Covered in this months newsletter:

• Check out my live video
  
  
• Newcastle here I come
  
  
• Current market update
  
  
• Check out my top winning and bottom losing trade over the last month
  

If you have recently subscribed to my website or for some reason you did not receive my last email you can view the previous newsletters by clicking here.

I have had a fabulous holiday with the family in October and have also been to Melbourne to present at the ATAA meeting. It was full house event and I enjoyed sharing what I do and meeting the ATAA members and my Melbourne clients. You can check out the photos of the event on my Blog:

www.smarttrading.com.au/index.php?q=blog.html

I will keep this BLOG updated with news regularly and links to new videos as I create them.

Check Out My Video

It's been a long time coming, but I have finally taken myself outside my comfort zone and borrowed a friends video camera and put together a video, which is live on my website. So you can meet me online, hear me speak and watch me show you how I run a market scan and do what I do each day as part of my trading routine.

You can check it out on the home page of my website – www.smarttrading.com.au

I will be producing more of the screen recording videos that is included in this video and adding these to the Smart Trading Plan & System Development online course in the coming months. Which will take the course to the next level so you can personally see how I set everything up that I teach through watching a video of my computer screen. Once all the videos are completed and live the course price will rise into the new year. So you still have a chance to get in at the current prices and you will get access to these videos as they get uploaded to the course.

Newcastle Here I Come

My next presentation is going to be in my local city of Newcastle (NSW) at the Australian Technical Analysis Association (ATAA) monthly meeting, so feel free to come along if you are close by. I will be presenting on the Power of CFDs and showcasing some of my recent CFD trades. The details are below:.

Date: Saturday, 12 December 2009

Venue: Kahibah Bowling Club

Time: Meeting commences at 10.00am and finishes at 1.00pm.

Cost: Visitors can attend the ATAA meeting once for free. There after to attend again there is a once off fee of $30 per meeting or you can join the ATAA.

Click here for more information.

Market Update

What is the market doing? Is it going to break up to new highs or double top. Check out the chart below, which shows how it fell from its highs at the end of October, breaking its daily uptrend line, but has recovered and is now treading water with a cluster of candles all around the 4800 mark.

Currently on the daily chart the market is trending sideways and on the weekly chart it is still in an upward trend. You can see the weekly chart below, which shows the ASX 200 still trending above its 30 week moving average and above its upward trend line. Which is a good sign.

There is some room for the market to potentially fall back and still continue to maintain this longer-term trend in the weekly chart. But as for the shorter term trend it is mixed and the market has found support at the 4500 point mark and resistance at its highs of 4900. I have been getting mixed signals on the long and the short side. When the market churns sideways like this it is hard to know which direction it is going to break and it does have an effect on my medium term trading.

The move downwards has not affected any of my long-term weekly system trades, which I trade off weekly charts with a wider stop loss. But it did affect my medium term swing trading system. Where I had a few stops hit and also acted on time stops as shares just simply were not moving higher.

I have since opened a few trades in both the long and short direction, but I am not fully invested. This is a time where I do become fussy in the market and wait for clear breakouts as well as some form of market direction for my daily trading system, to be confident as to which direction the market is going.

One benefit is that Gold has broken to all time highs and this has benefited our resource stocks. So there has still been a few nice trending shares on the upside in this sector of the market. Whilst other sectors have become stagnant and directionless.

Checkout Some of My Current Trades

I would like to share two of my CFD trades with you. One of my top winning trades from the last few months and one of my losing trades so you can get a feel for both types of trades. Because not every trade I undertake in the market is a winner and not every trade you undertake will be either. The goal is to ensure you win big on the big winners and keep your losses small on the losing trades. Then you will have a lot of trades in between that you make a bit on and lose a bit on.

There will always be a few outstanding trades that make you the big money and this was one of my recent ones on Centro Property Group. See the daily chart below with the trade marked out. The small blue arrows show the entry triggers generated by my system and the line underneath is my trailing stop loss that I tightened as the trade progressed.

I entered CNP on 13 August at 16c. The share had come up in my daily trading system the day prior and I did not see it that day as I was away. I saw it that evening and liked what I saw, as it had broken a resistance level with strong volume. I knew I would not be around the next day, so I set a buy stop order in the market so that if the share rose to 16c or above to enter me into the trade. And I linked an If-Done sell stop to the order, so that if the trade went through the stop would activate. Which it did the next day, as the share opened at 14.5c and rose above 16c. My trade was activated into the market at 16c and my stop loss then automatically set.

These stop entry orders are only possible with CMC Markets through the exclusive Smart Trading deal I have setup with them, I set up this deal so I could get access to these facilities for my own personal trading and it is now available for anyone to access when you open an account under Smart Trading. You can read more about the deal from this web link:

www.smarttrading.com.au/index.php?q=cfds.html

Centro Properties did move higher after my entry and my stop moved up, but then it traded sideways for a few weeks before taking off and doubling in price. When the share price rose sharply, I was now in the nice position of windfall profits. My windfall profit strategy is to sell half or tighten my stop. As the trade itself was a smaller position in size than my other trades, I decided to stay with it and tighten my stop loss. My stop was tightened from the purple line to the blue line on the above chart. If it had of been a larger position in size, I would have most likely sold half.

The share then fell back before getting support at approximately 30c. It moved higher once again and when it fell away at the same price point at 42c with a down candle, I decided this time to sell half. The share had tried again, tested the high price level, rejected it and now I had a second chance to take windfall profit action and this time sold half the trade. I then tightened the stop on the remainder of the trade, so that if it failed to move higher, I was happy to exit the final part of the trade. I exited half on 9 October at 37c and the final half when it hit my tighter stop (green line) and I was taken out on 28 October at 32c.

I held this trade for a total of 76 days and made a return of 131% on the total trade size and 1140% on the initial 10% margin outlay for the CFD of this trade, which was the capital I was required to put up to open the trade.

Now that is wonderful trade and one of the few that will make me my larger profits for the financial year. But not all are profitable. I want to show you how I handle a trade that fails. Below is a trade that I undertook on Roc Oil and this was my largest losing trade over the last month.

The chart shows how I entered the share when it came up in my system on 13 October. It was a beautiful looking entry. Share had moved as high as 98c in early June, fallen back and found support at 60c. It then broke above its daily down trend line and made a new high with a beautiful long white candle and strong volume above its average. It moved a little higher after my entry then fell back with the market drop at the end of October, dipping below my stop loss, at which point I was automatically exited out of the trade 19 days later at 59c.

Unfortunately, the share has not moved any lower since my exit, but it has also not moved higher either. Sometimes you get taken out of trades when the market has a strong fall, like it did at the end of October. I limited my loss to the risk percentage that I set out to lose and lost a total of -14% on the total trade size and -139% on the 10% margin I was required to put up to open the trade initially.

As you can see from these two examples, the winning trade far out weighs the losing trade and the goal is to get on board a few big wins each year. Unfortunately, I just don't know which ones these are and I have to open a serious of trades and those that fail, I exit, those that do well I stick with and continue to move up my stop as they progress my way and follow my trading rules if certain things occur along the way.


Until next time, enjoy, learn, grow and prosper and consider taking advantage of my Smart Trading Plan & System Development online course before the price rises, if you have not already done so.

Cheerio

Justine Pollard
Author, Private Trader & Trading Mentor
'Discover the Smarter way to trade'
www.smarttrading.com.au
justine@smarttrading.com.au

Smart Trading Pty Ltd is a Corporate Authorised Representative, AR No.336312 of CDM Pacific Pty Ltd AFSL 223682

The returns reported are provided for information purposes only. Results of past performance are no guarantee of future returns. No assurance is given that you will incur any profits or losses in your own trading and it should not be assumed that you will experience results comparable to those as reported. Any trade examples listed within this website or associated material are either ficticious or historical and in no way should be interpreted as a recommendation to invest in any particular stock, CFD or investment. Smart Trading Pty Ltd as Authorised Representative No.336312 of CDM Pacific Pty Ltd AFSL 223682 assumes no responsibility for your trading and investment decisions or subsequent results. There is a high degree of risk involved in trading and as such we always recommend that you seek independent financial advice by a licensed professional prior to making any investment decision.