I mentioned earlier that I joined the VirtualShares..com.au trading game and was part of the Sharetrader group (only about 10 players joined in this group). 

The game finished after 42 days and it was an interesting ride.  I managed to fare not too badly, especially playing against some more senior members of the sharetrader forum.

I ended up $2,392 and 2nd player in the group.   Two trades stood out for me, the first being FCL which I entered at 1.13, and not sticking to my plan held far too long, clocking up a $1400 loss - well below my stop loss point.

Admittedly, the market during the game just got hammered. 

My best trade, was slightly bit of a punt and I can't even tell you why I picked it, except for getting a buy signal on my system.  Thought I'd try a smallershare, and in this instance it paid off. 

I bought ALT at .02 and it increased to 0.09 and started to retreat. So I called it quits and got out at .06.  This trade gained me $3,600 and put me back in the running to at least finish positive!

From the ASX
During the Game period (August 5 – November 14) we saw a lot of volatility and uncertainty in the markets. Over this time the All Ordinaries (XAO) lost 26%. With the market in a significant downward trend, it has not been an easy time to invest. This is reflected in the average player value which was $39,296, with less than 3% of players finishing the Game in profit.

My results:
Your performance
Your current portfolio (live)
Portfolio total $42,530.59
---------------------
National performance (at close 14/11)
National leader $68,791.68
National average $39,296.10
Your ranking (at close 14/11) 
National ranking 3691 of 16018
State ranking 649 of 3033

The markets have been all over the place and when you think they can't go any lower, they inevitably do!  Worst bear market drop in history - yah, glad to have been there for that one.

Seems there will be some great opportunities for wealth creation over the next few years, or at least that was the theme being pushed at a recent property investors conference I sat in on recently.

My ASX account is suffering none the less.  I figured I would jump in boots and all considering it was there to practise. In real life I doubt I would have been that brave. 

So I'm now sitting at about $45,700, so a less than 10% drop when the index has lost 15%. 

I've discovered another virtual game here:   http://www.virtualshares.com.au  which has some advantages over the ASX one, in that you're not restricted to just 100 shares.   And you can see what the leaders are actually investing in, which is quite interesting.

I have an account in this game, and so far it's week 2 and I'm up 1%. 

It's been pretty frenetic times on the markets lately.  The ASX has reached 5-year lows.

Thought it was about time to update my trading diary.  Here is a summary of my progress (or equity curve) - which I don't think I'm doing too badly.  I do have positions still open, that have yet to break their stop loss.

HSP, SGT and FGL.

Meanwhile the ASX 200 which started at 4969 at the start of the game (7 Aug) closed at 4618 yesterday (about 7%); but dropped as low as 4391 interday.

If you were taking the same losses on your 50k account you'd be down to $46,500  (which is pretty close to the National game average - see below).

Luckily executing stop losses has proved effective in these hard times.



The leaderboard is changing regularly, and detests to some contestants who obviously buy and hold.  If the market falls dramatically, my position increases but if it begins to rise I drop back.

Your current portfolio (live)
Portfolio total $49,143.24

National performance (at close 07/10)
National leader $64,223.87
National average $46,456.89

Your ranking (at close 07/10) 
National ranking 2880 of 15682
State ranking 530 of 2961

Your current portfolio (live)
Portfolio total $50,543.18
>> See details
National performance (at close 11/09)
National leader $57,506.77
National average $48,074.32
Your ranking (at close 11/09) 
National ranking 3857 of 15230
State ranking 703 of 2866

Well, well, well.  What can I say. The market has been all over the place the past week - up, down.

I came across my first delemna in respect to Stop Losses.  When you are trading CFD's, you can move your trailing stop, say each night, and then basically forget about monitoring the market as you'll be stopped out automatically (give or take slippage) if your stop is hit.

However, since I'm trading shares I can only place a stop loss out of the market; ie a mental stop loss in my records.  So I have to be watching the market to activate the stop and get out of a position.    Which, with a pretty full on 'real' job, I don't have the time to do.

So my position in BHP, which by the way was doing extremely well, took a huge dive on Tuesday morning wiping out any gains.  That'll teach me to start having grandeur ideas about raising my 3% goal target - just like a slap in the face with a wet fish.

Needless to say I then ran into some trouble existing on my stop loss, due to not being able to watch the markets. My stop was sitting at $39.30; but I manually sold at $37.50.  Darn. A loss of $248 - however, well within my 1% risk of $500. 

The temptation  was just to let it run and see if it would 'come right', and the next day the market did rally and BHP ragained some ground.  But as of yesterday, it had dived to a low of $36.05 - so it proves you need to cut your losses early as holding on would have increased my loss to over $600.

So in summary this wasn't a good trade in several ways;
1)  still trying to get my head around activating manual stops
2)  didn't follow the plan (which may need adjusting to take account of 1).

With ASX:BHP the drop usually happens on the open, which then means you endure the whole day before executing a sell order.

I also sold out of ASX:AOE on the 5th Sept at $2.90, copping a loss of $320, which again was originally in a profitable position.

I'm of the opinion in this market, that perhaps you need to lock in profit as soon as any decent increase occurs.  This does go against the 'let your profits run' adage that most traders bandie about - however, that might work fine in a raging bull market, but does it actually work at the moment?  (That's a rhetorical question, 'cause I don't know the answer).

I've jumped right back in, and have the following holdings still open:
AMC STO  HSP 
BLD  IRE  GDY 
Will post the breakdown of entries shortly.

Have been geeking out and putting close of day stats into a spreadsheet to track my performance. 

Remembering that my iniital goal was to increase my account by 3% over the 3 months, I may well have to increase it.

The markets have been continuing on a slight uptrend.  BHP went ex-dividend on the 1st and fared ok, but subsequently dropped over 1% yesterday and nearly hit my stop loss.  We're hanging in there, but today may see us stopped out of this position.

Now that the trend is at least in the right direction, have decided to stop being quite so conservative and jump into a few more shares - afterall, the point is to practise putting the discipline of money and risk management to the test.  Being patient is so not in my nature.

I've been very restrained up until now, it's devilishly tempting when you have money in your account not to jump in immediately and trade anything that moves!

So on the 1st September Amcor showed an entry signal which I decided to act on.  Details are:

Share ASX:AMC: 

Entry Price:              $5.44

Initial Stop set at:     $5.10  (prev 2 days low)         

 

Risk Management for this position

% to risk (max 2%):     1%  

Risk Amount for this trade:   $500

Total amount currently at risk (not to exceed 6%):  4% (4 trades open)

 

Money / Capital Protection:

Capital:         50,000

Each position to not be greater than 15% (max 20%) of total capital: $7,500

 

Number of shares to buy:   1250

Total investment:      $6,800

Amount at risk:          $425

 

How many other positions open with ISL?  none, all others using TSL
Is the sector rising? Y  (Materials)

Any other shares in this sector? Y, (BHP)

Well the good news is that my account is now up 6.5%, albeit on the back of a couple of positive days on the ASX200 anyway.

Perhaps my initial goal of increasing my account by 3% wasn't ambitious enough.  But I guess the real skill comes down to actually keeping the profit!

I've raised my stop losses accordingly on all three shares I hold.  As I'm sure this mini-rally will not last, just as they haven't in the past.

I've been reluctant to invest in anything else as the ASX200 hasn't really showed a clear uptrend, so the markets are hard to pick.  However in saying that, it was interesting to read the ASX's hot and cold stocks report for the game.

Out of 100 companies, only 36 have reported a decrease in their share price up to 27 August.  The remaining 64 have either stayed same or increased over this time.  Arrow Energy, Cochleah and CSR have all increased over 17%.

So even though the ASX200 hasn't looked that flash to invest in, some companies have been doing ok (or better). Again, it makes more sense to cut your losses and find a share that is performing - because they are out there, even nowadays.

Game update:
Your performance
Your current portfolio (live)
Portfolio total $51,267.73
>> See details
National performance (at close 28/08)
National leader $58,980.57
National average $50,965.04
Your ranking (at close 28/08) 
National ranking 6557 of 14667
State ranking 1312 of 2774
>> see details

The market has been up and down, some days following the US and some days not.  BHP Billiton (ASX:BHP) has performed well and increased 5.9%.

I have changed the initial stop on BHP to a trailing stop loss (2ATR).

I was thinking that I had not really set any goals for this period, so the target will be to increase the $50,000 portfolio by a minimum of 3% over the three month duration.

I have also been establishing some better guidelines to adhere to when entering a stock, all part of the bigger picture or trading plan.  Here's what I've come up with, reproduced for BHP.

Share BHP:  Chart

Entry Price:              $38.24

Initial Stop set at:     $36.02  (prev 2 days low)         

 

Risk Management for this position

% to risk (max 2%):     1%  

Risk Amount for this trade:   $500

Total amount currently at risk (not to exceed 6%):  3% (three trades open)

 

Money / Capital Protection:

Capital:         50,000

Each position to not be greater than 15% (max 20%) of total capital: $7,500

 

Number of shares to buy:   255

Total investment:      $9,751

Amount at risk:          $566

 

How many other positions open with ISL?  1^st position open

Is the sector rising? Y

Any other shares in this sector? N


Portfolio Update:
Your current portfolio (live)
Portfolio total $50,551.98

National performance (at close 26/08)
National leader $57,865.08
National average $50,462.80

Your ranking (at close 26/08) 
National ranking 6875 of 14556
State ranking 1386 of 2756