Day-trading can be a lonely past-time - which is why I suspect traders love to flit between various internet message boards.
But the problem with that is that bad habits can creep into your trading if you don't have somebody watching over you or making sure you stick to your system.
I can see it in my own trading - I've been losing discipline and been chasing around silly little punts that have cost me a few bucks in the last few days.
I found myself scalping for silly little profits and then tossing them away on speculative positions a few minutes later. Yesterday I did no fewer than 30 trades and went backwards!!!
30 trades is ridiculous and the stupid part of it was that if I had let my first trade run it would have been more profitable than all my other winning trades on the day put together.
Time to step back and get out of the scalping game and get back to fewer but more profitable trades...
... live and learn.
Friday, June 26, 2009
Monday, June 22, 2009
But but but....
A sea of red greets traders today with Asia kicking us off. Had a couple of overnight shorts in place on both the Hang Seng and Nikkei which I've cashed out... Still reckon there is more downside to this leg but nobody ever went broke taking a profit.
The only thing I've got open now is a short on the Dow with a downward trend back in place as the rally fizzles out after the World Bank came out yesterday with some negative comments about future growth potential... which was in contrast to comments attributed to George Soros who said "The worst was behind us"
I am by no means a perma-bear and I think there are some nice value opportunities in the market at the moment - particularly in the South African market - but we need to appreciate how skittish investors are.
The bid by Xstrata for Anglo American gave the local market a bit of a boost but having chatted to a few people I get the sense that the bid is not going to get the support needed and if the "transaction premium" gets yanked out from Anglo then the JSE Top40 could take a smack.
Commodity futures are down as well. I thought there might be a bit more support for gold at 920 and oil at US$68 (particularly after its recent strength) but I guess next areas of interest for me are gold at around US$910 and oil at US$65.
(On that - I noticed an interesting story on Bloomberg about Japanese banks threatening to pull some funding from Venezuelan oil assets in response to non-payment and nationalisation threats... could this be a short term catalyst?)
Down still seems to be the only direction.
The only thing I've got open now is a short on the Dow with a downward trend back in place as the rally fizzles out after the World Bank came out yesterday with some negative comments about future growth potential... which was in contrast to comments attributed to George Soros who said "The worst was behind us"
I am by no means a perma-bear and I think there are some nice value opportunities in the market at the moment - particularly in the South African market - but we need to appreciate how skittish investors are.
The bid by Xstrata for Anglo American gave the local market a bit of a boost but having chatted to a few people I get the sense that the bid is not going to get the support needed and if the "transaction premium" gets yanked out from Anglo then the JSE Top40 could take a smack.
Commodity futures are down as well. I thought there might be a bit more support for gold at 920 and oil at US$68 (particularly after its recent strength) but I guess next areas of interest for me are gold at around US$910 and oil at US$65.
(On that - I noticed an interesting story on Bloomberg about Japanese banks threatening to pull some funding from Venezuelan oil assets in response to non-payment and nationalisation threats... could this be a short term catalyst?)
Down still seems to be the only direction.
Saturday, June 20, 2009
Some fundamental calls
There are no shortage of opportunities to scalp around the commodities but finding deep value investments are a little tougher given the economic outlook.
Markets may have rallied and there may have been some stimulus in the system prompting some improved data but I get the sense we're starting a second downward leg.
Previously on this blog I've mentioned that I like the agriculture and food sectors as good bets over the next year or so. I've had my holdings in Zeder (plus followed the rights issue) and added to my shares in Country Bird Holdings (CBH) on the back of the directors dealings.
Another sector I hadn't given much consideration to was education in South Africa. Specifically private sector education.
Your main listed entry point for education at the moment is via Advtech which owns the Crawford schools. The share has run hard but they have an important area that AdvTech has is scale... You need scale and infrastructure to make a success of education for obvious reasons.
The second unknown entry point which I had only heard about quite recently was through Paladin Capital (a soon to be listed subsidiary of the PSG group). They've apparently got a fairly sizeable investment in a new education player which might be of interest....
** Author holds shares in ZED, CBH, PSG
Markets may have rallied and there may have been some stimulus in the system prompting some improved data but I get the sense we're starting a second downward leg.
Previously on this blog I've mentioned that I like the agriculture and food sectors as good bets over the next year or so. I've had my holdings in Zeder (plus followed the rights issue) and added to my shares in Country Bird Holdings (CBH) on the back of the directors dealings.
Another sector I hadn't given much consideration to was education in South Africa. Specifically private sector education.
Your main listed entry point for education at the moment is via Advtech which owns the Crawford schools. The share has run hard but they have an important area that AdvTech has is scale... You need scale and infrastructure to make a success of education for obvious reasons.
The second unknown entry point which I had only heard about quite recently was through Paladin Capital (a soon to be listed subsidiary of the PSG group). They've apparently got a fairly sizeable investment in a new education player which might be of interest....
** Author holds shares in ZED, CBH, PSG
Tuesday, June 16, 2009
Buy and hold vs day trading
I see there is quite a lot of "industry experts" coming out and saying how 'buy-and-hold' strategies will never work again and day-trading is suddenly where all the wealth is.
There are a lot of people who got toasted in 2008 while watching day-traders make hay while markets were tumbling. The logical answer is that 'buy and hold' no longer works and day-trading must be the way to go....
1. Most people are not cut out to be day-traders. The risk involved and the control involved to manage your own money makes it a highly stressful environment particularly if you are moving in and out of positions regularly.
2. Not all buy-and-hold investments have been poor. Despite this massive financial crisis, the JSE for instance has largely regained everything it lost over October and November 2008 and the dividends, while reduced, are still largely being paid.
3. Making money and keeping money are two completely different concepts that day-traders don't always focus on. Most day-traders will always tell you how they are making money and coining it in the market but if you had to actually drill down into their results you might find that the statistics tell another story. As I have said before on this blog - the question has to be what do you do once you've actually made a profit ....? Do you just gamble it away on the next trade always upping the risk or money down?
For me the strategy has always been to split the profits up and drop some of them into my bigger equity portfolio which largely does have a "buy-and-hold" theme based mentality. Once it is there I'm not likely to dip into it and I pick up the dividends which are subsequently reinvested.
Some of the other profit goes into expanding some of other business interest so that hopefully by the time retirement rolls around I have multiple sources of income with the outperformance being initially driven by the day-trading.
Conclusion
I read a statistic the other day that South Africa has a negative real savings rate. I knew it was bad but didn't realise it was THAT bad...
I don't think the issue should be about whether it is buy-and-hold vs. day trading but rather building up a strategy that lets you build long term wealth with the profits you can generate from day-trading....
Anyway just a thought - use it don't use it
There are a lot of people who got toasted in 2008 while watching day-traders make hay while markets were tumbling. The logical answer is that 'buy and hold' no longer works and day-trading must be the way to go....
1. Most people are not cut out to be day-traders. The risk involved and the control involved to manage your own money makes it a highly stressful environment particularly if you are moving in and out of positions regularly.
2. Not all buy-and-hold investments have been poor. Despite this massive financial crisis, the JSE for instance has largely regained everything it lost over October and November 2008 and the dividends, while reduced, are still largely being paid.
3. Making money and keeping money are two completely different concepts that day-traders don't always focus on. Most day-traders will always tell you how they are making money and coining it in the market but if you had to actually drill down into their results you might find that the statistics tell another story. As I have said before on this blog - the question has to be what do you do once you've actually made a profit ....? Do you just gamble it away on the next trade always upping the risk or money down?
For me the strategy has always been to split the profits up and drop some of them into my bigger equity portfolio which largely does have a "buy-and-hold" theme based mentality. Once it is there I'm not likely to dip into it and I pick up the dividends which are subsequently reinvested.
Some of the other profit goes into expanding some of other business interest so that hopefully by the time retirement rolls around I have multiple sources of income with the outperformance being initially driven by the day-trading.
Conclusion
I read a statistic the other day that South Africa has a negative real savings rate. I knew it was bad but didn't realise it was THAT bad...
I don't think the issue should be about whether it is buy-and-hold vs. day trading but rather building up a strategy that lets you build long term wealth with the profits you can generate from day-trading....
Anyway just a thought - use it don't use it
Risk summed up
Not sure where this is from, but I saw it posted on the Page 88 website and thought it summed up risk 100%
Thursday, June 11, 2009
US markets
The US markets are actually pure and simply kak at the moment.
Lot of confoculating (Howdy Page 88) around the 8700 and 940 levels on the Dow and S&P. It doesn't matter what data comes out the thing just hangs around at these levels.
Out of the mainstream equity markets but taken a small position long on the US 10 year Treasury. Other than that I am out of the market till this thing works itself out
Lot of confoculating (Howdy Page 88) around the 8700 and 940 levels on the Dow and S&P. It doesn't matter what data comes out the thing just hangs around at these levels.
Out of the mainstream equity markets but taken a small position long on the US 10 year Treasury. Other than that I am out of the market till this thing works itself out
Sunday, June 7, 2009
Crazy Friday
Geez how crazy was that Friday?? Enough to drive me to drink - not that I need an excuse of course.
The short platinum and copper trades took a while to get going but eventually they joined the tumble in metals prices and there was a bit of profit for Friday. The job numbers came in bad and NFP reflected the real problems the US is facing - you can massage what you like things aren't great...
The commodities and underlying equity markets took off like a bat outta hell and then suddenly started losing ground with Gold falling to US$955.
I entered a long pozzie on Gold just under US$960 anticipating something of a bounce as some "normality" returned to the market. Gold gyrated around a bit like a stripper at the Lollipop Lounge and just like the pros - promised a lot and delivered bugger all.
Personal feeling - commodities still look toppish and with the job numbers still showing no sign of a turnaround they seem to be looking like we could be about to start a second down-leg (particularly in the base metals and platinum). Gold and Oil still seem to be trading as something of a "risk" proxy.
There is some talk of the dollar starting to strengthen on the back of some prospects of rising interest rates in the US. The problem with interest rates going up is that its going to deaden any of these so called "green-shoots"...
No real conviction for direction tomorrow beyond expecting a bit of a rebound in gold.
The short platinum and copper trades took a while to get going but eventually they joined the tumble in metals prices and there was a bit of profit for Friday. The job numbers came in bad and NFP reflected the real problems the US is facing - you can massage what you like things aren't great...
The commodities and underlying equity markets took off like a bat outta hell and then suddenly started losing ground with Gold falling to US$955.
I entered a long pozzie on Gold just under US$960 anticipating something of a bounce as some "normality" returned to the market. Gold gyrated around a bit like a stripper at the Lollipop Lounge and just like the pros - promised a lot and delivered bugger all.
Personal feeling - commodities still look toppish and with the job numbers still showing no sign of a turnaround they seem to be looking like we could be about to start a second down-leg (particularly in the base metals and platinum). Gold and Oil still seem to be trading as something of a "risk" proxy.
There is some talk of the dollar starting to strengthen on the back of some prospects of rising interest rates in the US. The problem with interest rates going up is that its going to deaden any of these so called "green-shoots"...
No real conviction for direction tomorrow beyond expecting a bit of a rebound in gold.
Friday, June 5, 2009
Hahahah
Bizarre trading day - I'm still trying to catch my breath and survey what worked and what didn't.
I did however come across an article on Moneyweb and found a comment I thought really funny. The article was discussing how you shouldn't let fund managers look after your money (or sort of because it was an interview with a fund manager).
One of the comments underneath the article was:
"Advice from a six year old on the playground - Never let a dog look after your sandwiches - The same applies to managing your money"
Got a good chuckle out of that one. If you want to read the article, you can find it here.
I did however come across an article on Moneyweb and found a comment I thought really funny. The article was discussing how you shouldn't let fund managers look after your money (or sort of because it was an interview with a fund manager).
One of the comments underneath the article was:
"Advice from a six year old on the playground - Never let a dog look after your sandwiches - The same applies to managing your money"
Got a good chuckle out of that one. If you want to read the article, you can find it here.
Thursday, June 4, 2009
Friday trades
Only open trades at the moment are short copper and short platinum which I went into last night...
It all just looks a bit too toppish for me and expecting a bit of a commodities sell-off today.
Drifting in and out of oil at above 69.50 - think this has run a little too hard in the last few days - time for a breather.
Hard to call the markets with the BHP news giving a skew opening to the All Share... Will see..
It all just looks a bit too toppish for me and expecting a bit of a commodities sell-off today.
Drifting in and out of oil at above 69.50 - think this has run a little too hard in the last few days - time for a breather.
Hard to call the markets with the BHP news giving a skew opening to the All Share... Will see..
ALSI Trader
For the technical analysis and SA traders - add this blog to your links:
http://alsi-trader.blogspot.com/
Nice clear and concise blog for a South African context and always nice to bounce ideas off the other traders on this blog as well as the usual suspects from Page 88
http://alsi-trader.blogspot.com/
Nice clear and concise blog for a South African context and always nice to bounce ideas off the other traders on this blog as well as the usual suspects from Page 88
Wednesday, June 3, 2009
Trading tip
Trade with a clear conscience - if you have to get up to 2am to check what your trade is doing then you shouldn`t be in the position in the first place...
Unwound some of the dollar stuff
I have unwound some of the long dollar short yen positions I was in. Felt I was a little over-geared in the short term and there was some profit on the table so it was easier to walk away and try again another day.
Monday, June 1, 2009
Bet on the dollar
If you've been following me on Twitter you'll see I've been plugging my long Dollar | Yen position which has so far yielded some rewards.
The thinking behind this is four-fold.
1. There is the political instability around North Korea which is likely to lead to some volatility in the Asian markets (including presumably the currency markets)
2. As the economy (or more specifically the stock-market) has rebounded, there has been some flight from low yielding but perceived "safe" currencies such as the Yen into the Euro for its higher yield. I argue that the dollar sale has been overdone and in fact offers better value than the Euro.
3. While I still expect another market down-leg, the more the rally takes hold (particularly in the US) the more appetite there will be for the dollar - I don't see the currency alternative at the moment nor do I see something else that carries enough "size".
4. China, Japan and the rest of Asia all want the dollar to be strong relative to their currencies and logically they are not going to try and put some pressure on their own currencies to keep them weak relative to the dollar.
It is not a long term trading position - simply because I think there is too much volatility and earnings uncertainty everywhere but I think while everyone is keeping their eye on the Euro, I think the US dollar offers something a little different.
The thinking behind this is four-fold.
1. There is the political instability around North Korea which is likely to lead to some volatility in the Asian markets (including presumably the currency markets)
2. As the economy (or more specifically the stock-market) has rebounded, there has been some flight from low yielding but perceived "safe" currencies such as the Yen into the Euro for its higher yield. I argue that the dollar sale has been overdone and in fact offers better value than the Euro.
3. While I still expect another market down-leg, the more the rally takes hold (particularly in the US) the more appetite there will be for the dollar - I don't see the currency alternative at the moment nor do I see something else that carries enough "size".
4. China, Japan and the rest of Asia all want the dollar to be strong relative to their currencies and logically they are not going to try and put some pressure on their own currencies to keep them weak relative to the dollar.
It is not a long term trading position - simply because I think there is too much volatility and earnings uncertainty everywhere but I think while everyone is keeping their eye on the Euro, I think the US dollar offers something a little different.
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