The Paper Trader

Back to where I started

Catalin Tecaru — Fri, 24 Jul 2009 10:09:55 +0000

I’m now in Crewe train station moving back home to Romania. I didn’t have time to identify good trades and i’m still uninvested. After i took a position in vedanta resources i also took one in Autonomy Corporation. Let’s just say i didn’t understand the platform well and i’ve taking a daily rolling spread. Bottom line is I closed both positions missing out on a profit of maybe more than 1000 £. Lesson learned : need to stay concentrated and stick to my strategy. The good news is that i did not loose ant money. i had 10000£ and now i have 10 012 £ and i made a “huge” profit of 12 £ . I’m going home now after a year in the UK and i’m going to devote more time to this. For now I will concentrate on my journey. Manchester – Crewe- Birmingham – Northampton – Luton Airporn – Bucharest Baneasa – Galati. Long day ahed

First buy – Vedanta Resources

Catalin Tecaru — Fri, 17 Jul 2009 11:41:40 +0000

My first buy is a risky one so obviously I will use the 3000 £ fund. Vedanta Resources is a mining company. It’s a hot stock in hot industry. It’s very volatile but in the past i successfully managed to predict it’s trends. Now it seems to be on an ascending trend. I took a 10 £ per point buy position at 1511.5 hoping to get at at least 1600 even 1800. As my judgement was made by looking at the daily chart I am planing to hold this position a week or even more. I set the stop loss at 1420 thus blocking around 894 £ of my 3000 fund. I set this stop loss by looking at the chart and not by judging how much money I invest. I hope it was a good idea. Any comments are welcomed.

Autonomy (LSE:AU) on the watchlist

Catalin Tecaru — Thu, 16 Jul 2009 18:32:24 +0000

A fist move i’m going to make is to add Autonomy Corporation on my watch list.Autonomy Corporation plc (LSE: AU.) is a global leader in infrastructure software for the enterprise. Autonomy’s technology powers applications dependent upon unstructured information including call center, customer relationship management, knowledge management, enterprise portals, enterprise resource planning, on line publishing and security applications. (http://www.autonomy.com) They’ve always had good fundamentals and they did very well even in the latest crash. Annual reports just came and they’re really good with second quarter net profit rise of 67% to $50.9 million. The newly acquired Interwoven software is also doing well. For some reason though share price dropped 8.57% today to 1205.0 . It seems like a good opportunity to buy. I’m going to keep watching it and see what it’s doing for the next days.

Autonomy price chart 3 years daily ticks

As you can see in the chart above the company had it’s moment in respiro in the past but quickly recovered.

The second 1 year daily chart shows the trend Autonomy has followed and how it showed signs of trend reversal.

In spite of the good results the market has been a bit unfair to this company and even though I am going to follow the chart for a double bottom or other sign of price recovery the main argument for a buy would be the strong fundamentals. I am going to give more details when and if I decide to make take a buy position. A thing I neglected and I will look into is the sector the company is in. For now Autonomy Corporation is just a good acquisiton to…my watchlist.

The Strategy

Catalin Tecaru — Thu, 16 Jul 2009 12:55:33 +0000

I will divide my capital in two “funds” : A main one of 7000 and a “hedge fund” of 3000.

7000 £ fund :

The goal with this money is capital growth. The risk level will be set to be moderated. Positions taken will be up to 3 months. The stop level will be around 10 % depending on the stock chosen. The plan is to cut looses short and run winners. To ensure diversification in the portfolio stocks bought will be from several sectors of the economy trying to avoid the “hot sectors” highly popular in the media but very volatile. One place I will look for such stocks will be the Top lists section of the ADVFN site. The choices will be made based on fundamental analysis combined with basic technical analysis.I will look for companies with strong fundamentals who proved constant growth and surrounded by good news.

3000 fund :

The goal of this is to be a “hedge fund” operated with highly risky positions that could have a high financial return. The decision making will be based exclusively on technical analysis and news reports. Positions will be held open from one hour to one week. Investments will be made in “hot sector stocks” , indexes, currencies, commodities that prove high volatility. I believe that with Spread Betting volatility can be your friend helping you to make money quick ( but also loose great amounts). I will try and identify trends and chart patterns and act according to those. The stop looses will be very tight and the open positions need to be closely monitored.

It’s not a good idea to have money out of the market but i will take positions one at a time because of my lack of experience. I will identify good companies one after another and hopefully in a short time i will be fully invested.Even though my trading platform is on Interactive Investor, for documentation and information I will use the ADVFN site which is great from this point of view.
Another thing I will do is set up a watch list with possible “candidate” stocks.
This is the a large view of my strategy.I will try to keep this site up to date with my positions and evolution of the “funds”.

The Trading Platform

Catalin Tecaru — Mon, 13 Jul 2009 15:18:45 +0000

This is the trading platform I will use

About Spread Betting

Catalin Tecaru — Mon, 13 Jul 2009 15:03:32 +0000

For those who don’t know what Spread Betting is I will try to explain it in a simple and easy to understand manner. Spread Betting is a form of financial bet where instead of buying the actual shares you bet on their prices to go up or down. You set an amount per point (penny, cent,euro cent etc) and for every point the share price goes up you win that amount or loose that amount of money if the price moves against you. For example if you take a buy position and set a bet for 1£ per point on a random share every time it moves you earn or loose a pound so if in one day it moves 17 points you win 17 £. It’s the equivalent of buying 100 shares. With Spread Betting you can also have a sell position where you practically bet on the share price to go down but if it goes up you loose money.

more on the subject @ http://www.igindex.co.uk/spread-betting/about-spread-betting.html

The Reason

Catalin Tecaru — Mon, 13 Jul 2009 14:46:58 +0000

The reason behind the creation of this blog is for me to successfully learn spread betting. As I don’t have any real money I opened a demo account on Interactive Investor. They are giving me 10 000 £ of “paper money” with which to trade as I would with my own capital. My goal is to turn this 10 000 £ into 20 000 £ in the next 3 months untill the end of October 2009 by using spread bets on various companies or indexes. The plan is to use part of the money on mid term trades and a another part on short term bets. More on the strategy in the next posts. Wish me luck.