I have decided to stop the weekend HSC updates and start posting charts of some of my Forex trades I have taken during the week. I think this blog showed that the method taught by the Home Study Course is indeed profitable. However in times of sideways moving markets it will give more entries (than in an upward trending market) that result in a loss. Personally I believe in times like this it is best to sit on the sidelines, use smaller position sizes or look for different charting techniques and shorter timeframes. The challenge here is that you will miss the point when the market starts trending up again.

I will however continue to report on the current positions in the portfolio. As I am using NinjaTrader for my intraday charting I have also decided not to renew my Market Analyst subscription and have to base my exit criteria on trendlines rather than the trendband. I have found that when it comes to intraday charts NinjaTrader is much more responsive and reliable than Market Analyst. The only downside is that it is lacking some of the Home Study Course tools like trendbands or Gann swing charts.

There are a number of stocks that I have added to the portfolio since the last update. They are ANZ, BOQ, ORI, WES and WPL. I also closed the position in TEL as it had two closes below the uptrend band. The transactions were:

17th October: Buy 472 ANZ at 21.20
17th October: Buy 1250 BOQ at 8.00
17th October: Buy 401 ORI at 24.93
17th October: Buy 313 WES at 32.00
17th October: Buy 281 WPL at 35.65
28th October: Sell 5848 TEL at 2.00 for a profit of 16%

Before I finish this post a big thank you to my readers out there for your support and your comments. As I said I will continue the blog, just in a different format.

This leaves the portfolio as follows:

Before I went away I mentioned that I would like to change the way I present the portfolio. Rather than always buying 10k worth of shares, I will use a percentage of the capital I have available for any purchases. This will give a better picture about performance as any profits are re-invested. Unfortunately having just returned from holidays I have been a bit busy this week and will set this up in the next two weeks. So for now any news buys will still be added to the existing portfolio. I will however transfer them to the new one once everything is set up.

Last Monday we added 5 stocks to the portfolio they were APA, AXA, HVN, STO, WBC. Three of them continued to rise slightly while the other two retreated. Still early days though. Looking ahead I have another 5 stocks joining the portfolio on Monday as they are fulfilling the buying criteria according to the Home Study Course materials. They are ANZ (Australia & New Zealand Bank), BOQ (Bank of Queensland), ORI (Orica Ltd), WES (Wesfarmers Ltd) and WPL (Woodside Petroleum).  It will be interesting to watch if the Australian banks follow the European trade and open sharply lower on Monday.

The transactions for this week were:

10th October:  Buy 2433 APA at 4.11
10th October: Buy 329 AXS at 30.44
10th October: Buy 4425 HVN at 2.26
10th October: Buy 829 STO at 12.07
10th October: Buy 470 WBC at 21.29

Before I finish today’s post, I am just wondering if any of you have tried posting to the Basic_Charting forum lately? I have written two posts lately and none of them has been published yet (in the last two weeks). Anyway feel free to use this blog for any questions you may have.

The portfolio as of 14th of October is

Looking through the charts this weekend I could see many bullish bars indicating the same. And for the first time in months there are a number of stocks ticking all the boxes (according to the HSC) for a buy. If the upcoming week remains positive there will be plenty more joining in. Whilst the market is volatile though, it might be worth to look at a slightly different strategy to determine the stop loss. David teaches to never risk more than 15% on any given (HSC) trade and if the turning point is closer, use the turning point +1% as the stop loss. There is nothing wrong with this approach, especially if you are just starting out.

A possible variation is that you always take the turning point + 1% as your stop. The turning point is the last most significant low and this price has a high probability of being future support. Once this is taken out you don’t want to own the stock anyway. However if this is 20% away from your entry price you don’t want to stop yourself out to early. If you take this approach, you should first determine how much money you are willing to spend to find out if you are right. This is usually called your risk, but I see it more as your investment. I have better results when I focus on the investment rather than the risk.

As mentioned before I have a number of stocks fulfilling the buy criteria according the HSC. They are APA (APA Group) – 14%, HVN (Harvey Norman Holdings) – 22%, STO (Santos Limited) – 15.67%, WBC (WestPac Banking) – 16% and ASX (ASX Limited) 15%. The percentage is the difference between the buy price and the turning point assuming the price opens on Monday at the previous trading day’s close.

When you have multiple buying opportunities and only funds to buy one or two stocks you may also look at possible resistance. Apart from the usual fib levels you want to look at significant highs and lows in the past. Looking at APA for example you will see that the current price (4.12) is closer to the turning point (4.43) that started the last downtrend than to the last low (3.53). Also the absolute high is at 4.89. This does not mean the price won’t go significant higher than that, but you have areas of possible resistance relatively close to your entry price and in my personal opinion this gives you a relatively low risk/reward ratio.

It’s good to back and I am looking forward to a very prosperous year ahead.

The portfolio as of 7th October is:

Anyway after receiving a couple of messages if the blog is still active I decided to see how the portfolio was doing and apart from two more sells there wasn’t any activity. As mentioned in the last update ILU had two closes below the uptrend band and we sold it on the 15^th August for a total profit of 176%. If I had bought back the half that got sold early on (profit taking) and adding to the position along the way, the profit would have been much higher. I will keep a closer look at this in future. The second was DOW, which stopped us out last week for a loss of 15%.

The transactions were:

15^th August: Sell 1370 ILU at 15.93 for a profit of 176%
5^th September: Sell 2584 DOW at 3.52 for a loss of 15%

I now have most of the ASX100 stocks in a confirmed downtrend (according to the Home Study Course) and haven’t identified any buys for this week.

The portfolio as of 9^th September 2011 is

In times like this it is easy to get emotional about the market and to feel like the market has turned against you. Let me tell you this is the natural cycle of the market and even moves like this present lots of opportunity to make money for people that keep their cool. I know this is easier said than done. The actual opportunity to use this period to make nice profits may not come immediately and it might take weeks, months or even years for you to benefit from this move.

What I mean is not part of the Home Study Course and I won’t elaborate too much at the moment, but if you understand what price action is, it is definitely worthwhile to watch your bars when price returns back to any major low or in the current case to big moves up or down.

If you only trade using the Home Study Course it is important not to get discouraged by a string of losses. The last 12 months have been very challenging as the market has been trending sideways and the HSC works best in a trending market. Now go back in your charts and you find that most times in history we had trending markets and the probability is high that the next cycle will be trending again. The entry rules of the HSC prepare us to be ready for the next move and make sure we don’t jump the gun.

Enough said, back to the blog portfolio. Although most stocks recovered their heavy losses from the start of the week, it was enough to get stopped out of a further two positions. CGF (Challenger Limited) and PRY (Primary Health Care) both hit the stop loss. I also have ILU (Iluka Resources Ltd), the biggest winner thus far, having two closes below the uptrend band triggering a sell on Monday. ANN (Ansell Ltd), DXS (Dexus Property Group) and SKI (Spark Infrastructure Group) also have two closes below the uptrend band, but are not part of the portfolio. Needless to say that I haven’t identified any stocks meeting the buy criteria.

These are the transactions for last week:

8th August: Sell 2058 CGF at 4.40 for a loss of 9.46%
8th August: Sell 2959 PRY at 2.87 for a loss of 15%

We are leaving to Europe this week and the next update could be delayed. Please check back regularly or subscribe to the RSS feed (top right corner) to be notified of any updates.

The portfolio as of 12th August is:

What a week, as I was reading in one article – it was a blood bath. I wrote last week that we will see either big falls or a big gains after the US debt ceiling vote. Although many private investors would have thought otherwise (after the vote), markets had their biggest one day fall since the beginning of the global financial crisis and there are doomsayers saying this one will be worse than the last time. Let’s wait and see and get everything into perspective. The overseas markets had a fantastic run since June last year (not necessarily the Australian market though). And so far we have seen just over 38% retracement of the rise for the Dow Jones index. This is a very normal retracement for a cycle and we need to wait and see how much further it will fall.

So much to the global markets, now we have a look how this affected our portfolio. As you can imagine with a number of positions already in the red, this week triggered a number of stops. We got stopped out of AGK (AGL Limited), OST (OneSteel Ltd), SGM (Sims Metal Management) and WOW (Woolworths Ltd). And if the bears continue to dominate over the next couple of weeks we will close further positions. I also mentioned last week, that we had 4 stocks fulfilling the buy criteria. I was looking at them again on Monday morning and was thinking that it is not worth the gamble with the uncertainty of the US debt crisis. For the record all buys would have resulted in a loss with the stop being hit this week.

Not surprisingly I didn’t identify any stocks meeting the buy criteria this week and I noticed ORI (Orica Ltd) having two closes below the uptrend band.

The transactions for last week were:

5th August: Sell 682 AGK @ 13.42 for a loss of 8.45%
5th August: Sell 4975 OST @1.71 for a loss of 15%
5th August: Sell 526 SGM @ 16.17 for a loss of 15%
5th August: Sell 368 WOW @ 25.41 for a loss of 6.37%

On a private note, we are going on a Europe trip for until beginning of October. I will do my best to continue regular updates to the blog but I might miss a week or have the update delayed.

The portfolio as of 5th August is:

Going through the stocks this evening I didn’t think I would find any that meet all the buy criteria according to the Home Study Course. I was quiet surprised to see a number of stocks ticking all the boxes. They are IPL (Incitec Pivot Ltd), BEN (Bendigo and Adelaide Bank Limited), OZL (OZ Minerals Limited) and SEK (Seek Limited). There are also two stocks that are already in the portfolio that still tick all the boxes. They are DOW (Downer EDI) and CGF (Challenger Limited). I will add the new ones to the portfolio next week.

I also plan to start a new portfolio over the next couple of months and will add the new buys as well. In the new portfolio I will start with a fixed dollar amount and invest 5% or 10% of the capital in new purchases. This will give us a more accurate performance of the portfolio.

There had to be some negative news as well. MGR (Mirvac Group) hit the stop loss during the week and consequently got sold.

I didn’t identify any new stocks meeting the sell criteria, although I have to admit that I went through them quickly today. I do my best to be as accurate as possible in applying the rules however there is always the chance that I have missed something or misinterpreted a chart.

The transaction for last week was:

25th July: Sell 7353 MGR at 1.18 for a total loss of 13.23%

The portfolio as of 29th July 2011 is:

Our open positions are gaining momentum as well, with the unrealized profit up from 15.12% to 19.38% without adding or selling any stocks. It has been a quiet week and I couldn’t identify any additional stocks meeting the buy criteria for next week. However I have a number of stocks which I will watch closely next week as they might meet all the rules next week.

I have also noticed IOF (Investa Office Fund) having two closes below the uptrend band, hence meeting the sell rules if you have bought the stock following the HSC rules. I’ll be also watching for a possible add position of one of our latest additions TEL (Telecom Corporation of New Zealand Limited). TEL had a big rise last week and is up to almost 24%.

With no buy or sell transactions for last week, here is the portfolio as of Friday 22nd July 2011:

The Euro zone is still under a lot of pressure, with Italy being the latest country in difficulties and the situation in the US does not look very promising either. There are doomsayers  who reckon that what we saw during the financial crisis is nothing compared to what we can expect if the USA defaults on their bills. S&P already indicated there is a good chance they will downgrade the credit rating of the USA.

It just does not look like the market itself beliefs this and they are expecting another last minute parachute. The markets are moving cautiously lower and once we see a positive resolution should start a nice rally up.

Enough about this let’s get back to our portfolio. Two weeks ago I mentioned CGF (Challenger Group Limited), OST (OneSteel Ltd) and PRY (Primary Health Care Ltd) as potential buys should their monthly swing turn up. Well at the end of last week, their swing was up and I added them to the portfolio on Monday. Whilst the weekly swing for CGF and PRY are down at the end of this week, OST closed with an inside bar and therefore still ticks all the boxes for a buy according to the Home Study Course (HSC).

I also have two stocks that had two closes below the uptrend band. They are CEU (Connect east Group) and RHC (Ramsay Health Care Ltd). Apart from this I didn’t identify any other stocks that ticked the boxes for either a buy or sell.

The transactions for last week were:

11th July: Buy 2058 CGF at 4.86
11th July: Buy 4975 OST at 2.01
11th July: Buy 2959 PRY at 3.38

The portfolio as of 15th July 2011 is:

Back to our share portfolio and the HSC. As mentioned last week WPL (Woodside Petroleum) had two closes below the uptrend band and hence triggered a sell on Monday. What I forgot to mention was that it showed already weakness early May triggering selling half of the position with a small profit. Overall though WPL resulted in a 3.6% loss. For this week I also have OSH (Oil Search Limited) with two closes below the trend band. For anyone that didn’t agree with my take on TCL (Transurban Group) it has now very clearly two closes under the uptrend band.

There seems to be light at the end of the tunnel. I have a number of stocks that potentially meet all the buy criteria during this week. All of them have their monthly swing still down, but as soon as it points up, all criteria is met. They are: CGF (Challenger Group Limited above 4.95), OST (OneSteel Ltd above 1.92) and PRY (Primary Health Care Ltd above 3.48 and below 3.57).

Here are the transactions for WPL:

2nd May: Sell 112 WPL at 46.61
27th June: Sell 111 WPL at 39.93 for a total loss of 3.6%

The portfolio as of 1st July is