The Student Loan Ranger

This is part 1 of a year in the life of a beginner trader. Look for updates every week until TSLR celebrates a year at the helm of this blog. This is just too funny, I can't believe how stupid I was when I started doing this..

I can do nothing here but cut and paste a section of my first post. Anything highlighted, in bold or in large text represents a ridiculous statement that makes me cringe. This period lasted about 4-5 weeks and I lost a significant amount on just 2 trades. My first trade was a winner though!

"Have you read the report man!?" TSLRs Fundamental Analysis Era.


“Trade 1
Severfield-rowen UK
Absolute rock solid fundamentals, and just had a huge crash for no real reason except profits are a slight below expectations. Decent dividends too but haven’t decided on whether to keep going on that. I bought 315 shares at 2.932. I was going to buy at 2.652 but my broker account wasn’t open :( boo hoo etc

That red dot is where I got in. My target price for a £100 profit is 330p, but with it’s current momentum and rises despite small volumes, I expect this stock to see little to no resistance until the 400p mark, when it hits 400 I will make £321 (34%) profit. However the timeline for this could be long and I have some exciting prospects on my watchlist such as Coal of Africa, Desire Petroleum and Rift Oil. This share was a great value buy and it could go back up to 500 longer term for £636 profit, but holding too long isn’t what I want with the bulk of my loan.

I purchased 115 shares in The Royal Bank of Scotland at 400p. Reasons being that this is one hell of a company. They’re about to announce record profits, Qatari investment rumours and a decent dividend date in the not too distant future. The banking sector took a huge kick in the nuts, well, the whole FTSE took a huge kick in the nuts in Jan so this was a great opporchancity to snap up a solid company with good ratios on the cheap.

It was on my watch list with SFR and BARC for my first pick but opted for SFR looking for money gain over percentage which sounds crazy but hey. I intend to hold this long long term so don’t expect much news on this. Anyway my target for this is 550p for £164 profit within the year, but I may hold until I’m an old man. My SFR money etc is for the real gains.”

“RBS on the other hand announced £10 billion profits up 10% on last year and a sizable dividend increase – but it closed down -1.26%. Funny old world. “ The earliest sign the banking sector was in serious trouble.

“US markets down again on Friedegg so some pessimism surrounding the opening bell on Monday, particularly for RBS. That’s the general consensus, but in my opinion RBS will bounce back up over 4. I hope. Either that or it will find support at 360. But hey, ex-div on Wednesday so that’ll be £25 into the profits for the year.”
If the market was bearish and RBS looked bad, then why did I keep holding it? Also I was exposing myself to 40p downside for 10p upside. That dividend was worth SFA!

“I’m expecting SFR to really rally this next week. I am extremely tempted to sell out at my original target of 330p, but targets are for losers. “
This remains possibly the dumbest thing I have ever said in my life.

http://thestudentloanranger.blogspot.com/2008/03/media-and-market.html
Why did I not see the global financial crisis while writing this post!?

“SFR is a bee-in-bonnet scenario. It just climbs all day, hits 315 then closes at just over 304.”
Somehow I did not realise that this concept was support and resistance.

http://thestudentloanranger.blogspot.com/2008/03/road-to-recovery.html
Beginning to question the trades i’ve made, but remain in love with first big loser SEO

“SEOs results were out on Friday - no positive movement on the share price though - it's gone down quite a bit. However, looking at the final years results and the interims from last year, their position has significantly changed for the better and it looks like a solid long term investment “
This is the classic beginner mistake, initially a short term trade, SEO is now part of my “long term strategy”. OMG I was bad.

“Excellent surges on Wednesday and Thursday (18%/22%). At it's peak it kissed .9 which represented a decent opportunity to get out for a loss of around £300 - half of what is was on Tuesday.”
This is about the SEO trade, gaining 50% on a position that is already a monster loss is an absolute god send. Why did I not take this!?

Chart evidence

There are too many lessons in this portion of text to digest in one paragraph. I don't even know where to start so I won't even bother. But anyone who has ever traded will know exactly what I mean!

Next week: L2 TA III era.

Well that's just great. Another day off college, this snow is just insane. The snow was more or less melted, then for a 2 hour spell this morning there was a huge covering of snow that has made it even more unsafe to drive than yesterday.

This webcam is about 3 miles from my place so check out the conditions here: Deeside gliding strip web cam.

No doubt I'll make the first post in my story so far today..

Well we've got over a foot of snow here today I reckon, and my much anticipated return to college has been put off for another day. I am so bored it's unreal. No college, all mates at work, no trading, crap weather, gym closed, nothing on TV, watched all my DVDs and I've read all my books. The Mens Health I just bought distracted me for all of an hour.

And here is some analysis on an interesting looking stock, RIG.

Yes the World is in recession and the price of oil has slumped dramatically in the past few months. However, in a market that shows consecutive bear signals on nearly every chart, RIG has 3 very bullish signals interlinked with each other over the past 4 months.

First off is a the beat down, which became a falling wedge. These wedges are bullish and often lead to a substantial rally (I see these all the time on 15mins). It is also a reversal pattern. Another reversal pattern is the inverse head and shoulders, the top of which forms the most recent low in RIG at $41.95. A reversal pattern in a bear market, followed by what could turn out to be a continuation pattern in the form of an ascending triangle.

There are a few key prices to watch here, most notably the $57-$58 mark, which is serving as overhead resistance for the ascending triangle. Also, $50 in the shorter term acting as support. The next low would ideally be above $48. Any breakout of $58 on a re-test would be a good long signal, proving it also breaks above and is then supported by the 50EMA which is currently pinning RIG down.

I would like to see this consolidation over the past few days get tighter and then I'll watch for some volume coming in.

Measured moves:

Wedge ~ $83
Triangle ~ $72
IH&S ~$75
200EMA currently at $71.2

I will watch these levels if RIG breaks out.

However, given that this is a market in which many TA patterns simply fail, it is wise to exercise caution here. The price of oil is certainly a lot more stable at the moment, but that is reducing the underlying profits of companies like RIG. The likes of Noble have fallen to prices where the outlying stock is worth less than the actual company for example, and there's no reason why this can't happen to other companies.

Anyway, with good risk measurement in place, I think RIG is a great long on the breakout with stops around $54.

Things to look out for (break signals and entry points):

1. Moves up off the 20EMA consolidation for a bull flag type setup
2. Clear break above $58
3. Volume on the break
4. Strong bullish candlesticks
5. A pullback on declining volume to $58 or the 50EMA for entry
6. Initial targets around $70-$75
7. Continuation patterns forming after potential run to $70
   
8. $85+ targets medium - long term

Post-script edit:
I just realised I'm a month away from my 1 year anniversary as a blogger and market follower. To celebrate this momentous occasion I'm going to feature the most ridiculous things I ever said about the stock market in a series of quotes and chart montages, and a few lessons I've learned along the way. The third paragraph of my first post is possibly the most dumbest naive thing I think I have ever read! I have come a long long way since then.

Edit for later:
OK well I had nothing else on so I wrote an article type post about my year in trading so far. Obviously I can't comment on the coming month, so I will be releasing my chronicles in part issues every Sunday until the 1 year birthday at the start of March.

There are 8 sections (2 a week) and one bonus section (special anniversary pulloutl) that serve as a history of my trading. From the most ridiculous statement I ever made about trading, to my series of broker-blowups - all tales are featured in this candid tell-all biography of The Student Loan Ranger! Loan Ranger... Hoooooooohh! (to Thundercats intro voice).

Not really watching the markets a great deal because I'm not trading today. I'm going through the motions of sorting out a trading account with thinkorswim. I'm test driving their platform this afternoon and so far I'm impressed.

This setup is a lot more efficient than running CMC and Quotetracker. Also I'll save $35 a month because I no longer need QT and IQFeed.


Strong opening, looks like the SP is looking to clear 850 cleanly. 860 could be sticky though. Internals are strong featuring bullish continuation patterns. New X support at $32, new BAC support at $7 but I don't trust either, especially BAC.

Is there anything more enjoyable in this World than getting up on a bitterly freezing cold January morning and driving 20 minutes to install your brokers platform on a computer with no history of prior installation (and the client ID files that go with it) - just so you can close out a position that has now exceeded entry risk by over 5 times?

Email me if you know of anything more fun than that. Just so you know GBPUSD has done nothing but rip overnight.

Update:
I have closed the account with CMC. Look back later for a potentially humourous montage featuring the logos of iii.co.uk, CMC markets and the Union Jack and me looking victorious of course.

Well I think I am maybe a little bit more composed than I was a few hours ago. Although I don't know if I should still be angry.

Here is an image that summarises how I have been feeling the past few hours, after my platform went awol on me. I cannot connect to the internet when my platform is on, and my platform has an update that needs to install (which I have already done by the way). The update itself stops itself from downloading, meaning I cannot log in.

I have a position open, short GBPUSD and I could be seriously exposed if I can't close it at a loss as the system and everything else cut out as I was placing my stop limit orders. The only websites I can access are Google or it's subsidiaries - including blogger.

Anyway enjoy.

Looking to follow up on yesterdays good day with another consistent trading day. I felt yesterday that I reaped the benefits of focusing on a smaller pool of stocks, and by paying attention on the market internals - which were the basis of my entries.

I did however cash out too soon on CSCO (by .30) and BAC (by .80!), and I also missed a straight forward $3 move in X. I left the market with an hour and a half to go so I could play 5-a-side. I also missed my target in NUE <$38. This looks like selling hard. Today my goal is to ride my winners down with full risk exposure in an attempt to increase my bottom line. Here are the levels I'm watching today:

BAC - $6, $6.98, $5.40, $6.40
X - <$29, $32, $30.50
CSCO - $16, $16.50, $15.40, $15
NUE - Continuation moves under $38
CME - $155, $175
RIG - I won't trade it, but it looks like $51 is a key level in the short term.

After yesterday, I am extremely bearish on CME BAC NUE and X. CSCO showed good relative strength at times, and if anything I'm watching is going to go up today I think it will be CSCO. If CME drops $155 and X drops $29 clearly, then these should decline rapidly.

Overnight the 500 climbed steadily and looks like it's resting around 835. 800~850 remains the range in the short term. Any moves out of this will provide a spark for a take off or crash landing.

Forex market technical analysis:

EURJPY Really followed through the inverse head and shoulders formation on the hourly chart which had a measured move of 119.5. This level was hit precisely and the next level of support I'm looking for on retracement is 117.


GBPUSD has surged surprisingly well off yesterdays double bottom and broke through 1.4. I am looking to enter long on a pullback to 1.40 as this represents new support. Next resistance 1.45


EURUSD did well yesterday as the dollar weakened. Broke the short term downtrend and moved from 1.30580 to 1.33271. I am awaiting a pullback to support at 1.30500.


GBPAUD has also broke short term down trend as it looks hit resistance at 2.1450. The chart is fairly dull here, just watch for that resistance level.


Updates and charts to follow intra-day.

Update 13:45 (08:45US)
Interesting pre market here. X jumped to $33 but has settled back below $32. Little bit of a gap in BAC currently $6.35. CSCO tapped $16.50 before pulling back sharply. No red on the screen yet although NUE is dicing with death.

Market about to open update
Something fishy going on here. Gapping up here quite a bit, most stocks at resistance levels. Looking for a sell off.

Update 15:24 (10:24US)
Choppy morning. Went long CSCO on breakout retracement at $16.51, stopped out for .47 - was a nice exit as it sold to .29. Currently back up at $16.5 but market looking weak and confused. Watching to enter X at $32.2.

BAC showing relative strength in tight consolidation range.

Update 17:11(12:11US)
Rerally choppy today. Internals keep ranging in tight channels. CSCO showed some balls with a nice run to $16.90 without me in the seat. BAC broke range above $6.4 but hasn't done anything to make me want to trade it.

I'm short GBPAUD and long EURJPY as per my TA from earlier. Both positions winners at the moment.

Waiting for a reveral around 18:20 my time.

Update 20:03(I don't care what time US)
A flake causes a snowball which causes an avalanche. That is currently my sentiment towards everything right at this second. A phone call. A dodgy cable. Disconnected. Broker platform crash. FX platform crash. Quotetracker crash. Data source crash. Internet only working for Google websites (including this).

I'm in an FX trade right now and I have no idea how much I'm losing because I can't connect to anything. It's all tits up and I'm very pissed off at the moment. All because of a stupid damn cable that the owner just will not fix.

Ok it's 12 hours since that FX trade, and despite closing it this morning I'll start a new intra-day post. Looks like I caught a nice exit on the GBPUSD short, here is the chart, I'm seeing a basing at this price and will look for breaks out of this consolidation range;


I am also watching a descending triangle in the S&P with support at 800. Todays resistance around the 835 mark.

As I said yesterday, today I will be watching CSCO CME NUE X and BAC.

For some entertainment relief, check out this Pantene shampoo advert featuring Mylene Klass, and then for your consideration, Daft Punks 'Aerodynamic' video.




Updates to follow during the day

Update 14:00 (09:00US)
Before the bell we have BAC opening strongly with pre-market prices around $6.50. I will look to enter long at around $6.30 depending on internals and if the 500 breaks this descending triangle. CSCO mid-ranging at $15.85 looking to short or go long at $16 depending on market again. X mid-range, watching the key levels at $32, $29 and $31 here.

EURJPY breaking long from an inverse head and shoulders on the hourly chart. EURUSD hitting resistance around 1.309. 1.38 the key level on GBPUSD today.

Nothing chartworthly until the bell.

Update 14:43 (09:44US)
Strong opening, BAC ripping to $6.83, CSCO at $16.25. All green on the screen. X lagging a little and is approaching $32 into the 09:50 reversal period. Internals weakening. Looking for pullback for entries.

Update 16:00 (11:00US)
Just scalped out a nice trade in BAC. Internals were weakening with bearish continuation patterns while BAC began to top out at gap resistance circa $6.98. I was hesistant to short given it went to highs 3 bars in a row, then came 3 consecutive lower highs and some sellers. Shorted at $6.90 with cover at $6.81 for +$0.09. Nice exit as it has bounced off up there on the 20EMA with internals showing early reversal patterns.

Lots of buyers at $6.84/84 today so watch that level on further pullbacks. Should really have added to my position on double top retest of $6.90 but started blogging instead. Price is now $6.75 so there was more to be made, but I'm happy with the outcome.

Update 16:30 (11:30US)
CSCO hit support and resistance level at $16.50 and has dropped off .20c so far. Missed the trade by focusing too much on BAC. Internally there is an ascending triangle on TRIN with established downtrend in advancers and sellers in the top volume stocks. Which means we will probably see a violent surge or casual decline.

Hesistant to take more positions until the 500 is a little more decisive and some leaders break their consolidation ranges.

EUR showing good strength against JPY and USD.

Update 17:20(12:17US)
Snooze central here. Everything going sideways in 5 cent channels. Will wait for post lunch action. Would like to short CSCO at $16.50 or long at $16.

Listening to 'Mirrored' by Battles this afternoon. Pretty decent elevator/trading music.

Update 18:15(13:15US)
Caught a nice short time trade in CSCO at last. Looked like $6.45 was going to be the best price for a short so filled there with a stop at $6.523. Rode it down to $6.30 intraday support area for an exit of +$0.15.

CSCO has shown great relative strength today, but with severley weakening internals and the rest of the market getting pulled down, it was a nice small risk place to short. Ideally should have held with limit fill at $16.05 but we'll see how the day pans out. Still feels like I'm taking things off the table too quickly.

BAC really struggling here, and I may look for entry at $6.30 long. X now under $30, would like £29 flat for long.

Market normally rallies up/down at 18:30 so waiting for that while listening to Daft Punks Alive 2007 CD loudly and with intent to rave.

It's late Sunday night and I've been doing some more TA. I spent quite a bit of time watching the FX markets now, trading off a demo account at FXCM.

Anyway been watching GBP/USD and have shorted on a nice technical setup and I'm currently up a decent amount so will think about closing out before I go to bed. 24 year lows on the pound is too good an opportunity.

Also noticed a delay from CMC on the FX spot prices so will look into potential exploits. I think it's probably because the desks aren't manned at this hour.

FXCM top, CMC bottom. Taken at same time.

Update (10 mins later)

Wow!

Well I barely clicked post before I closed out that trade, what a sensational drop that was. I've exited after 10 minutes for +£86.78 net of a £10k position

Setup, entry and exit:

Shorted at 1.3705 with cover at 1.3587. Double tops at the 200EMA are amongst the best setups in this market. As I write this GBPUSD is at 1.3562/1.3567 and going down which means I could have made quite a bit more. Either way when a trade goes so quickly in your favour there's no harm in taking a sizeable profit, especially when you're about to go to bed. I'll sleep well tonight.