It looks like the FTSE is taking a right old battering this morning over the euro farce and North Koreas war-mongering. Every single share on my position trading stop out list is showing a drop in price. Which is great news for picking up bargains but not so great for existing open positions!
Thanks to Alan for his comment on the IG £5 per point situation. I am going to email some other firms today to find out if there is a viable alternative to IG when trading AIM shares. In the mean time I will soldier on...
Anyway I didn't think I was going to do any trading today but I have established 3 new positions this morning.
2 new trades in account 1: London Capital Group @102 and Elementis @117.09.
In account 2 I have re-established an old position in Resolution @224.7.
At an 11% difference from the old price that equates to a saving of £25 by having effective stop losses in place. The price is pretty much close to an old support level as well so I'm hoping it will rebound from it, as long as the FTSE pulls out of this slump! The position trading strategy doesn't rely on technical analysis anyway, its just a coincidence really. For more information on this strategy I suggest you pick up a copy of the book over on the right hand side there.
Had 2 stops on account 2 yesterday. 1 closed at a loss, Grainger Trust @91 and one closed for a profit, Thomas Cook @186.8 for an £11 profit. £2 profit overall, not going to make me rich but its money added to the balance.
Happy trading guys and have a good weekend.
Hi again
ReplyDeletefurther to your comment "Part of my trading means I like a slightly larger stop loss on a lower value share.."
Well I agree with that sentiment entirely and, in the right circumstances, you can achieve this with a low value share without undue risk. Let me give a live example on one of my own contracts:
IQE PLC (in which I have 5 open contracts, all at £5/point).
I opened the first contract at a price of 31.73 and placed a stop 5 points below at 26.73. This required a deposit of £25 which is just within my criteria for placing a new bet. I would normally use a stop level of 7-10% of the opening SP which, in this case, would be 2.5 points (approx); however, and in parallel with your own philosophy, I prefer a larger stop loss on a low value share which, as you can see, has been easily achieved - 20% in fact.
This is just one example and it only really works with VERY low value shares. In the case of IQE PLC 4 out of 5 contracts are now in profit and I have managed to 'lock in' about £120 so far. The fifth contract is currently -£5 with a potential loss of £25 (worst case scenario).
Anyway here's to a decent week of trading next week! Bye for now, Alan