Right Place, Right Time - Rising Sell Take Profit Triggers

[tinhat]

I don't get to check the market during the day always. Some days I do but most days I'm busy and don't check the market and my portfolio until after close. If I can I try and check the market a bit after open, such as this morning.

This morning, I checked my portfolio just after 10am and read through a couple of company announcements. I refreshed my portfolio screen to see that the portfolio value had rocketed up! Lo and behold, RCG had jumped up from 0.54 previous day close to 0.695 and there was still an open bid in at that price for about 900 shares. I placed a parcel of 20,000 shares on the market and thought I would see what happens. I managed to sell 18000 at 0.695

Back in January, something similar happened. That time it was GZL. I just so happened to notice there was a bid at $3.10. I had bought for $2 and I managed to get a sell order into the market and sell to the bidder. I subsequently bought back those shares at $2.60 because its in the income portfolio of the SMSF and it is a good dividend payer.

So here are two random events where I have managed to be at the right place at the right time. Given that I don't check the market while it is open all that often it's got me thinking - how to take advantage of unexpected spikes in the share price. Do others have a strategy for capitalising on these? How many long term investors put in rising sell take-profit conditional orders?

I'm wondering how I would manage a rising sell take profit. Assuming that all else is equal (ie, that the share is just trading along as normal) I could, at the beginning of each week, set a take profit rising sell trigger at 30% above last week's closing price.

I would be interested to hear if and what others do to manage rising sell take profit conditional orders.

 

[skc]

There's no easy way to capture those esp because you don't watch the market full time. Leaving a sell order in there hoping to catch a spike would work, but it might work against you sometimes as well... say they announce a profit upgrade and your valuation has risen to 80c on this new information.

That's a small inherent edge of a full time trader against someone who cannot monitor the market ongoingly.

Perhaps one way is to set up some sort of alert that will tell you (via txt) when a company you hold makes an announcement. Then you can scramble to cancel / amend orders as required.

I watched the RCG this morning and well done on picking up the spike. It looked like what I called "work experience student placing order for fund manager" or "tip sheet readers didn't check market depth" type error.

 

[burglar]

... I would be interested to hear if and what others do to manage rising sell take profit conditional orders.

I don't have conditional orders, so need to do it manually.
Naturally, I need to be glued to the screen some of the time.
Not averse to this, luckily.
I spend some time alternating between ASF and the market.

 

[springhill]

There's no easy way to capture those esp because you don't watch the market full time. Leaving a sell order in there hoping to catch a spike would work, but it might work against you sometimes as well... say they announce a profit upgrade and your valuation has risen to 80c on this new information.

That's a small inherent edge of a full time trader against someone who cannot monitor the market ongoingly.

Perhaps one way is to set up some sort of alert that will tell you (via txt) when a company you hold makes an announcement. Then you can scramble to cancel / amend orders as required.

I watched the RCG this morning and well done on picking up the spike. It looked like what I called "work experience student placing order for fund manager" or "tip sheet readers didn't check market depth" type error.

You can also set up a text/email alert for a particular price.

Eg. Buy a stock at 20cps, you set an alert at 30/40/whatever cps. When that price is hit the alert triggers and you log in immediately to take act as you see fit.

 

[sinner]

A few brokers offer SMS alerts and if not you can always program your own with an SMS gateway.

Set SMS alerts based on volatility, i.e. each day after the close update your alerts such that you'll get an SMS if any asset in your portfolio moves > N%.

Assuming you have a smartphone, you should be able to quickly login, evaluate and (if appropriate) exit the position from your phone.

I have this in place for some assets in my portfolio.

EDIT: haha springhill beat me to it.

 

[sammy84]

Interactive brokers phone trading platform allows you to set alerts when a price rise/falls by a certain %. I get an alert when any stock in my portfolio moves by more than 6%.

 

[tinhat]

Thanks for the info everyone. I will set up SMS alerts.