Darkhorse's "REAL MONEY" trading diary (noob friendly haha)

[barney]

Re: Darkhorse's "REAL MONEY" trading diary (noob friendly haha)

Why worry?

Just take a look at QAN yesterday
2.8 billion loss
Rises 8%

80+ million reasons to buy

Up almost another 5% today on substantial volume ....... Stay away from the fan perhaps:fan

 

[darkhorse70]

Re: Darkhorse's "REAL MONEY" trading diary (noob friendly haha)

Agreed tech.

Haha barney, how so u get info on amount of stocks shorted? Is that through your broker?

 

[Sir Osisofliver]

Re: Darkhorse's "REAL MONEY" trading diary (noob friendly haha)

Agreed tech.

Haha barney, how so u get info on amount of stocks shorted? Is that through your broker?

Short positions are required to be reported....

Here's the raw data at ASIC website link

So darkhorse, are you planning to share your methodology?

Cheers

Sir O

 

[darkhorse70]

Re: Darkhorse's "REAL MONEY" trading diary (noob friendly haha)

Thanks sir o.

I wouldn't say I have a concrete methodology. It's more just adopting successful traders rules and methods and ones which have struck a nerve with me. Once I place an actual trade, Ill explain why I selected that stock, how I plan on managing the trade, etc.

I'm going to be much more selective on entering trades. Since my starting capital will be only 11K I don't plan on having any sort of diversification. Hence I'm only going to enter trades which I believe have a lot of factors in my favour at the time. High Risk/Reward ratios.

I plan on targeting well known companies which are still relatively knew in terms of outstanding shares. More so because it has the potential of having greater breakouts or having the opportunity to be 'more' spring loaded for a potential huge run. I don't have the exact figure of the perfect outstanding shares number so its more like comparing it to other stocks. I'm thinking maybe in the 100-300M range.

Being a well known company with a product that the average investor can relate to will allow the stock to have greater volatility. More so focusing on speculative businesses such as TESLA or FACEBOOK/TWITTER.

Another factor will be pricing. Not to expensive nor to cheap. I don't want it to be too cheap as the stock price can be manipulated easier and less chance of institutional investing. On the other hand expensive stocks have less upside potential (not always).

I don't plan on fighting the trend. I plan on riding trends when I get in a position. That may only be days or weeks, depending on my target.

Ill be more detailed on every aspect of my methodology once I put on the trade. These methods are just adopted so I'm just using them as a guide and I'll tweak them to what ratios work best for me through experience.

 

[darkhorse70]

Re: Darkhorse's "REAL MONEY" trading diary (noob friendly haha)

I guess my biggest goal is to find patterns which are yelling out I'm being accumulated by big firms or distributed and just jump on for the ride. Easier said then done though.

Another factor is how the markets are going to possibly affect my trading. Can I survive if the markets turn downwards. How much is purely based on the market carrying me and how much skill do I even have?

 

[barney]

Re: Darkhorse's "REAL MONEY" trading diary (noob friendly haha)

Agreed tech.

Haha barney, how so u get info on amount of stocks shorted? Is that through your broker?

As Sir O mentioned its available via ASIC ..... always makes interesting reading


On the QAN scenario, the data has been updated since I posted. Running a line through it we have ...

Date and number of Shorts held
21st August........ 81,629,927
22nd August........81,845,755
25th August........60,269,731

So there was a bit of covering just prior to the announcements. Its been a good example of why its hard to trade the news.

 

[tech/a]

Re: Darkhorse's "REAL MONEY" trading diary (noob friendly haha)

As Sir O mentioned its available via ASIC ..... always makes interesting reading


On the QAN scenario, the data has been updated since I posted. Running a line through it we have ...

Date and number of Shorts held
21st August........ 81,629,927
22nd August........81,845,755
25th August........60,269,731

So there was a bit of covering just prior to the announcements. Its been a good example of why its hard to trade the news.

Doesn't that say on the 26th go long?

 

[skc]

Re: Darkhorse's "REAL MONEY" trading diary (noob friendly haha)

Doesn't that say on the 26th go long?

The ASIC figures are delayed by 3 days. So the data for 25th isn't available until today unfortunately.

 

[DJG]

Re: Darkhorse's "REAL MONEY" trading diary (noob friendly haha)

One friendly tip: try not to write yourself off by adding 'haha' to your sentences (even your thread title).

This! I strongly advise reading the above again, then again the next day. No offence intended.

Another factor will be pricing. Not to expensive nor to cheap. I don't want it to be too cheap as the stock price can be manipulated easier and less chance of institutional investing. On the other hand expensive stocks have less upside potential (not always).

By "cheap" and "expensive" are you referring to the stock price, or to the state of its intrinsic value? I assume the stock price...

I noticed you also said, you want to "set a goal", either a hard $ figure or preferably eg. 15% return per year. Do you think you have the discipline not to over leverage, or enter a trade you usually wouldn't just in order to achieve that given goal? What if you were showing 10% return for the year with a month to go, and you really wanted that 15%?

Nevertheless, I'll look on with interest.

 

[darkhorse70]

Re: Darkhorse's "REAL MONEY" trading diary (noob friendly haha)

Yea DJG, i meant the price of the stock but every situation/scenario is different. For example even with TESLA trading at around 260$ atm, id still be interested in placing a trade on it. But if I have a bunch of candidates i'd just have to weight the pros/cons of all the stocks then choose the one with the best probability.

Your last point is a good one. I was also thinking, If i did manage to get over my set target early on would I settle for it or try to make as much gains as possible. Just from reading books and stuff I get the impression that there are some really good years where a lot of gains are made and then the market changes and it can be a bad spell of losses or not as much opportunities till you can make a new methodology.

So to sum it up, I don't really know how I'm going to approach that issue. I guess staying solvent for now will be my number 1 priority till I can learn enough. Hence Ill have to keep that in my mind and wait for the right opportunity instead of trying to reach $/% goals.

 

[darkhorse70]

Re: Darkhorse's "REAL MONEY" trading diary (noob friendly haha)

^ The point of the 2nd paragraph was that I should take the trades on because they are good candidates and not because I want to hit $/% targets. I dont want to start being conservative because ive hit my targets and i dont want to overtrade because Ive missed targets.
Easier said than done

 

[darkhorse70]

Re: Darkhorse's "REAL MONEY" trading diary (noob friendly haha)



An update of the simulator trade of seek (sek). At one point I was up around $750 at the close on the initial $12.5k outlay.

Review of the trade

After being stopped out some where around $17.45 I re-entered and moved my stop loss down to $16.65 where it still is at currently. Current price of SEK is at 16.80 or so. So basically all my paper profits vanished to thin air

That being said I didn't want to cut the winner short. I had to go back and read Jesse livermores book. He basically said as long as he was in a profit he could sleep like a baby and that was the houses money he was playing with. Even though I was up around 6/7% and as much as I wanted to cut the trade short I still let it run and believe its the right thing to do.

The pullback was on less than average volume (although ive read stocks don't necessarily need to be accompanied by high volume to collapse). $16.70 and $16 are pivot points (support levels).

I still believe over hanging supply is minimal and was also some what absorbed on the recent up move. Looking at the last 2/3 up moves they bounced off the upward trend line and increased by 30/50%. On that note if the same is to occur this time prices could end up at around $23/26$.

I also believe the general market is at a critical point although its still trending upwards till confirmed other wise.

Overall emotionally I'm trying not to get frustrated at the fact that to lose 6/7% gain is still a big deal and emotionally nerve racking loll.

One last note is that October is around the corner. I'm no expert but Ive heard that October is historically a bad month and the fact that the markets been running up for around 5 years I'd personally just be cautious and could even stay on the side lines.


On another note, sorry for the delay. I should have my live account up and running this week or the next few. That doesn't mean ill be taking on trades. Not till the timing is right.

 

[burglar]

Re: Darkhorse's "REAL MONEY" trading diary (noob friendly haha)

... Ive heard that October is historically a bad month ...

“October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” Mark Twain

 

[rb250660]

Re: Darkhorse's "REAL MONEY" trading diary (noob friendly haha)

A few comments.

After being stopped out some where around $17.45 I re-entered and moved my stop loss down to $16.65 where it still is at currently. Current price of SEK is at 16.80 or so. So basically all my paper profits vanished to thin air

Never move your stop down.

That being said I didn't want to cut the winner short. I had to go back and read Jesse livermores book. He basically said as long as he was in a profit he could sleep like a baby and that was the houses money he was playing with. Even though I was up around 6/7% and as much as I wanted to cut the trade short I still let it run and believe its the right thing to do.

Sleep well at night? What happens when it gaps down 80% over night like NEN and PBT earlier this year. My point is you aren't safe from over night gaps and the longer you hold the more risk you are taking on through exposure to adverse news and market conditions amongst others.

I still believe over hanging supply is minimal and was also some what absorbed on the recent up move. Looking at the last 2/3 up moves they bounced off the upward trend line and increased by 30/50%. On that note if the same is to occur this time prices could end up at around $23/26$.

What trend line? It's basing, either being accumulated or more likely distributed after a gap up. Keep it simple, buy higher highs and higher lows. Sell lower highs and lower lows.
You're only guessing about a further magnitude of move up too.
Also watch out for the gap to backfill. Look at IOH.

SEK looks like it could provide some great swing trading opportunities. Ranging between 16 and 17 odd. Good support at 16.

Keep putting in the hard yards mate, it's worth it when you 'get it'.

 

[darkhorse70]

Re: Darkhorse's "REAL MONEY" trading diary (noob friendly haha)

Haha burglar that made me crack up. Ill have to steal that quote.

Rb25, my impression of moving your stop loss down applies when you keep moving it down so you dont get stopped out. I got stopped out, re assesed the situation and got back in. I only moved the stop loss down to a more significant level, so I dont get stopped out u necessarily. However im still figuring out the stop loss stuff and am experimenting with other peoples advice etc.

Hopefully my stop loss could get triggered and I could take minmal damage if it gapped overnight. I tried the intra day trading style but it drove me insane. To much concetration and emotional control is needed for small gains ( it could add up to alot though). I try to choose stocks that arent 'too' wild but things happen. Id play very defensively at the entry of the trade and once in profit be a bit more laid back.

If you go back to the previous page I put up a photo of the longer term uptrend line. Its actually a near image of teslas uptrend line/pattern. Its approaching its trendline and will collide with it by october 14 at this price. The 2 previous times it did so it jumped 30/50%. My only concern is, is this stock over extended and is it being distributed. I havent seen any sort of unusual volume to suggest so but it might be done slower so hard to say.

By the way im not arguing with you, just discussing. Thanks for the feedback. Appreciated.

 

[darkhorse70]

Re: Darkhorse's "REAL MONEY" trading diary (noob friendly haha)

Its time for me to open a brokerage account. I know theres tonnes of info on the site regarding this but can any one point me in a reasonable direction regarding a good broker.

My main concern is the fees. I really want to get in tye american equities market so if I can get some thing with low fees then it gives me a bit of an upper hand. Im going to be really selective about the traes I enter so hopefully my win/loss rate will be highER...

Also any advice regarding structure of the business. Should I trade as a business or just as an individual. Obviously its going to take a while before I can earn anything to even be taxed. My consensus is to create a company so my personal income isnt included hence ill be taxed potential profits? I plan on re investing every penny which I generate for a decade. Harder said than done but with my calculations if I add 20k per year it will be around 3/4years before I even reach the first tax bracket.

Any thoughts?

Thanks

 

[CanOz]

Re: Darkhorse's "REAL MONEY" trading diary (noob friendly haha)

Its time for me to open a brokerage account. I know theres tonnes of info on the site regarding this but can any one point me in a reasonable direction regarding a good broker.

My main concern is the fees. I really want to get in tye american equities market so if I can get some thing with low fees then it gives me a bit of an upper hand. Im going to be really selective about the traes I enter so hopefully my win/loss rate will be highER...

Also any advice regarding structure of the business. Should I trade as a business or just as an individual. Obviously its going to take a while before I can earn anything to even be taxed. My consensus is to create a company so my personal income isnt included hence ill be taxed potential profits? I plan on re investing every penny which I generate for a decade. Harder said than done but with my calculations if I add 20k per year it will be around 3/4years before I even reach the first tax bracket.

Any thoughts?

Thanks

Interactive Brokers

You can short most US stocks, hope you can learn how to do that, you might need it soon

 

[rb250660]

Re: Darkhorse's "REAL MONEY" trading diary (noob friendly haha)

Any thoughts?
Thanks

If you set up a company you will probably need the services of an accountant to do it, not sure what the fees are but I reckon you wouldn't get much change from a grand or two. Then there's the annual tax return for it (and I think ASIC compliance guff) and your own annual tax return too. Probably another grand a year.

You'll pay a flat 30% tax on any profits. So by my rough calculations you'll need to make around $180,000pa for a company structure to be superior to a personal taxation setup.

http://calculators.ato.gov.au/scripts/axos/axos.asp?CONTEXT=&KBS=ctax2014.xr4&go=ok

This is not financial advice but merely my own thoughts.


As for brokers, I use CMC but I only trade ASX equities.

 

[darkhorse70]

Re: Darkhorse's "REAL MONEY" trading diary (noob friendly haha)

Thanks Canoz, that's what I was looking at. Will have to go through the website properly tomorrow. Lol, im pretty sceptical about the market conditions right now. Just going to wait on the side lines till I feel more confident about a setup plus overall market. Actually TSLA (TESLA) is right near its long term upward trend line but I feel its to risky/volatile.

I want to start on a positive note so I don't have as 'MUCH' emotional baggage at the start.


Thanks rb25, your points are true. My aunty is an accountant but she said shed charge me for her service (shes Asian so her mentality is probably different to mine haha). I guess setting up an company is out of the picture for the mean time.

Thanks for the feedback guys

 

[John Swift]

Re: Darkhorse's "REAL MONEY" trading diary (noob friendly haha)

I do some of my trading through a company. The cost for setup is a couple of hundred dollars. The cost for ongoing maintenance is about $500 a year, including accounting fees.

The tax isn't such a big issue. Remembering you can pay yourself a reasonable wage (tax deductible) or franked dividends, it's not really true that it only becomes a benefit after $180k... Aside from the fixed costs for setup, it can be basically the same as an individual up until the end of the 30% bracket when it starts to be more beneficial. This is my understanding, anyway.

My setup is a little more complex than that, but the company is part of a trust structure, which affords even better tax planning avenues for if you have a family. Worthwhile talking to your accountant about it all, actually.