-Bonifasius Trading-

I really regretted I did not notice this graph before. But there is no point of it.

Time to analyze it on the reason why I’d purchase the stock/ option of the stock if i’d have seen it

FMG (Fortescue Metal group), an Iron ore mining company that would rival RIO Tinto and BHP in Australia. BUY 18th Sept 2008

1.The trading volume has steadily increasing for the last 5 trading days.
2. On 16th Sept, there is a ‘false’ hammer candle stick on rising volume (slow) and on 18th the hammer reversal showing a significant change in volume increase despite a very bad day from US Market.
3. Watch stochastic from 11 and 17th of September. WHILE THE PRICE IS MAKING A LOWER LOW, THE STO INDICATOR IS MAKING A HIGHER LOW.
4. on 18th , while the price is suffering (hammer reversal), the STO is INCREASING!!!
5. Should purchase a little ,and if it is an up day the next day, BUY MORE

CFD Portfolio

Trading History

Trading Balance

Chart of PDN with MA, STO(5,3) and Volume

a. Saxotrader platform has been activated and will be a great assistant to trade in the future as it provides a more reliable data and charting than a combined yahoo finance (chart is laggard by 2-3days) and some charting websites.

b. Stop lost touched this morning at opening price of $5.20. I regret i did not sell it yesterday as the indicator shows it has shown an overbought signal (STO). However due to lecture and tutorial from 2-5pm yeserday, the stop lost may just be the best option while still booking about $3500 of profit this morning.

c. Expect the chart to cool down as it has gone up more than 15% in the last 2 days. No more trade until next week.

d. Overall system is still reliable so far. Indeed the idea of glueing one’s eye in front of screen at early morning may not be as intesting as the last trading hour. The trend of local and US market still a considerable force, however it is not that much of relevance on certain stock.

e. Similar test will be conducted until the next 5-10 more trading ahead to further test its reliablity

f. Near future plan is to identify and build a volatile stocks’ watchlist and to do trailing trade ( this will require quite some advance and tight stop lost price barrier). Need to experiment on Short more as Long strategy is improving.

Daily PDN.ax

Hourly PDN.ax

The share price is going above $5.40 at holding at around $5.46 until noon. as it breaks through 20MA and holding steady, the stop loss is adjusted to $5.35

Current price is already higher than the opening price. meaning, the range for Breakout Volatility can be filled to decide the next share price movement.

If the price holds at above 5.42 before the closing today,… we will test the Breakout volatility theory.

Second day, holding PDN overnight.
As predicted yesterday, despite DJ was down -90 points, S&P 500 yesterday was down only by 0.3%, a 0.6% gap with DJ. This may explain the slight lower opening of ASX and goes higher in the next half an hour (at 10.30am it is rising by 20 points).

a. PDN jumps to 5.36 and steadily trading between 5.36 and 5.40. up more than 7% this morning. (this may be an amateur play who is left by the train yesterday and trying to catch up this morning). I planned to top up this morning, but decide to cancel the order (size of another 10k CFD shares).
b. PDN moves up to 5.40 ( the 20 MA) smashed through 5.10 (10MA), meaning the stop lost will be raised to the nearest short term trend (10MA), 5.10. Stop lost is positioned at 5.15 (higher than the theoretical formula)

System

The 20MA is currently at around $5.40 and the stock has been trading at $5.36-5.39, just shy a few cents from breaking through an important resistance of 20MA. Failing to break this resistance, it will return back to the $5.10 (MA 10), as its first support now. $5.15 is to take profit when it happens during the trading day.

( I’m testing a stop limit price based on previous day closing price and MA )

Based on Volatility Breakout theory in Van Tharp book:

Gap (open-close) = 5.42-4.97 =45c

Range = Wait when it is near close

Trading 2 (13/8/08)
LONG – PDN.AX - (13/8/08) – CFD
10000 shares
Entry: $ 4.90
Exit:
MAC-V
a.    Moving average is below 20, 50 and 200 MA.
b.    Candlestick is big bullish candle with first hour opening slightly lower and steadily moving up through out the day until 3pm. The last 2 days of the stock has been down, however the last 4 days of the candle stick is bullish candle. Noted that yesterday’s lowest in 3 months register a DOJI candle (almost), however the lower tail is not too long and the bounce volume is average.
c.    Volume increased significantly today, as the stock was up slightly more than 6%. A few days ago, there is a big bullish candle with very strong volume. (OBV is not checked due to trading platform is not activated again yet).
d.    Fast (5,3) Stochastic shows the stock is in oversold crossing below 20. The spike of 6% is believed to be the main indicator that the bounce may happen.
e.    RSI indicate 30 (oversold together with STO), however, note that RSI is on negative gradient slope (if the stock fail to rally, it will reach new low).
f.    RSI indicate an opportunity to short if the bullish rally fails the next day.
g.    As of 2-3pm, the stock has been staying at its day high range. 4. 86-4.90.
h.    MACD is weak, and decided that cash to enter the trade should lower and if tomorrow’s indicate a gap up,… may consider to top up again.
i.    Stop limit sell $4.70. If the price falls to yesterday’s closing, the bullish short-term trend may be weak (and will prepare to short if it happens, note the STO is oversold).
j.    Stock price movement was contrary to the ASX which is down -94.4 on All Ord. This contrarian trading is noted to be risky, therefore the capital allocation is only a quarter of previous trading. However, volume on trading day is over 6million shares, 2-3x daily average.

Holding position overnight (due to class until 5pm).
The closing price: 4.93 (trading platform), 4.97 (yahoo finance).
Booked profit $300-$700
STOP LOST position is maintained at 4.70, expecting a strong follow up the tomorrow. (if the price cross 5.10 ,@10MA, or 5.30@20MA consider to move the stop lost and top up the holding).

Trading 1 (12/8/08)
Short – ORI.AX - (12/8/08) – CFD
20.000 shares
Entry: $ 24.60
Exit: $ 23.87
MAC-V
a.    Moving average shows that the stock has been below the 20, 50 and 200 MA. The price fall back yesterday when it tries to break the short term 20 MA.
b.    The last 3 trading day has been green candle and yesterday’s hammer initialize the reverse trend and it is at just below 20 MA signaling the bullish 3 candle stick before may not be valid as it is not supported by significant volume
c.    Volume is averaged around 1million/day and no change even though the candlestick is 3 white knights.
d.    Price open up from yesterday, sharply down and sharply up by mid-day. By 2pm, the price has fallen back as it failed to break resistance.
e.    RSI shows a value of 45 (middle of 30 and 70 indicator). This remains the main concern as it starts showing an oversold indication.
f.    MACD (26,12,9) confirm it is at lower bearish trend.
g.    ASX index is flat by 2pm, and dow jones was moderately up by +56 points. Concern is ASX climbs up at the last 2 hours of trading however stock is remaining at lower price as expected.
———————————————————————————————
Exit next day , 13/8/08
Dow jones is down by -180 points ( I should note S&P 500 from now on as it is more accurate trend indicator than dow jones, BAD HABIT!). asx open by -100 points (nearly -2%) , slowly rising to -81points (all ords).
Planned to move the stop lost limit , since trader is still new to the system, it is sold at market price , and profit is booked regardless of the system usage error.

Note: Capital management/ cash position’s model and application is very weak, trader is yet to pin a method to determine how much capital to risk based on the confidence a certain trading setup.

Closing the trade with booked profit of $ 7300

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