Monday 21 June 2010

The 10% rule - broke it again!




Made a good trade to order a buy at 14813 which was based upon a prediction looking at how the stochastics were based.
Checked the status of the trade at 8:20 to see it had gained one cent. Broke my 10% rule (profit stood at +20% in actual fact) and tried to increase at 14882 only to see the pair continue to drop away. Sensibly only increased by 0.5. Finally closed for no profit at all. Well - worth a try, however the drop from 14915 to 14750 was surprising. Because of the emergency budget? I admit I was trying the buy on the rumour, sell on the news - just didn't sell early enough.
The DJ closed down today, losing about 200 points from the open which had gapped up. Since the gap has been filled is this an exhaustion gap? The futures climb was due to China agreeing to loosen the yuan's peg to the dollar. My feeling is the rally needs consolidation, a bottom between 10345 and 10450 would be a good base for the next leg. Interestingly enough it closed just above the 50 day SMA and just under the 200 day SMA
I'd like to point out that I'm not a great believer in the "global recovery" and believe we could be looking at a September crash but I'm willing to play this rally. Don't fight the trend - that and the number of doom and gloom type comments on CNBC ;-)

Also made a dreadful error when I typed in 5 instead of 0.5. The only good point is that I had the nerve to hold on and not panic and immediately close. Very, very lucky though as it coincided with Wall St opening which meant a positive spike, I could have held on but damn lucky I didn't. Is this my instinct kicking in - telling me to get out?

I've circled something which may be important - 3 spikes before the final capitulation

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