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| Tuesday, July 31, 2007 |
| 31st July 2007 update |
Today isn't a good day for me, all my holdings are down. I've decided to post my analysis and hopefully get something out of it.
Tiongwoon.
Trend
5d EMA has crossed the 26d EMA with the 12d EMA going closer to crossing the 26dEMA. Sell trigger is on situations whereby 12d EMA crosses the 26d EMA. Trend at the moment dont look good as it seems to be reversing soon or going through a possible long consolidation phase. One positive to note is that the volume transacted since May 2007 has been decreasing till today. With lesser volume, it could be interpreted that a breakout might be imminent.
I feel reversal can be observed tomorrow, even though it might be a weak one due to macro issues. Consolidation phase might be over soon due to diminishing volumes. The only issue is that the MAs might crossover, triggering my sell signal.
Momentum
Looking quite awful and it should be the same for the majority of stocks. It showed indication of a pullback last Thursday before the selldown on Friday. There might be a possibility that contra players at this point burnt themselves with today being the "Force Selling" day. Judging from momentum, it does not seem to be over yet.
Market Strength
The MFI shows that it is falling and there are no indication of a turnaround.
Overall Verdict
Trend looks ok, even though it is close to selling signal. One thing to take comfort is from the decreasing volume since May. Momentum and Market is strength is understandably weak due to uncertainty in global markets. I will hold till tomorrow at least before making any decisions.
OKP
Trend
Since mid-July, it has already begun its consolidation state, so there is nothing much to worry about. Again, thinning of volume traded can be observed. This shows that not much shares are changing hands. This might mean that no one is willing to sell, at least at this low price. I have no idea when this consolidation will end, but I am quite confident that this trend will remain intact.
Momentum
Awful looking, but its within expectation
Market Strength
The MFI shows that it is falling and there are no indication of a turnaround.
Overall Verdict
Everything regarding OKP(technicals) is still looking healthy. A consolidation/correction is essential so that shares fall in longer term investors. More people holding means lesser shares available to change hands. This will lead to higher demand and thus push the price further up.
FerroChina
Trend
The gap down is slightly worrisome. Trends are still intact even though like TW, the 5d EMA has cut the 12d EMA. Volume seems to be high these few days and it seems worrisome as well. Longer term trends still look ok and it will resume its upward movement soon.
Momentum
Turned bad recently and this might be the beginning.
Market Strength
The MFI has reached 50% even though 1 positive point is that it is not falling as sharply as previous days. It might have reached the bottom of the "selling"
Overall Verdict
Good long term trends, lousy short term ones. Heavy selling recently doesn't help its cause. Momentum just turned sour, with market strength reaching 50% mark. This might mean that I entered at the beginning of consolidation but it might be recovering due to neutral movement of MFI. I shall just wait and see.
ChinaAOil
Trend
Good uptrend overall, even though it is consolidating now.
Momentum
Maybe its due to macro conditions, but the full wave of the momentum is getting smaller and smaller. A bigger correction in CAO might be coming soon.
Market Strength
Being below 50%, it is in a more oversold territory. Its MFI movement is rather sideways, thus might mean that it might be reversing up.
Overall Verdict
Absolutely beautiful trend. However, as each increase in price is getting smaller, it can be deduced (my own guess) that a correction of a bigger magnitude for CAO might be coming soon. Maybe, it can touch $2. 70. and maybe at that point, my selling signal will trigger and I can liquidate this position.
BrightWorld
Trend
Good uptrend, this is one stock that my entry point is near the ideal point, thus capturing the whole "meat" of the trend. At the moment, trend still looks healthy. Volume still decreasing and my guess is accumulation is still in progress.
Momentum
The mini-bull run of this stock recently is going to come to an end soon. Afterwhich we might observe a period of consolidation.
Market Strength
Suprisingly, the MFI has beeen increasing and has hit 80%. If it manages to hit 80%, it will continue to surge up till the point its overbought.
Overall Verdict
Good trend on decreasing volume. Price might surge sooner rather than later and it is further supported by the MFI. MACD however is indicating that momentum has waned. Again, momentum might not be a good indicator now as most stocks have high selling momentum now.
Seksun
Trend
Catching it at the point after its surge at the end of a consolidation, it is always risky if I'm too late into the trend. Volume shows no indication of investors holding on and it can go either way, even though longer trend is healthy.
Momentum
Quite weak. Might be affected by the market on the whole.
Market Strength
MFI turned south, most prob due to the overal market sentiment.
Overall Verdict
Healthy trends but volume exchanged does not indicate well enough that it should go higher up. This view is reinforced by MFI, which is turning south and MACD, which is cutting the signal line soon. All I can say is that it is a good trending stock which is suppressed by negative market sentiments.
BioTreat
Trend
Re-entered due as it triggered my buying signal. Like Brightworld, this is my 2nd stock that I have entered based on my buying signal. Most of the stocks I have entered are rather late into the trend. Volume spike on 30th might be an indication of distribution. That's not good news if it happens so early in a reversal.
Momentum
Unfazed by the global selloff, it has good buying momentum.
Market Strength
MFI supports the whole uptrend as it approaches upwards towards the 80% mark.
Overall Verdict
Trend reversal plus breakout, even though the volume spike does make me cast my doubts. Hopefully its not those contra players as they will definitely inducce huge selling (thus pressing down the price) if things don't go their way.
Phew... finally, I'm done.. hopefully I wont be posting about my holdings tomorrow (this means that I'm not selling anything)Labels: Bio Treat, BrightWorld, ChinaAviationOil, FerroChina, OKP, Seksun, TiongWoon |
posted by Nenix @ 9:07 PM   |
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| Pennies Down |
Seems like its pennies again. similar to the price shock 2 weeks ago. Wonder whats going on now? Seems like they are really trying to shake off the weak-hearted. I guess tonight when I reach home, Ferrochina's mid-term indicators might be hit. And if it does hit, I guess this will be a very bad month for me.
Positives is that I am still very calm now despite whats going on. Heh, so many up downs have made me quite numb already. The thing is to try to see the bigger picture. Will update again after going through the technicals today.
P.S to those who are starting to invest soon, my suggestion is to wait for the tide to turn first.
P.P.S After reading some SI forum threads, I think its because of forced selling. 18th July is the period of price shock. Market then seems to recover on 23rd. Most might be going into contra positions again. And today is the due for force selling. Well, its just talk, but if its due to forced selling, then its understand. |
| posted by Nenix @ 4:44 PM |
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| Monday, July 30, 2007 |
| The purpose of CFDs |
Recently I have been reading lots of books that tells us which are the important things to look out for in building a trading system. I realise that the role of CFD has somewhat changed. In the past, I used CFD as a short term trading instrument to magnify my gains but tracking short term movements is never easy as you can see from the price shock a fortnight ago and the recent corrections. Furthermore, pyramiding strategies might erode profits as the returns per unit risk gets lower and lower each time, even though it can be argued that the peak could be much higher.
Entry points will still be determined by simple MA crossovers, assuming that its mid-term indicators are indicating an uptrend. Breakouts should be taken into considerations as well.
Re-entry positions will be determined by it hitting the crossover lines. This can be treated as a "cross-over"when it bounces back up. The assumption is that weekly/monthly indicators are up as well.
P.S Today is an interesting day, after I screened my stocks today, I think I could forsee some uptrends.
So the problem comes in. What role does CFD play? Next time when I'm working, short term will not be the right answer. So I guess it will have the exact same role as my normal funds, only thing is that its risk and returns per unit cost is magnified, thus position sizing has to be looked after.Labels: NenixDreams Fund |
| posted by Nenix @ 6:03 PM |
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| Don't be too happy, Correction might not be over |
This time round correction seems to be rather short. On of the possible reasons is that during the price shock 2 wednesdays ago, most weak holders are already flushed out (this includes some of my holdings. haha) Thus this time round there aren't much weak holders to begin with. However, today might just be a technical rebound, thus it might not be over soon. Contra deadlines still not up since thursday, and they might cover as soon as it recovers for breakeven or small losses. This increased selling of the contras might push the market down again.
Nonetheless, most of the stocks are well supported at the moment, despite the drop, it is still within healthy range. But there is always this probability of uncertainty hanging around. So be careful. For me, I still have some cash available for bargain hunting, even though personally, i hope the price will just go up. For me, I dont mind buying at a premium because, this is the price to pay for higher certainty |
| posted by Nenix @ 11:09 AM |
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| Friday, July 27, 2007 |
| BioTreat and OKP |
Technical indicators are giving a buy signal. Loaded some biotreat@ 0.930
Loaded some okp using CFD @ 0.93 with view that mid-term trend is still very much intact.Labels: Bio Treat, OKP |
| posted by Nenix @ 2:00 PM |
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| Sea of Red |
| Sea of Red today. Losses aplenty. but somehow, I'm not feeling down. Maybe I've learned through experience, maybe I have faith in my system, but somehow, this is an opportunity to fish for stocks IF it does not break the trend line. Stretching my time horizon to a longer period, corrections would just be part of the consolidation period and thus might be just part of the uptrend. Of cos, it could always be the turn of the bull and my cut loss would be higher if that's the case but that's the price to pay Labels: NenixDreams Fund |
| posted by Nenix @ 9:32 AM |
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| Thursday, July 26, 2007 |
| The illogical player |
People tend to gamble when things are going bad and settle for certainty when things are going well. This totally contradicts on the "cut your losses, and let your profits run" axiom.
For example.
Lets say for this scenario, you have 2 choices
A: A certain 9k loss.
B: A 5% chance of no loss and a 95% chance of losing 10k.
Most people would take the chance for breakeven but this is not cutting loss. Why is this so?
For situation B, the expectation is a (0.05 * 0 + 0.95* 10) 9.5k loss. In this case, the hoping of prices to bounce to breakeven causes your losses to be magnified. The logical player should just choose the certain 9k loss, admit the wrong trade/investment, analyze what went wrong, and then move on.
Lets switch the scenario. Again you have 2 choices
A: A certain 9k gain.
B: A 5% chance of no gain and a 95% chance of earning 10k.
Same concept but you would be surprised most would settle for the 9k. This is not an example of riding the profits. If you do the calculations, expection of B is a 9.5k gain and by doing this, you are not riding the profits enough.
In the end once you could quantify your risks and expected returns, your accuracy of selection, you should be able to be a more logical player. For my case, risks are well definied as it is triggered by cut loss. For gains, I am not sure of the targetted price. This is a drawdown of trend following.Labels: NenixDreams Fund |
| posted by Nenix @ 11:31 AM |
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| Improvements still needed |
Well, maybe its me, but I just feel that my position sizing is not very good. For example, I bought too much Ferrochina recently. I'm lucky that it rises, but fact is, as a technical trader, you enter trades with higher probability. This means that I'm more often that not wrong (assumption). Poor position sizing leads to doom, be it investor or trader.
Hmm.. I'm kinda unsatisfied with my performance recently. My losses are slightly more magnified than expected. Short term trades causes slippages and more transaction costs leading to less profits. Returns per unit cost on average although good but still not what I expect. Stocks picking hasn't been good as I have missed out some breakouts. I must understand that, a trend trader just needs a few good trades to make a profitable year. But right now, I don't think I'm doing enough.
Simulations have been done to prepare myself for worst cases but I did not realise that stocks in different categories tend to react differently (uptrend and quiet, uptrend and volatile, sideways and quiet, sideways and volatile, downtrend and quiet, downtrend and volatile). I did not cater test cases for price shocks and what indicators are there to determine the difference between them.
All in all, I think if I were to grade myself, it would probably be a 55/100. Profitable returns should be considered but its because of the bull run. Furthermore, this project has been way overdue. I have not filled in the data (laziness and procrastination), I have not automated my stuff. Alright, I guess ps3 has to wait, at least till I finish these important stuff. Wanted to get it this weekend but guess I'm getting a little complacent now.
Hopefully, this will give me a good slap to push myself further. Of cos, my networth now has effectly doubled since my first day of investing and I'm feeling good, but this is a project till 40. And I'm not even near there yet, whether in terms of age, or of my ultimate goal of 1 million.
Thus, I should work harder now, maybe I should only play games on weekends only. But I'm 24 and I have 16 years left to reach my goal. I think it's not that difficult if I save properly and put in more money for investment.
Now my investment portfolio is boosted due to investment from friends and family at about 5% p.a, non compounding. I must however take into consideration that market becomes stale (neither bear or bull). This is when I will be badly hit. If time permits, I think I need to analyze foriegn markets so that I can capture trends on other markets as well.Labels: NenixDreams Fund |
| posted by Nenix @ 9:45 AM |
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| Wednesday, July 25, 2007 |
| Seksun |
Today's selldown affected quite a bit of volatile stocks. However, one counter Seksun, has not undergone mass selling. Infact, it is selling at $0.70 at the moment.
How I see Seksun:
- It's a "quiet and trending stock". I personally prefer such counters as it does not whipsaw violently, and thus hitting my trigger.
- It's short term indicators are healthy. This gives me an indication to go in and build my initial position
- Weekly indicators are showing slight retracement. Whether it is a reversal is still unknown but it does show that it might be a good price to enter
- Weekly trends are stable.
Entered small "test water" amount at $0.70 Labels: Seksun |
| posted by Nenix @ 9:24 AM |
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| Tuesday, July 24, 2007 |
| Why did it rise now? |
I was preparing to get some for short term CFDs this coming friday, but it got ahead of time. Man.... while indicators are looking good, it just shot up before it even recovers fully.. Seems like I have to wait again
PS. I guess its never too high a price BUT you need to weigh the returns-to-risk. At the moment, my total risk is a bit stretched and adding CFD positions would be a receipe for disaster. Maybe I should be glad that I didn't act on impulse. Guess I could only add more positions when I have more cash. So I'll have to hang on nowLabels: ChinaAviationOil |
| posted by Nenix @ 9:59 AM |
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| Monday, July 23, 2007 |
| BrightWorld |
Loaded some more at $0.69 for middle-term horizon. Not suitable for short-term at the moment as momentum isn't there. Need to do more analysis before I can determine if short-term is possible.
I seriously need to shift to longer perspective because when I work fulltime, the only time I can commit would most probably be done on EOD data. Maybe I even have to shift CFD to the my current mid-term horizon (few months). Oh well.... guess its more ground work then.
Things to do at the moment:
- Add in some middle-horizon indicators for my templates
- Write out my objectives, risk/return analysis and prefered time-frame and stick to it
- Populate all the data, revising most of the things I have done and keep a proper record.
- Should use % Cost in portfolio instead of % value.
- *Finish my PS2 games before school starts so I can get my PS3. haha*Labels: BrightWorld |
| posted by Nenix @ 10:25 AM |
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| Random Thoughts #9 |
Excellent short-term traders would most probably earn much more than other forms of investors, but the price is high. You must monitor it consistently, you must have good emotion management and lastly, you must be disciplined. However, one of the possible drawdowns is that in a short term cycle, gains are limited as short term cycles usually dont last long. Losses are small though as cut loss is based on short term indicators. However, one can be "faked out" as indicators will most probably be hit once correction ensues.
For the mid-term however, corrections will just be part of the consolidation cycle. Risks are higher as cut loss targets are larger, but gains are not limited because it will not hit the cut loss in event of corrections.
I'm just thinking, maybe i should shift the cash trades to a longer midterm. This will make me capture most of the trend. The CFD should still be short term as risks-to-returns might be too high to hold. I shall look into the CFD issue then. Right now, I'm kinda tired (mentally) from designing this system. Too many things to look out for. But I guess its all for a better tomorrow.Labels: Random thoughts |
| posted by Nenix @ 9:51 AM |
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| Friday, July 20, 2007 |
| 20th July 2007 Update |
 This week is considered a bad week for me. The shakeup obviously took a toll on me triggering most of the cut loss limits. My weaker stocks like AsiaEnv, MiddleEast, MapleTreeLog were all near exit points before the stocks fell on Wednesday. This shakeup just made the decision more decisive, even though if I had exited earlier, a sizeable amount of loss will be minimized. Soilbuild and CreativeMaster were the ones that were triggered due to huge falls. Like mentioned, the initial entry is a 'test water' sort of entry and it's still under observation whether it should be converted to be a base stock (mid-term horizon). Trends look good when I entered though. Yesterday(Thursday), I loaded base positions for TiongWoon, OKP, and Ferrochina, whereby among most stocks, OKP seems to be the more promising one, which I might load more base positions. The reason why base positions are required is that I will be eligible for rights. CFD do not cater to rights and thus liquidation have to be done. Anyway, I also decided against the idea of mixing the costs of contracts. Obviously, CFDs are different from Cash contracts and they have to be seperated. And for the CFD contracts, I will be using the FIFO (First-in-first-out) calculation method. If I cost average the CFD contracts and then sell partially, it will make accounting for CFD contracts more difficult. A side note, even though my current CFD holdings are in the red, notice that the overall value of cfd has increased over 10%. This is because of the FIFO method. For example, after covering some of the OKP contracts, the only remaining is those that I bought at $1.01. this makes a difference of -0.35 loss. I will look in depth on my holdings tomorrow night and then start populating data for my new templates for my system. Sadly speaking, I'm still using the beta version and thus buying positions are a bit off as I am estimating at the moment. Hopefully, picture becomes clearer. Have a good weekend. Labels: NenixDreams Fund |
| posted by Nenix @ 10:57 PM |
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| As strange as it might be.. |
A few days after closing most positions, I am now starting to load positions again. As strange as it might be, this is how this system works: Liquidation for capital preservation in shakeups and the join in again when the climb begins again. My thinking is that, no one can guarantee how long the market will fall and sometimes, if we wait till things are clear enough, it might be a bit too late. More often than not, it takes one mistake to wipe out all your gains. Maybe when I'm older and wiser, I will be able to see the markets clearly but for now, I'm just a novice.
Anyway, this shakeup does force me to liquidate the weaker stocks (AsiaEnv, MiddleEast, MapleTreeLog). Soilbuild is the only that clearly triggers the cut loss.
Back to purpose of this topic:
After building the base for mid-term stocks, I've went on with the next phase which is to accumulate for shorter term horizons (using CFD).
Loaded FerroChina @ $2.70
Loaded OKP @ $0.975
Loaded TiongWoon @ $1.15
I think to make things less complicated, I shall not cost average cash and cfd accounts since costs for both are significantly different.Labels: FerroChina, OKP, TiongWoon |
| posted by Nenix @ 10:19 AM |
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| Thursday, July 19, 2007 |
| Mid-term horizon |
Loaded some stocks for the middle-term horizon now that I have available cash.
Currently my base stocks consists of CAO, BrightWorld and the almost written of MDR.
Today, I've added to this base of mid-term stocks by buying TiongWoon @ $1.08, OKP @ 0.94 and FerroChina @ $2.63. Risks for calculating mid-term stocks are more difficult from a technical standpoint as I cannot rely on short term cut-loss triggers. Maybe weekly indicators will solve this issue, will analyze more data before coming to a decision. But I feel weekly data should suffice as corrections seldom lasts more than 1 month. 3 consecutive down weeks might indicate a reversal but its MA might not be affected much.Labels: FerroChina, OKP, TiongWoon |
| posted by Nenix @ 9:28 PM |
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| Drawdown on NTS |
While this system of trading fully capitalises on an extended run (bull or bear), it suffers tremendously from corrections. Shakeups like this triggers all the exit. However, I have tried to limit this shakeup by holding on to base units (units that are longer term in nature).
At the moment, base shares are ChinaAOil, BrightWorld, OKP(CFD), TiongWoon(CFD). I have the intention to use the cash for OKP and TiongWoon for longer term perspective.Labels: NenixDreams Fund |
| posted by Nenix @ 9:30 AM |
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| Wednesday, July 18, 2007 |
| Losses |
So much to write today. Today, i suffered a huge loss. Maybe larger than the February correction.
I will start with the CFD components-
Rotary: Bought more at $1.45 cost averaging to $1.44. Sold during the cut loss trigger of $1.36 at about -27.77%
OKP: Sold the short term components at $0.98 and $0.88 with cost average at $0.84. A result of 63.49% profit is reached.
TiongWoon: Sold short term components at $1.12 and $1.05 with cost average at $1.086. A result of 7.596%
Touching on the Cash components-
AsiaEnv: One of the weak stocks I wanted to exit as it is so close to my exit signal. Bought on an average of $0.84 while I sell it at a price of $0.835 resulting a -0.595%
MiddleEastD: Another one of the weak stocks that was near my exit signal. Bought on an average of $0.387 and sold at $0.37 at a -4.39% loss
Soilbuild: This stock hit my cut loss limit at 1.61. Bought at 1.78. Exceeded my cut loss limit. Sold at a -9.55% loss
MapleTreeLog: It once touched my cut loss limit at 1.40. But decided to hold as it is recovering. Breached further and thus cut loss at 1.37 at a -6.8% loss
CreativeMast: Least expected to breach but it happened. Cut loss at 0.23 when I bought at 0.265 at a loss of -13.2%
Overall, my portfolio has reduced from $1.74 to $1.58, resulting in a 9.195% decrease. Like I mentioned, this will be the worst case scenario even though I still have holdings. One of the reasons that it is worse than estimations is because of difficulty in selling some of my shares. I have catered to a 15% risk at max and I am quite sure that it won't exceed this limit.
My remaining shares are base shares and it will be kept for middle-term. So short term cut losses will not apply to these shares. I will only trigger a sell if it crosses my mid-term signal.
For CAO, it still has short-term holdings. This is because, at the point of buying CAO, i did not have a system of allocation. However, it has not hit short term exit points. An exit will take place at around $2.69 for the short term holdings.
Labels: AsiaEnv, CreativeMast, MapleTreeLog, MiddleEastD, OKP, Rotary, Soilbuild, TiongWoon |
| posted by Nenix @ 8:42 PM |
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| POEMS system sucks |
Well, Today, as most will know, has been quite a frenzy. Received numerous low alerts, thus I liquidated most of my stocks unfortunately, at a loss. But what pisses me off is this. The POEMS system really sucks. I queued to sell at the buying price. So why not process it immediately? Its understandable if it's still falling but that's not the case.
My mapleTreeLog was submitted at 16:06pm only to be executed at 16:35pm. My AsiaEnv was submitted at 16:09 only to be reported at 17:28pm. The reason I signed up for POEMS is for the supposed convenience. And now, at the time of writing, which is 17:44 Singapore time, the order i submitted for MiddleEastD at 16:48 has not be reported.. This is pissing me off big time.
I guess, in the end, it is my brokers (POEMS and amFraser) that helped me. Technology always seem to fail you at the most important time.
I will update my transactions when I reach home today. Similar to Febrauary correction, I've liquidated most stocks, but like I mentioned in my posts earlier, I kept the base of most stocks that still holds the trend.
NB: POEMS finally reported the MiddleEastD at 17:52. Brilliant.. And, I guess if this carries on, we will be seeing contra-players-turn-bankrupt news on papers and tv soon. |
| posted by Nenix @ 5:31 PM |
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| Random Thoughts #8 |
Just thought that I should remind myself on this one. If I'm a middle term trader, then I must stay within that time frame, especially for the base units I am holding. I must remember that my holdings are generally divided into two portions, the base units (which I will generally hold for many months) and the shorter term portions (which I will hold for generally few weeks). I must never get confused which is the base units, and which are the speculative units.
For shorter horizons, it is usually more straightforward with entry and exit signals. However, for middle-horizon stocks, more often than not, my judgement gets clouded by short term signals. This is my major flaw and I must look past it. That is why a system is needed to guide me, because I know that I might not be emotionally suited for trading/investing.
Afterall, investing/trading is all about betting on your beliefs on the market.Labels: Random thoughts |
| posted by Nenix @ 10:43 AM |
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| Rotary Loaded |
| Loaded the short term positions at $1.45 averaging my overall cost to $1.4433. This time round I will no longer make unforced errors. I must be more disciplined. Labels: Rotary |
| posted by Nenix @ 9:11 AM |
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| Tuesday, July 17, 2007 |
| Price to pay for not following my rules |
Remember last time i mentioned when I unloaded Rotary? I unloaded because of the short term weakness. Unloading is the right move but not all of them. Thus today, I loaded back some at $1.43, a premium of $0.23 when I last sold it at $1.20.
Lessoned Learned: Prices go up and down, and after a lengthy bull run, long periods of consolidation is expected. As long as trends of longer horizons are intact, it should be assumed that it will continue to trend upwards.
And .. ouch.. 23 cents premium is a high price to pay.
On the portfolio as a whole, the overall max risk that I bear have exceeded my level even though manageable risk are still within safety limits. Will have to see how it goes.Labels: Rotary |
| posted by Nenix @ 9:36 AM |
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| Monday, July 16, 2007 |
| AsiaEnv, MapleTreeLog update |
Like stated, these two stocks are rather weak at them moment and they have now touched my trigger point to sell. But however, like all stocks, prices always move up and down. So I was thinking, if I tweak my system to a longer-time frame, I would not be "faked" by signals to sell.
So the process goes something like this.
Buying signals
-> fulfill long term requirements
-> Fulfill short term requirements (an attempt to enter at a good price even though if its longer term, it does not really matter)
Exit signals
-> Risk is calculated should be tagged to the price when you purchase. Lets say, if I buy CAO at $1.88 cost price, the cut loss should be fixed at around $1.69. This is different from in the past whereby the cut loss moves with the closing price.
-> Cut loss should be performed when there is a sudden drop in price in a day or if it hits the set cut loss target during purchase.
-> Short term exit signals are warning signals. The ultra short term signal will be an indication to clear all leveraged positions. As leverage is a double-edged sword, lesser profit would be more desirable than magnified loss. The next short term signal would be and indication to liquidate the main position. During the period when the 2nd degree signal is breached but the mid term signal isn't, one should monitor it closely, determining if it's over reaction or if it has peaked.
Short term movements seems to be too random. However with longer horizon, those good stocks will be able to trend steadily upwards. I feel like I'm learning more with every passing day and I now have a clearer picture of how my system should work. Simulations have been carried out and like I mentioned in other posts, the worst case scenario should at most reduce my total portfolio value by no more than 15%. I've catered 5% extra due to slow reactions etc.
At the moment, I'm really satisfied with my performance. Despite gaining a 70+% in portfolio since August 2006, my net worth has increased significantly due to investments from others (guaranteed returns of 5%). And most importantly, I'm glad that I still keep my feet rooted to the ground. Usually, I will be very complacent if I have good results, but I know market is cruel and it will take it back from you when you least expect it.Labels: AsiaEnv, MapleTreeLog, NenixDreams Fund |
| posted by Nenix @ 8:26 PM |
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| Friday, July 13, 2007 |
| 13th July Update |
MapleTreeLog has hit the exit trigger. Haven looked at the charts yet but will most probably exit. Will do a more detailed analysis over the weekend.
This week on the whole is quite a good week even though like what my previous post has mentioned, I do have stocks with weakness, in particular, MapleTreeLog, AsiaEnv, MiddleEast and probably Soilbuild. Other than that, the 3 of the big 4 (CAO, TiongWoon, AsiaEnv, OKP) are doing exceptionally well this week. Labels: NenixDreams Fund |
| posted by Nenix @ 10:51 PM |
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| Cracks within? |
AsiaEnv, MiddleEastD, Soilbuild and MapleTreeLog all shows weakness.
Although AsiaEnv might be affected by the placement, it cannot be denied that there is an apparent weakness in the price.
MiddleEastD has been consolidating for a long time and it seems to be losing interest. More people are eager to sell, this thus explains its weakness too.
Soildbuild as mentioned, might be going through a consolidation stage and today's selldown is quite significant.
MapleTreeLog has to be the biggest "shock" of the week in my portfolio. Having bought at $1.47, it has came down to $1.39 which is an approximate 6% loss. However this is a reit and keeping it as a defensive stock might not be a bad idea. I need to take a look at these shares when I get back tonight.
P.S. its kinda shitty when I didn't take note what is my exit price for my newly acquired stock. I have a feeling that MapleTreeLog has triggered it alreadyLabels: AsiaEnv, MapleTreeLog, MiddleEastD, Soilbuild |
| posted by Nenix @ 5:24 PM |
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| Personality |
This is something out of the blue while surfing my friend's blog. Guess it makes some sense as sometimes I do prefer to have a quiet time alone at home. Linking back to trading. I think if I happen to get this fulltime job, it will be lonely job as you are on your own most of the time. It's the same with my current IT-related internship in the bank. But luckily, if this result holds true, then guesss that I am quite suited for that kind of job :)
You Are the Thumb
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You're unique and flexible. And you defy any category.
Mentally strong and agile, you do things your own way. And you do them well.
You are a natural leader... but also truly a loner. You inspire many but connect with few.
You get along well with: The Middle Finger
Stay away from: The Pinky
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| posted by Nenix @ 1:58 PM |
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| Thursday, July 12, 2007 |
| Portfolio Updates |
CreativeMaster remains the highest risk stock because of its volatility. 5d EMA just crossed the 12d EMA justing that it might trend up while MACD seems to be diverging upwards. I think barring nothing catastrophic happen globally, CreativeMaster will start trending up by next week.
MiddleEastD shows a weakening in trend. Exit has been planned. This is one of the reasons why Soildbuild, MapleTreeLog and CreativeMaster are loaded as to replace those potentially weak trends. Shall wait for tomorrow's EOD before making any decision. Hopefully the "friday" effect wont have a great impact on it.
OKP has a strong trend but risk entailed is high as its volatility is rather significant. However, the momentum is strong for this stock and thus this occupies a significant percentage of my holdings
TiongWoon also exhibit strong trends but momentum isnt as strong as OKP. It is less volatile than OKP, thus it is the second largest position in my portfolio.
AsiaEnv has weakened trend after the placement. Like MiddleEastD, it is one of those that might be sold if it hits the trigger. Contrary to my previous comment that it is going to trend up, the price seems to be heading for consolidation at around $0.84. Knowing that, I still have to be disciplined and keep to my exit triggers.
ChinaAviationOil has exhibit a strong trend. Momentum seems to have peaked and should consolidate at around $3. Comparing returns per unit risk, CAO seems to be the top stock in my portfolio, thus occupying around 46+++% of my portfolio.
SoilBuild was loaded to act as a transition to stocks with weak trends. This itself has been on my radar for a long time but due to lack of funds, I gave it a pass. Trend now is ok but it seems to be consolidating as well.
MapleTreeLog was loaded as a transition phase to stocks that I might exit. It fulfils the primary buying signal that the 12d EMA crosses the 26d EMA. However, market strength in this counter seems to be rather weak. Might trigger selling signal soon as well
BrightWorld was meant to be unloaded due to weakness in technicals. However, the price reversal today caught me by surprise. Thus I will still be holding on to it till the trend bends
Risk taken has increased to 8.648% of portfolio value and 11.14% of cost value. The risk incurred with respect to cost value exceeded my limit, thus, all buying shall cease until more equities reach "zero-risk" status.
Overall, the main shares I hold, barring AsiaEnv, are doing well, while other transition stocks seems to be consolidating. I do not expect tomorrow to surge again as profit taking might most probably rule over most. Getting tired now. So have a good Friday aheadLabels: AsiaEnv, BrightWorld, ChinaAviationOil, CreativeMast, MapleTreeLog, MiddleEastD, OKP, Soilbuild, TiongWoon |
| posted by Nenix @ 11:39 PM |
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| OKP loaded Part 3 |
As they say, trend is your friend till the day it bends. OKP has risen again, and I have loaded in more at $1.01.
Cost averaged to $0.8437.Labels: OKP |
| posted by Nenix @ 2:33 PM |
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| Wednesday, July 11, 2007 |
| CreativeMast |
Like Soildbuild, this used to appear constantly on my screened stocks. And like Soilbuild, I think I have entered in a little late. However, this is more volatile than Soilbuild, thus in my context of calculations, it bears higher risk. However, I decide to load a small position. I do not expect this to be a multi-bagger even though the trend is rather strong.
Another reason for loading this is because my other holdings (BrightWorld and MiddleEast and maybe MapleTreeLog) are showing price weakness. This might be a transition phase for those equities whereby their trend seems to die down.
Loaded @ 0.265.Labels: CreativeMast |
| posted by Nenix @ 11:29 AM |
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| OKP loaded Part 2 |
Loaded some more position of OKP @ 0.885 cost averaging it to 0.78833.
2/3 of total positions are for a shorter time span.Labels: OKP |
| posted by Nenix @ 9:36 AM |
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| Tuesday, July 10, 2007 |
| Something ain't right |
Putting aside the trading system for a while, it seems like something just isn't right. Today's market seem to be very weak. Maybe yesterday's market shot up too much. Haha.. but hope that I'm wrong then. I have to stick with my system, even though my buying and signals still need to be worked on.
Have a good Tuesday to all |
| posted by Nenix @ 5:49 PM |
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| CAO Craze |
Who can forget the CAO scandal that broke many people's hearts? How can forget its plunge from it all time high of $8 to sub-$1?
Today, CAO has shown terrific recovery due to support from Temasek holdings and BP. Debts are mostly cleared and it has a dominance in civil jet oil in China (I'm not a fundamentalist, so these might not be accurate)
But what matters most is what the public thinks. With it going on a solid uptrend, those that kept their shares at $8 will most probably cost average. This might contribute to the reason why the buy ups have been so easily cleared. IF that is the case, the true consolidation price will come once those people have cost averaged (around $3.50). Of cos, this is all my guess, and ultimately, institutions might have more power in controlling the price.
Anyway, when many small retailers are involved in a stock, to me, it does not bode well. While the price will rise up quickly, it might blow it out of proportions, tempting the institutions to unload.
This is just my conjecture, so most probably, I will not be 100% right. Will need to see its volume distribution charts to draw more conclusionsLabels: ChinaAviationOil |
| posted by Nenix @ 9:09 AM |
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| Monday, July 09, 2007 |
| Templates Done!!!!! |
Finally, the first draft of templates are done. Now I can carry on to phase two - Data entry! This will be an interesting procedure because I will be looking back at all my trades. In the template, I am supposed to write an analysis for each buying and selling decision. I will be relooking most of my mistakes and hopefully, I will gain new insights.
Although I dont like paperwork, but for these templates, I will print them out for easy viewing and analysis.
As of writing, CAO finished its consolidation phase faster than expected. Didn't expect it to surge again so soon. Others like TiongWoon and OKP are slowing down after the accelerated run last week.
Anyway.. the challenge starts now, hopefully I will learn things from my past experience. Again I have to say that I'm lucky that I started trading in the bull run as mistakes made in the past are not heavily punished. Wish me luck for phase 2 then!Labels: NenixDreams Fund |
| posted by Nenix @ 4:34 PM |
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| Monday Blues |
Loaded some more CAO at $2.48 to cost average it to $1.88
Loaded some AsiaEnv at $0.90 to cost average it to $0.84
Monday Blues is hitting me, and I am trying to play catch up. My CFD summary tables have just been finished, even though I feel that something is lacking. And what's left is the stupid dossier templates and the integrating portion. Its really making me stressed. And the severe lack of sleep doesn't make things easier.
But to quote from Transformers Movie, "No sacrifice, no victory"Labels: AsiaEnv, ChinaAviationOil |
| posted by Nenix @ 10:13 AM |
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| Friday, July 06, 2007 |
| Portfolio update on 6th July |
This is the update for this week. During midweek, I sold off BioTreat at a loss. Using those funds, I've loaded Soilbuild and MapleTreeLog. Both are technically different equities, with the former having an established trend while the latter having a positive change in moving averages.
This week, my portfolio increased a bit due to to TiongWoon and OKP. Others are lukewarm. The risk incurred has been covered in the previous post. Other than that, nothing critical to mention. Have a nice weekend aheadLabels: NenixDreams Fund |
| posted by Nenix @ 11:43 PM |
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| Risk Portfolio |
This are the maximum risks of my equity in my current portfolio.
ChinaAOil - 2.64% potential loss to portfolio value
TiongWoon - 2.397% potential loss to portfolio value
AsiaEnv - 0.90% potential loss to portfolio value
OKP - 0.75% potential loss to portfolio value
MiddleEastD - 0.562% potential loss to portfolio value
Soilbuild - 0.51% potential loss to portfolio value
MapleTreeLog - 0.486% potential loss to portfolio value
BrightWorld - 0.236% potential loss to portfolio value
Total Maximum risks is 8.49% of total portfolio value. Even with maximum liquidation, plus and minus slow reaction in selling off in the worst scenario, the loss will never go beyond 15%.
Below will be the Managed Risk in my portfolio. It is assumed in this case, that 'zero-risk' status exist. At the moment, only CAO and Brightworld has acquired 'zero-risk' status. This brings down the total Managed Risk to be 5.614% of total portfolio value.
Usually, my decision to add more positions will be primarly based on Managed Risk. However, I should consider the maximum drawdown (which means that CAO for example, would have to fall to 1.55, since my average cost is 1.70, Brightworld back to 0.47 as my average price is about 0.52). As a result, managed Risk is usually a more realistic measure.
Potential returns have not been calculated due to the fact that template to fill in the data is incomplete.Labels: AsiaEnv, BrightWorld, ChinaAviationOil, MapleTreeLog, MiddleEastD, OKP, Soilbuild, TiongWoon |
| posted by Nenix @ 12:05 AM |
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| Thursday, July 05, 2007 |
| Random Thoughts #7 |
Even after lots of analysis, how much control does one actually have over the price movement?
In my opinion, I think once you are loaded into a position, you are at the mercy of market forces. You can pray, you can predict, you can justify your decisions but eventually you are powerless to move the price (Assuming most are retail investors like me). That is why exit strategies are important. I've read in books saying that they are more important than entry strategies and rightfully, I really think that is the case. This is because only when you exit, everything is realized. It can be your losses, or your gains, watever it is, it only matters when you close a position.
Another important aspect is portfolio management. What point is it to have 20 stocks with only 1 of them having 100%? when it will be diluted to 5% gain in portfolio? When you see on papers, those "gurus" advertising their power stocks failed to mention one thing. What is their overall portfolio gain? I could have jolly well bought every single stock and then boast the multi baggers.. haha, then maybe i could be a guru as well. hahaha.
Anyway, since this is random thoughts, I do not really bother about organizing my thoughts. So coming to the point of "gurus". These gurus, invesment gurus, millionaire gurus, all have one thing in common. They say what you want to hear, which is "getting rich the easier way". In fact, the way to get rich is to be a guru and teach.. haha. Anyway sticking to investment gurus. Many of them tell you their astronomical returns, but do they mention about their drawdowns? what are the risk incurred to get this type of returns? Surprisingly, they just fail to mention it. Why? I think its because the general public likes to hear about gains rather than losses. People are focused on returns rather than risks. But one must always save to fight another day. Capital preservation is the most important thing when it comes to investment/trading/betting. Without money, you cant invest. That's the whole point.
Even at this point, while at a 50%+ returns, i never once had the mentality that "i could take more risks since i'm earning more now". I believe that many people who burned their fingers regret that they take too much risk. Leveraging is a magical thing. I'm still learning and you can see from my posts, that i had lots of errors in measuring leveraged risks. But this is something all should look into. As long as you are disciplined in cutting loss (the most painful thing a trader should do), think of this as a long term thing (20+years), you will understand that trading/investing is a lifelong process.Labels: Random thoughts |
| posted by Nenix @ 11:46 AM |
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| Random Thoughts #6 |
With a larger pool of funds, I think its normal that a little bit of fear is starting to creep in. I've never seen so much funds in my life (<-- low net worth bloke) and now I think I have reacted by diversifying more.
Although I have a system which determines the position size, somehow, I sometimes fail to follow my rules of topping up on running stocks (read: OKP, Brightworld). I think in my mind, I already have a mental block on an imaginary target price (maybe governed by the analyst reports), which is why I only look at analyst reports after I load the shares. This is to prevent me from being biased towards an equity.
Unlike investors who invest in company, I think I invest in my system of trading which tries to capitalize on the herd mentality. I really hope its a good system, so that in years to come, I will attain status of financial freedom. (passive income per annum more than expenses and loans servicing)
P.S :CFD calculator is wrong.. hmm.. took it down and hope to fix it soonLabels: Random thoughts |
| posted by Nenix @ 11:24 AM |
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| TiongWoon again |
Loaded another unit (1 unit is an estimated percentage of my portfolio, for eg. 0.5%) of TiongWoon at 1.19.
Catching the bull run is a tricky thing. Anyway, a bulk of my TiongWoon will be offloaded when it retraces, but the core of the equity will remain intact till the trend reverses.
Cost averaged to $1.086 at the momentLabels: TiongWoon |
| posted by Nenix @ 11:13 AM |
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| Soilbuild |
Always monitoring this stock, it has always been on the radar. One reason why I didn't get it is because CFD doesn't offer this stock, thus zero leveraging could be done on it.
One thing I like about this is that it is a quietly trending stock. This makes it less susceptible to range traders, which in my opinion, often causes whipsaw trends.
Anyway, loaded some @$1.79.
This brings me to 9 holdings, which is managable considering the increased size of available funds.
ChinaAOil, TiongWoon, AsiaEnv, MiddleEastD, MapleTree, OKP, Soilbuild, BrightWorld and MDR.
Potential stocks being replaced are MiddleEastD and BrightWorld. MDR could be written off as its a mistake of not cutting losses from 2 years ago.Labels: Soilbuild |
| posted by Nenix @ 10:26 AM |
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| Wednesday, July 04, 2007 |
| Rotary on hindsight |
Everyone can make lots of money from hindsight.. But then again, this post is not on what ifs. Reason I wanna write it down is so that I can learn from it. In this blog full of investment/trading mistakes, this is most probably another small mistake in a sea of others.
Is the decision to sell Rotary a mistake?
Like I mentinoned when I sold it, I do have mixed feelings about it. However, whats the take away on this trade?
I feel that my CFD risk management is not good enough. This arises from a fatal calculation error for risk per unit cost for CFD holdings, which as a result, caused a huge drawdown during the recent correction.
But I feel that on the whole, I now have a clear concept on my trading style and it's a good thing in my opinion. At the very least, my new batch of trades (OKP, TiongWoon, MapleTreeLog) are done sticking to my concept.
The test will come when I have to make a decision to exit TiongWoon.
Eventually, exit strategies are much more important than entry strategies because it is only when you exit that either losses are cut, or profits are realised. All the hoohaa that happen in between doesn't have much bearing.
P.S. Haven been updating my stocks for 4 days already due to laptop issues. Will do so today.Labels: Rotary |
| posted by Nenix @ 1:04 PM |
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| Tiong Woon |
With the release of funds from biotreat, I loaded more tiongwoon. It has now been averaged to that of $1.06.
This purchase has no doubt increased the risk of my holdings. As risk incurred from this equity has hit a sizeable percentage.
So now, its time to wait..Labels: TiongWoon |
| posted by Nenix @ 11:11 AM |
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| MapleTreeLog |
| Yesterday, MapletreeLog and Soilbuild fulfil my buying criteria. Decided for mapletreeLog, since its a potential breakout. Used part of the proceeds from the sales of BioTreat to fund MapleTree Labels: MapleTreeLog |
| posted by Nenix @ 9:30 AM |
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| Lessons from Bio Treat Trade |
What a noob I am. I have never experienced partial sales for my lots (Read: small player) and today, I just offloaded my BioTreat.
9am: queued at $0.865. Then I withdrawed as I think it could be closed at a higher price.
Little did I know that some of the position have been sold. But I didn realise that.
9+am: I sold everything at $0.875. This has left me some uncovered position. In the end, I have to buy the remainder at $0.865.
What a way to give money to my broker.. haha.
Today's fiasco reduced my average price to $0.886 it is compensated by an average sales price of $0.869. Loss is about 2% for the equity and most probably about less than 1% for the whole portfolio.Labels: Bio Treat |
| posted by Nenix @ 9:23 AM |
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| Tuesday, July 03, 2007 |
| What to buy #1 |
Every decision must be backed by reason. For a fundamentalist, decision will be made based on its core businesses, while for a technical analysts, decision will be made based on price patterns.
For trend following, I see it as a subset of the big world of technical analysts. However, I do not really believe in indicators like Fibonacci and Gann Triangles, or other specific price patterns like "head and shoulders". To me, thats just like astronomy or fortune telling. In my humble opinion, I think timing the market is risky. No one can predict the future consistently in the long run.
Thus though I follow technical indicators like moving averages, they are used to give me an idea of how things are moving, I do not and will never set a target price. I used to have a sell on 5% profit kinda rule in the past, and i think it really sucked (Capitaland was one big lesson. Have I followed my system now, I would have ridden it all the way from 2.54 to 6 bucks, and then maybe reentering it when its 7). I also use other indicators like MACD, money flow index to figure out the trending stocks.
But one issue I face is, which is the better one? For my system, once I locked in on one equity, I have to stay in it till it bends. But question that pops up is, how to find the better one?
What I do is to qualify a position is to
- make sure it shows a distinct trend
- make sure that its not volatile
- make sure risks incured per unit cost is managable*
- make sure that returns per unit risk ratio is attractive*
Price movement don't lie. Every movement has a reason. For example, an equity backed by huge number of fundamental investors will have very strong support lines as they will most probably cost average their holdings if it goes below their intrinsic value. On the other hand, an equity backed by day traders will exhibit volatile movements and this is often shown in equities which are ranging.
A trend follower's favorite trend are those which are stable and trending. It will be best if it is unattractive to day traders.
All in all, I'm still working on lots of stuff and i'm still thinking through the drawdowns of such a system. Personally, i feel the only drawdown is that returns will not be as attractive as the experts.
*Currently experimenting some methods on calculating risks and returns.Labels: What to Buy |
| posted by Nenix @ 11:05 AM |
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| Monday, July 02, 2007 |
| OKP loaded Part 1 |
| Loaded more OKP at $0.775. This is done using CFD account. Cost average based on contract value is $0.74. Labels: OKP |
| posted by Nenix @ 9:14 AM |
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| NenixDreams Fund |
| Fund launchprice on 1st August 2006= $1
Target for 2007 = Beat STI index
Current price of NDF as of 1st Oct 2007 = $1.58
Current price of STI as of 1st Oct 2007 = $1.54
Difference with STI index is 0.04
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