Tuesday, 8 June 2010

Changed my mind ... again!

My first instinct upon looking at the "hourly triple top pattern" was to short. Then I looked closer, this looked more like some kind of ascending triangle type pattern - the support was clearly rising.
So I decided to exit my short, which I managed without losing any money and entered a long position at 9864. My thinking? A possible short squeeze was on the way and if any move that could break above 9885 could force short positions to start covering and a hold at 9900 would put the shorts in serious trouble.

Admittedly my trading plan was not "well defined" but I figured a drop to 9810 would be a very bad sign. Although I was very tempted to increase my position when the index dropped to ~9840 I decided to hold fire - after all, one can never be sure.

Contrary to my normal reasoning when the index broke above 9900 and held there I decided to "play with the house's money" and increase my position.

Eventually I closed both at 9928. There was more mileaged to be gained but I played my "10 percent" rule. When the profit reaches 10% of the fund - close the position (similar to my old poker rule of leaving the table after a doubling or tripling up). Actually it achieved 23% but it's learning to ride the wave as it occurs.

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