good company that I have confidence in, when the valuation becomes toppy and/or the price runs out of steam, top slice taking 'my' capital out to deploy hopefully more profitably elsewhere, leaving my profit in as a free carry. Bank the dividends that in a sense have come out of thin air, be happy and wait for the valuation to fall to a sensible level. When that happens re-invest and hopefully repeat the exercise.
Good plan or what?. This morning I put it into action with Trifast (TRI) a share I've done well with recently. Instead of banking my £1273 profit I left it invested and will watch and wait for a suitable point to re-invest when the valuation looks conducive.
I like the business model of McCarthy and Stone PLC (MCS) lots. I'd hate the idea of living in one of their sheltered housing developments very much, but investing in them is a different matter. The share price has climbed steadily since they floated on the market in early November and as of last night was up 25% at 250p. Today it fell to the mid two thirties because some of the institutions have shares to place.
This seemed like a buying opportunity to me, so in I went, £2000 worth at 237.1p and it gets better their maiden dividend goes XD tomorrow which will defray some of the entry costs. Whilst any company can get into difficulties, this one strikes me as a very safe long term hold that I won't need to sit and watch like a hawk all day every day.
You may remember, a few weeks ago I won the price of a new pair of shoes from the market when I took a Kangaroo tail trade to take my mind off Osborne droning on about the budget he was inflicting on us. Last week when I was off sailing I found exactly what I was looking for and now own a very smart pair of boating shoes courtesy of the Chancellor of the Exchequer. Better still I 'won' the money on the spreads, so technically it was a bet and as such is tax free. Some you win.
But sadly some you loose. I went Spring Cleaning today which was an expensive exercise. I sold out of Avon Rubber (AVON) at just about break even. Shame as I was a couple of grand up with this one a few months ago. They make and market state of the art gas masks and milking machines for cows and have been hurt by the over supply and resultant weakness in the dairy industry. Their next report is in a few days, so I sold in self defence in case things have got really bad down on the farm.
Took a £1200 loss on Quantum Pharmaceutical (QP.). This one had an exciting pipeline of new dugs waiting for approval, guess what? Yeah you got it...................................there were/are delays. I do actually think the valuation at around 60p a share is about right as things stand, but I've waited patiently for a couple of months for the price to start creeping up and it hasn't, so this morning I bit the bullet and sold out. Glad its gone to be honest, I shouldn't have bought it in the first place. Buying into a story of what will/may happen in the future is always dangerous, will I never learn.
Sprue Aegis (SPRP) Oh what. These people market smoke alarms and have done really well for a while. As I understand their business model they outsource the manufacture to somewhere in China and this is where the story begins to go badly wrong. Some of the 10 year life sealed units are suffering battery failure after 3 years and have got to be recalled. How many? Who knows, but the risk is the number will greater than the one they first thought of. Added to that they warned on trading conditions and the market gave them a kick straight in the -----. Price down 50% in no time.
I was on holiday having a lay in when the drama first broke at 7am last Monday and missed it. Even if I'd been waiting with my finger on the button at 8am when the market opened I'd still have still got badly hurt. I've spent a week waiting for the dust to settle and don't like what I see. My guess is the risk going forward is to the downside even now. Out for another loss of £1200.
I would never invest in a Chinese company listed in London, too many of them go badly wrong in short order for my taste, I'm now wondering should I avoid any UK ones that outsource the manufacturing of complex components to there as well.
Its frightening the speed at which SPRP unravelled and indeed its frightening the speed anything can unravel sometimes. This is clearly what the politicians are scared of with Brexit and for certain there will be turbulence and volatility in the next few months. This private investor thinks the prize of getting our country back will be worth the pain. After all you don't make omelettes without breaking eggs do you?
I've already got a small FTSE 100 short (betting the price will fall) running on the spreads. Its a bit underwater, but I really think that as we get ever closer to the referendum on brexit (in which we must vote to leave) the FTSE is likely to fall on the uncertainty. So I've just topped it up, £1 a point at 6186 with my stop at 6430 and my target/limit to take profits at 5731.
The danger as I see it is that the FTSE 100 is weighted to commodities, these are priced in dollars and the dollar is strong. However my money thinks that the uncertainty will win the day and the index will fall. If I'm right it will partially hedge the rest of the portfolio, if I'm wrong and the market rises the loss on these trades will blunt the profits I would have made. But as the saying goes 'you've got to risk it for the biscuit'.
Nightmare, still not got the shoes I 'won' with my Kangaroo trade on TUI. My old boat shoes are an embarrassment (and make no mistake I don't embarrass easily), so I decided to buy a classy new pair. Can I find the size in the style and the colour I want............................can I hell. What people see in shopping passes me by, I can never ever find what I want when I want given the limited amount of time I have to look.
Mind you I have had a great day today because I took £4k profit out of the market. I top sliced two of the DIY Investor portfolio, AB Dynamics PLC (ABDP) and Cranswick PLC (CWK). In both cases these are great companies doing really well, but the share price has got a bottle ahead of the party, so I sold part of each holding. I can either take the view that I've taken my profit out of them, or I can take the view that I've taken 'my' capital out of them leaving the profit running as a free carry on the shares. Either way a great result.
In some ways knowing when to sell out is more difficult than knowing when to buy in. What I try to do is research good companies and only buy in when they are keenly valued, selling out when they become fully valued. Easy to say, not so easy to do.
In a foul temper. I don't know enough about computers to know if it was my anti-virus software being overzealous or whether I did in fact pick up a virus, but my computer has given me hell all day. Think I've managed to get it sorted after hours of swearing. Just done a quick tot up to see how the first three months of the year have gone. The answer is neither here nor there really, the portfolio is down £679 since January 1st.
Bearing in mind how difficult the market has been since the New Year, I take that as a result.
On the day that the news breaks about the terrible problems with what's left of the UK steel industry the FTSE 100 goes up 1.6%. Sure I understand the technical reason for the rise but it seems perverse to say the least. As I understand it, because of EU rules the government can't step in to help (other than doing a bit of hand wringing and mouthing platitudes) which will doubtless be a great comfort to the people of Port Talbot. I could write a 5000 word rant about how stupid we are to simply throw our industries away one after another...................................but what's the point.
Yet another good reason to vote out on June 23rd.
Yes Yes Yes, even though it doesn't count for the portfolio, my Kangaroo Tail trade on TUI paid of, closed out on the automatic limit order I had in place at 1008.................................result, a new pair of shoes.
Late yesterday I took a trade on the spreads that isn't going to count for the DIY Investor Portfolio whether it works or not. It’s just a giggle that will buy me a new pair of shoes if it goes to plan, I was getting in a temper with Osbourne and the childish shouting match that is the House of Commons and decided I needed some light relief.
The background is that a trading friend of mine, Simon has got me interested in Kangaroo tails, a friend of his makes serious money trading these in America. This is the chart pattern that a share makes when it opens and then falls sharply and then partially recovers towards the end of the day. Looking at a chart that shows the open, the close and the day’s high and low (it’s known as the OHLC) you see a tail hanging down below the close, this is the 'kangaroo tail'.
You need to pick a share that's fallen for no obvious reason like bad figures or reported trouble of any kind; you buy at the end of the day to be certain that the price has started recovering from its low point and you only hold for a day or two and scalp a few percentage points of profit. The trick is to set a tight stop and not be greedy with your profit target.
TUI Travel PLC (TUI) suddenly fell 6% yesterday for no obvious reason and then started to recover, thus making a kangaroo tail. So I 'bought' on the spreads at 987p looking to take a quick 20 points profit. This morning I came within a whisker of doing so as the price hit 1006p before falling back, my stop of 973p wasn't hit and the trade is still running.
I can't make up my mind which type of politicians I dislike more, left wing idiots or out of touch posh boys. So Osbourne in his budget has rowed back on the latest attack he'd planned on pensions, as has been widely flagged up in the last couple of weeks. I presume it will be back on the agenda after the EU referendum, deep joy. It would be nice if he left the sensible prudent people who have saved hard and invested wisely in pensions for their old age alone would it not.
So the ISA allowance is going up to £20k a year..........................................well that's welcome. As John Lee (the first person credited with building his ISA to a million pounds) proved, regular savings and intelligent investing can bring huge rewards. The danger we face in the future is that the tax free status of ISA's may come under threat.
I realize that things can't be set in stone forever, but pensions and personal wealth planning rely on long term compounding to get results. Here today gone tomorrow politicians forever moving the goal posts is not helpful and given the parlous state of the public finances the more people who can stand on their own feet the better for the country at large. So Osbourne get your tanks off our lawn and keep them off.
Here today gone tomorrow politicians forever moving the goal posts is not helpful and given the parlous state of the public finances the more people who can stand on their own feet the better for the country at large. So Osbourne get your tanks off our lawn and keep them off.
It’s not easy right now; Mr Market is having one of his twitching fits. What's it all about? Thursday FTSE 100 down 109 points on the latest stupidity from the European Central Bank, Friday up 103 points on....................God only knows what. Unless you've got serious market nous (and I haven't) conditions like this are dangerous, rather than chase things up and down its best to sit tight, perhaps buying something if it looks value and selling the odd thing if it gets overpriced.
As President Reagan once said 'don't just do something, stand there'. I've been doing that for the last few weeks. Took a couple of bits of insurance out, a FTSE short (betting the market will fall) at 6030 with a 400 point stop with a target of 5630 and a couple of long Gold trades. As I write the FTSE bet is crap the Gold trades are looking good.
On Friday I bought into Servoca SVCA a tiny little (£30 million market cap) recruitment company that specialises in the healthcare, education and police sectors. It looks good value to me right now in spite of the fact that it’s gone from 2.3p 3 years ago to 23.75 now (a 10 bagger) so 8353 shares at 23.8p tucked away. It pays a 2% dividend covered 6 times by earnings and whilst I won't bore you with all the metrics, they look great not least the return on capital at 23%.
I've got high hopes for this one over the next five years or so.
Feeling fragile after a late night, so hoping that that hasn't distorted my mind this morning, because if it has, last night will have been monster expensive as I've just made a very fast decision and bought some shares.
Its such a delicate balance between reading a situation correctly and then being decisive, or being an idiot who twitches and presses the buy button having not thought things right through.
In the space of about five minutes I decided to buy £2000 worth of the garage chain Pendragon (PDG) in spite of the fact that they are due to report soon and the directors don't hold as many shares as I would like to see them doing.
However the motor trade looks buoyant to me right now, the recent trading update was positive and I like their figures. Average earnings per share over the last seven years (roughly an economic cycle) are 2.34p. That divided into last nights close of 35.26 is a ratio of 15. To my bloodshot eyes that makes the company looks good
Sunday January 31st. A month of total 'masterly inactivity' ie doing nothing as I didn't (and don't) like the way the market is behaving. Obviously I'm not clever enough to know what will happen over the coming months (and in spite of what most of the pontificating mouths on sticks in the media say they aren't clever enough either) so just about no one has a clue.
But I'm hoping that what's happening is the start of a Bear (falling) market, the Bull (rising) market has run a long time and prices are looking toppy all over the place. Sure, in the short term this will take away some or maybe even most of my profits from last year, but they'll come back and as I'm not fully invested I've cash to spend in 'the sales' if/when they come. I'm avoiding all Oil and Commodity shares like the plague but finding sensibly priced things to buy in other sectors right now is very difficult, so it would be good if prices fell across the board and yields rose as a result.
I'm bored with the total information overload that exists around the markets, however there are some first class articles and ideas on this platform and the attendant magazine and Robbie Burns aka the Naked Trader, Paul Scott from Stockopedia, Terry Smith from Fundsmith, Phil Oakley of Sharescope, Simon Thompson of Investors Chronicle, Lord Lee of Investors Chronicle and Luke Johnson of the Sunday Times are always right on the money with just about everything they say and well worth taking notice of.
Luke Johnson in today's piece in the Sunday Times has as his theme the surest path to success is using other peoples money or OPM for short. That got me thinking about how to use leverage with shares. In the past I've only ever used my spread betting accounts (where you trade usually on a small margin) for very short term trades, often days only. I'm wondering whether in future to use spread betting for longer trades, perhaps as long as a year, in effect 'buying' shares on margin. Sure there is a danger to uncontrolled leverage but I'm confident that I would keep it within sensible limits also there's a carrying cost but again I think that's containable. I plan to run some models and chew the idea over in my mind.
Luke's article at one point talks of the late Greek shipping tycoon Aristotle Onassis who used OPM on a regular basis and had just financed five oil tankers, he was quoted at the time of the deal as saying 'the only time I had to put my hand in my pocket was to scratch my balls'. Leverage is brilliant when you get the timing and the structure right, but you wouldn't want five oil tankers on the strap in todays market me thinks.