Wednesday, 14 July 2010

Also must point out ...

that three days ago I made a reasonable decision to short EUR against SGD (singapore dollar) and an excellent decision to go long on cable at the exact point it rallied, but sold out the cable trade with a very small profit whilst keeping the EURSGD short running. Unfortunately both rallied on the back of a bond sale/risk appetite increase and I was faced with the gutting sight of the GBP on a 1.5 cent rally whilst my short was closed out with a hefty loss.
Backed the wrong horse -"ran my profit and cut my losers" ho hum

I actually learnt something

I may have actually learnt something from my previous experiences!

Didn't do anything on the forex or the indices today, but noticed that Barclays had gapped up so went short. The spread on IG is so huge ended up making no profit whatsoever, but made a little on the other a/c

With my previous experience of the behaviour of the DJIA at the end of the day I went long at 10334 (a little early) then again at 10318 which was better but a little as could have got in at 10310. There was a moment when the profit was at 70 when I could have sold, but I hung on hoping to see 10400. It never got there and in fact dropped to breakeven and it took all of my willpower to stick with the plan.
And the plan? Well, I have noticed that after an early dip there seems to always be an end of day rally - I believe this to be index futures short covering rather than actually share buying but I can't be sure. Also holding shorts over night in a rally is a bad move and shorts must cover before the closing bell. I also believe the rallies are mostly futures trades and less about the underlying shares. The underlying psychology of shorting is that I think it's more difficult to get right than going long and at the end of the day (meterphorically) shorts have to close out.
Some profit and I didn't hold out right to the bell so not a bad result in the end.

Friday, 9 July 2010

Mixed day

Better decision to short cable

Poor decision to short DJIA in the evening - the market loves round numbers like 10200 and despite knowing this and saying to myself still went short. I thought it "might" have a down day - I was wrong. At least I tried to short it from a higher position and I had a chance to get out at approx 20:50 but decided to hold in there to my cost

Unfortunate decision to set the AMZN long at breakeven. Once down to my close out position it moved up

Thursday, 8 July 2010

A day of poor decisions

The kind of day you hope would be behind you but where the old mistakes. The decision to go long on cable wasn't particularly bad as the pair was forming what I perceive to be a coil. However timing was poor considering the appearance of the pin bar. The afterwards lots of poor decisions to go long, then short and honestly, what the hell was I thinking?
Not helped by setting my stop at 15125. Depending on where in the stochastics cycle you are you need to set the stop accordingly. Very high and the stop should be 100+ pips.

I'm currently long on AMZN@ 114.88 mainly because of the short interest which I estimate to be approximately 1.7(?) - 1.9 as at 15/06/10 so good chance of a short squeeze. Hair raising drop of 80 pips and didn't have the heart to buy in again which is a shame.

Wednesday, 7 July 2010

10% rule is a harsh mistress ...

... sometimes she will protect you from loss - at other times those gains will run away without you. I figured at this point in time the 10% rule has to be played ruthlessly

I made a good decision to long on DJIA at 9698 given the strength of yesterday's late rally.
Logged in at 3 to see a nice gain of 120+ points. Ummed and erred about setting the stop at 80 and just seeing how it went but with the fact I must log in at work and can only spend at most 2-3 minutes on this I just took it all off the table. Bear in mind yesteray the index opened up 200pts up on the futures and fell back
Well as it happens today was one of those days the index was out to crush the shorts and it rose and rose right up to 10000 without looking back.

Tuesday, 6 July 2010

Short Gold

I had one go at shorting gold earlier in the week and it didn't come off. I noticed that despite the market falling gold had not moved up so had another crack. This time it dropped by about 1.5%. Took profit at ~20% of fund size.
Also another trade long on DJIA. All stochs pointed to an oversold situation possible bounce. Index had already made 200 points before falling back. Increased exposure when original trade lost ~30pips. Took profit a little to early as didn't want to risk my earlier profit on the gold short. This is of course the usual psychological issue as it happens DJIA continued to move in the direction I figured it would.
Had recently had a set back having missed a big move on the GBPUSD when a long trade that was in profit met the stop loss I had moved to a no-loss setting (less than 1 point!!!). Also failed to go long on my other account at approx the same time.