Trading Trail #20: An Admirable Admiral Profit

In my trading trail account, my Admiral position finally stopped out when the price fell today to trigger my guaranteed stop order at 892p. At first glance it netted me a £89 profit, but that’s not the whole story.

When I saw that it had fallen to buying price 899p, just 7 points short of my 892p stop-out level, I decided to pyramid an additional position on the basis that for only £7 extra risk I could potentially have double the position size working for me on the upside. Of course, it failed, which reduced my profit from £89 to £82.

I then went back through my account to calculate how much my dalliances with Admiral had cost me in total since I started playing with it.

In total this stock had cost me £1.20 in financing charges and had notched up a previous net capital loss (a £16.90 profit minus a £21 loss) of £4.10.

Taking everything into consideration, my final profit from Admiral was £76.70.

It might not sound like much profit accrued over three weeks, but a profit is a profit, and of course it would have been ten times bigger if I had been bold enough to have used 10x bigger position sizes — but this small account simply won’t stand that level of risk.

This stock has now gone onto my Stop-Out List, but I’m in no rush to buy it back when I can better utilise the freed-up trading capital elsewhere.

Tony Loton is a private trader, and author of the book “Position Trading” (Second Edition) published by LOTONtech.