ASX Momentum Trade Book - Part 2

[peter2]

EOW 85 update: ASX Momentum Portfolio +38.8% ( 110% invested in 8 trades )
Benchmark index: SPAX2F15 (Incl divs and F credits) +0.0% (past 85wk)

Our portfolio of trades seems to be out of demand this week as the prices drifted lower on low volume. It's very hard to keep a short term equity trade book in the highest demand stocks all the time. We closed a few trades and started others to revitalise our portfolio.

This weeks sells: EMC (+2R), MYX (-0.9R), IMF-cfd (+1.5R with div)

MYX: Sold in this portfolio as it traded at our exit trigger (1.90) on two days.
Personally I'm managing this trade using the weekly charts and my exit trigger is lower.

IMF - Sold this one Friday as the price dropped significantly and the cash was required for a new opportunity.

This weeks buys: RXP, TSN, RAP, NSL, CWY

A few TS's have been raised slightly on some trades with falling prices. This is minor defensive action as our portfolio seems out of favour atm.

BOL: Seems to be lacking a pulse. We've placed a limit sell order itm at 0.130 for half our parcel. This will realise some profit and reduce our open risk in this trade if the order is filled.

 

[peter2]

Trading update: New trade, some exits and a caution.

Our portfolio seems out of sync with what's moving up in the market. Yes, it's frustrating. We'll turnover our trades a little more frequently and see what happens. That means we'll raise our exit triggers a little more aggressively (NSL, CWY). This will see us selling more often for small losses until we get into a few sustained moves higher.

RAP, AMA: Sold this morning as their exits were triggered.

BSE: Bought today's BO-HR at 0.175, iSL is 0.145.



Note: If BO's aren't getting us into the better swings then we'll look at our alternate pull-back setup (1st blue bar off a recent low in a weekly UP trend).

If you're trading these types of setups in the medium term like myself then we have to be patient. It's frustrating seeing our portfolio value going nowhere when there are so many stocks going higher each day. Don't fall into the temptation to try and trade shorter term unless you're a good trader. This thread is all about shorter term trading so it's appropriate for us to turnover trades in this thread in order to get into a better batch.

 

[kid hustlr]

Trading update:

Our portfolio seems out of sync with what's moving up in the market.

So does mine and I'm worried.

 

[Porper]

So does mine and I'm worried.

A lot of companies have taken a decent hit over the past couple of weeks, despite the XJO moving sideways.

More failed breakouts too. It's much more difficult to latch onto trends at the moment. A few good looking a-b-c corrections starting to offer opportunities though.

 

[Joules MM1]

Trading update: ... That means we'll raise our exit triggers a little more aggressively (NSL, CWY). This will see us selling more often for small losses until we get into a few sustained moves higher.

hello, Peter
...do you think you're seeing more offer or just less bid than you would expect to see for your portfolio?

 

[peter2]

Thanks for the comments. This portfolio is not the only one "out of sync" at the moment. Many of us trading ASX stocks will be having a frustrating time. A sideways market has got to be the toughest conditions for a trader and we've got to wait it out.

Most of the selling has been on low volume, what I'd describe as "profit taking" by the very short term traders. Prices have dropped due to lack of bids imo. Knowing this, makes it tempting to hold on through it, but every large loss starts small.

We'll stick to our TP knowing that conditions will change. Increasing our portfolio heat with more open trades is not the way to go as the few winners may not pay for the extra losers.

 

[peter2]

Trading update: New trade and finally closing an old one.

BOL: Finally sold it for 0.125. Missed 0.13 and it took me three days to sell at 0.125. MD is very thin.
This exit is discretionary and it realises a good result ($2884, +4.9R).
Worth keeping an eye on when it trades at 0.13 and above.

A2M: Bought late this arvo at 1.91, iSL 1.78.
Late purchase (one day late) as I wanted to exit BOL trade first. Had to pay extra for late entry.
We'll keep our exit stop close as we only want to be in trades that go higher quickly.

Others I was watching: ZML (thin MD), MGV (missed it)

 

[peter2]

EOW 86 update: ASX Momentum Portfolio +41.0% ( 74% invested in six trades )
Benchmark index: SPAX2F15 (Incl. divs and F credits) -0.1% (past 86 wk)

Our portfolio gained a little this week (+2%) due to renewed demand for a few of our stocks. I'd like to assume that our actions to revitalise the portfolio has started to pay off, otherwise it's due to luck.

This weeks sells: RAP, AMA, BOL, TSN

TSN: Sold on the open (21/10) as part of our revitalisation efforts. TSN was pre-empting a BO that didn't happen. The price was going nowhere and this made it suitable for sale. I hadn't noticed today's news release when I sold.


The revitalisation process is about getting rid of the losers and trades going nowhere especially as this thread is all about trading in stocks that are going up (nobody mention KAR, please).

RAP: Prices rebounded higher after we sold due to our exit being triggered. Happens often and we are not concerned by this.

This weeks buys: A2M

Note: You'll notice that realising the BOL profits has lowered the portfolio heat significantly. Closing losers and raising some exit stops has also helped. The capital risk parameter is now well below our 5% limit and this gives us permission to start more trades next week.

Is it just me or can you see an ascending triangle pattern in our portfolio performance chart. This has got to go higher.

 

[peter2]

Trading update:

RXP: Traded above our +2R sell limit. Trade closed at +2R (+$1320).

This above average result is consistent with our short term trading style.
Personally I'll continue to hold RXP as my exit stop is at BE and the trend looks strong.

Looking for more setups this afternoon.

 

[peter2]

Trading update: Something different, a reversal.

WBA: Bought today at 1.195, iSL is 1.14.
This appeared in yesterday's 10d BO scan and I waited to see if there was any follow up buying. I'd have to call this setup a reversal and we're using the 1st blue bar as the entry.


PS: Please don't tell craft, he may get excited.

 

[peter2]

Trading update: New break-out buy.

FMG: Bought today's BO at 5.25, iSL placed at 4.95.
Classic ascending triangle pattern with a target near 6.00. This provides an acceptable RR.

 

[peter2]

Trading update: Closed trade.

NSL: Price has reversed after the recent break-out. Sold today at 0.034 for a loss (-0.7R, -$478).

 

[jjbinks]

Trading update: New break-out buy.

FMG: Bought today's BO at 5.25, iSL placed at 4.95.
Classic ascending triangle pattern with a target near 6.00. This provides an acceptable RR.

View attachment 68545

Hi peter

Been reading your thread with interest. Trying to keep up.

Would you be able to explain how you worked out the target of $6.

THanks

Jubba

 

[peter2]

Ascending triangle target is calculated by adding the height of the triangle to the break-out level. In this chart of FMG that is 0.86 + 5.20 = 6.06 and I've rounded it to 6.00.

It doesn't mean that price will get there but it's a possibility.



Well Jubba, I hope you continue to enjoy the thread and have learned the importance of having a written trading plan.

 

[peter2]

EOW 87 update: ASX Momentum portfolio +40.0% ( 83% invested in 5 trades )
Benchmark Index: SPAX2F15 (incl divs and F credits) -2.8% (past 87wks)

It was an ugly three days to end the week. The market fell 2.6% this week and our portfolio only -1%. This shows the value of getting into stocks in demand as they tend to fall less than the general market. Our actions to revitalise our portfolio probably saved us a little. The most valuable aspect was taking profits when they were there (those +2R results). We didn't grab all the profits (the +1Rs) and we lost those this week.

While I'm pleased with the performance of this portfolio it's worth mentioning that other portfolios under my management didn't hold their value nearly as well this week. This acknowledges the importance of luck in the short term. If your portfolio was smashed this week then you were either unlucky or you ignored the early warning indications last week. I'll post more about this later.

This weeks sells: RXP (+2R), NSL (-0.7R), A2M (-0.6R)

This weeks buys: WBA, FMG

Outlook: The last 3 day falls took me by surprise. I was getting a little bullish at the start of the week. Doesn't it change quickly. Where to now? I have no idea and I'm pretty pleased that I don't have to know. The market risk is high, so we'll take it easy and manage the open trades that we have. Our portfolio heat is low (3.3%). Prices on a few of our trades bounced of their exit triggers and if prices go back down we'll close them.

A2M: Bounced off its TS, but then went back down to it. Closed next open (Fri).

 

[peter2]

This was an interesting week because it's these types of weeks that test short term traders. Let's review the past two weeks. Reminder: We use the XAO chart to define market risk.



14th Oct: I remarked that our portfolio seems out of demand as many of our trades were drifting lower on low volume. We closed a few trades to grab profits (+2R, -0.9R, +1.5R) and started others to revitalise our portfolio.

[#1] 17th Oct. 1st red bar indicates that market has moved >2 ATR(21) from recent high. This is our early warning that the risk of further market falls is rising. We didn't do anything on that day because we were already aware that our portfolio was "out of sync".

18th Oct: We raised a few exit triggers and closed a few trades as they were hit (small losses).

21st Oct: EOW; Closed four trades during the week and started only one. We were trying to get into stocks that were in demand and this seemed to be working as our portfolio started to go higher.

[#2] 24th Oct: Realised another +2R profit (RXP).
XAO makes a double bottom and this makes it easy to draw a support line. A close below this line would turn the market risk filter to high for this threads porfolio risk filter.

[#3] 26th Oct. Market slammed lower and closed below our "line in the sand". This is our indication to take defensive action, close losing trades and reduce total risk (heat).

On this occasion we didn't need to do anything as we had already noticed that our portfolio was "out of sync" with the market and had started to take action to get "in sync". Grabbing those few +2R results and closing trades going sideways in the prior week pre-empted any action that we would have had to do in response to this weeks change to high risk.

I mentioned that another portfolio I managed got thumped this week. That portfolio is managed with a medium term outlook (weeks - months). One bad week will always whack this portfolio as the portfolio risk is much higher. I'll start defensive action in this portfolio next week.

If you are trading a mixture of time frames (daily, weekly) then make sure you manage each trade properly. Don't let three down days sabotage your management of your medium term trades.

 

[tech/a]

On this occasion we didn't need to do anything as we had already noticed that our portfolio was "out of sync" with the market and had started to take action to get "in sync". Grabbing those few +2R results and closing trades going sideways in the prior week pre-empted any action that we would have had to do in response to this weeks change to high risk.
.

Excellent management Peter.
THIS is never seen let alone explained!

 

[Wysiwyg]

Excellent management Peter.
THIS is never seen let alone explained!

Yes this 'warts and all' is rarely seen. Great long term conservative example. I like too.

 

[peter2]

... Prices on a few of our trades bounced of their exit triggers and if prices go back down we'll close them.

SSM: Price opened below our exit trigger and we had a little slippage selling at 1.10, which is our BE price.
A small loss of commission and interest only.

Today's price bar is interestingly bullish as the close is well above the low on above average volume. No official news, but there must have been something about. If I was an ASX short term trader then this would be a re-buy if it trades at 1.15 tomorrow with a small iSL.

 

[peter2]

Trading update: The market continued lower and we had ample opportunity to close a few trades as price traded back to our exit triggers this afternoon.

CWY: Price traded back down to our exit trigger (1.10) and we sold at this price (loss -0.7R, $435).
FMG: We didn't grab the +1R as we were letting price go higher. Price sold off today with the market and we sold at 5.20 for a small loss (-0.2R, $142).

These break-outs started well but have been caught in the general market selling. Our strategy in this thread is to profit from the short term upwards price movement.

Our remaining open trades are BSE and WBA which have held up OK so far. Our portfolio has quickly reverted to cash as the market falls.

Note: Medium term (weekly), I have not sold these trades as my exit triggers are further away and had not been raised. It is difficult for me managing these examples using different methods. I see this portfolio going quickly to cash and preserving its value, while my own portfolio experiences larger falls. I have to remind myself that I'm not trading a short term strategy.