Trading Update - A lesson in drawing Trend lines

I was filled today on my Wellstream (WSML.L) order as the market continued to react to Swine Flu fever!

I've been drawing trend lines on the graph all day (I know, I am trying REALLY hard not to look at these blo*dy things during the day but...). Take a look at the trend line defining the bottom of the upward channel that I drew on Wellstream yesterday when working out where to place my Buy Limit

Check out the badly drawn channel base trendline - Note how it is drawn directly through a couple of candles....

Now, check out a much more accurately drawn trend line, that doesn't cut through candles. Note how the stock respected the trendline today

As you can see from the second graph, Wellstream hit support today at/around 505 which, looking at the second graph, does more clearly indicate the channel base.

LESSON LEARNT: Draw your trend lines against what you see, not what you want to see! I used to used a Line in Close graph to draw Support and Resistance levels. I'm going to experiment with this approach once again.

Check out the updated portfolio to see how badly Wellstream behaved on its first day in the AtticFund!

Trading Update - Wellstream

Today Wellstream (WSM.L) traded down on very low volume.

The stock looks to be consolidating and a pullback is very much on the cards.

Since 17th April average daily volumes are down to less than 10% of average April volumes. But what does this mean? Well, from my point of view, it means that the 'prices moves' the stock has made since the 17th April have no real conviction behind them (eg there is no professional money in the market) and more importantly, the large down day on 20th April was not a reversal, but a pullback.

So, revised Wellstream order

Buy Limit @ 535p (A minor pullback required for a fill)

Stop - 485.85p (Well below potential support - giving this trade some room)

Target - 606.85p (My initial target - depending on how/if it gets here, I'll make a decision)

Position size - £3.75/point. (£3.75 * 53pts = £198.75)

Max risk - £198 (less than 2% of AtticFund)

Trading Update

Just a quicky tonight.

I've decided to go in at the market with Centamin, so have cancelled the limit order from yesterday and will place a market order tomorrow - details will be posted over the weekend.

I have also amended my Wellstream order, in an atttempt to get filled.

My Revised Wellstream order details;

Buy Limit @ 542p (A VERY minor pullback required for a fill)

Stop - 500p (Not much room on this trade now, but if it hits 500 then I got the direction wrong))

Target - 600p (My initial target - depending on how/if it gets here, I'll make a decision)

Position size - £4.50/point. (£4.50 * 42pts = £189)

Max risk - £189 (<2% of the AtticFund)

Trading Update - 2 new orders

Today I placed two buy limit orders:

Centamin Egypt (CEY.L) - Having closed my previous position to protect a profit, I placed a buy limit order today. I've reduced the risk that this position carries as (like I've stated before) I'm keen to hold onto this for as long as I can. Their first gold pour is due in early June, but I'm assuming that as this nears, this will be priced into the market, so should see a steady rise.  See below for order details

My Centamin order details;

Buy Limit @ 51.5p (A minor pullback required for a fill)

Stop - 45.03p (Well below potential support -giving this trade some room)

Target - 60.03p (My initial target - depending on how/if it gets here, I'll make a decision)

Position size - £15/point. (£15 * 7pts = £105)

Max risk - £105 (1% of The AtticFund)

Wellstream (WSM.L) have enjoyed a steady bull run since late February. I should have got involved earlier, but it looks to be consolidating before making another move, a nice potential entry point.

My Wellstream order details;

Buy Limit @ 503p (A minor pullback required for a fill)

Stop - 431.7p (Well below potential support - giving this trade some room)

Target - 600p (My initial target - depending on how/if it gets here, I'll make a decision)

Position size - £2.65/point. (£2.65 * 75pts = £198)

Max risk - £198 (2% of The AtticFund)