Rio Tinto

Long at 4103 close to the 200 day moving average of 4083

Had a good day spotting the formation of a bear flag? Maybe more like my experience of the movement of crude after a big fall.

US Crude

very very volatile correctly set a buy at approx 95.60 when it was 98 but didn't give it enough breathing and it fell through to 93.48 so it needs 250 as room?

Go back some by buying a 94.71 and selling at 95.76

I feel that US crude will hit 100 driven by traders trying to push short sell stops

Apple

Did the opposite of what I thought and tried to catch a falling knife and paid 37 for the loss. It continued to crash which was my initial suspicion

Barclays closed

closed at 316.9 made 38.60. Felt it had dropped well far enough for now and there was a slight bounce.

My general feeling which has been buoyed out is that bulls are now outnumbering bears 3:1 at least and that a recent telegraph article said that ISA money is coming in earlier this year and the VIX is at it's lowest ever level. The market has a nasty habit of crashing just at the point the retail invest comes in!

Pity I couldn't bet on the VIX but at ig that is 50 a pt - too rich for me

Short barclays

At approx 3.23. Went in before the results figured it could be a buy on rumour sell on news. Surprised by strength, but still think that with all the analysts rating barclays as a buy how much further can it go?
316 (2)
322 (2)
332 (2)
Have taken a loss of 20 to close out a 316 contract

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.

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

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.

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.

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.

Anatomy of a bad trade

I think the key is psychology. If you cannot conquer the psychological aspects -the desire to buy cheap and sell high, to "get in at the ground floor", all the human aspects placed there by evolution you will never make a successful trader.
The market acts in complete opposition to our in built psychology - expensive gets even more expensive and cheap keeps getting cheaper

Broke my 10% rule again!!!

I was correct down to 14856, unfortunately I ignored my 10% rule and paid the price with the currency hitting 14856 at it's lowest level before rebounding up past my initial sale point and up past the morning's high to 15000.
I set my stop really rather too high - I mean, once past the day's high a decline was unlikely. The problem comes once again that I cannot really see what is going on except through yahoo, but maybe my problem is breaking my golden rule in an attempt to hold a position. I believe that if you are going to do this, once in a large profit one should set the stop to a nil profit or loss and accept the consequences.
Made a little back this evening but trading in this short time span is little more than playing a video game.

Short GBPUSD @ 14937

The reason here is there is quite an interesting formation and a lot of volatility which the bears have won. If the DJ closes significantly down tonight I think there will be a bit of room for the currency pair to fall away overnight given how much the Asian markets are affected by the US.
The rule is you shouldn't short a short term double top if it turns into a triple top but the very volatile action at the top of the second peak leads me to believe the currency bulls were unable to push past the 1.50 level

Slightly irritated

Originally having posulated the DJ would drop to 10195 I then second guessed myself and chased the market a little and altered it to 10215. Also opened up a trade on the other account at 10238 (much much too high) Have now closed with a profit, but at the moment can't really see what will hold up the market - unless you take the position that we see a lot of bad news and the market won't go down
It's low point was 10165 and I think it will retest that low today

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

Never hold over the weekend (short or long)

OK, so the short on the DJ was not a bad trade, but forgetting to adjust the stop (it is guaranteed after all) on Sunday was a mistake and of course the market gapped up and I lost 40 odd pips. Silly really.

Coil success in the EURUSD

When the market coils it is generally waiting for some news. For example today the currency market was waiting for the success of the Spanish bond auction (which I didn't know). I took my long position and at 9:00am as if by magic the pair took a rocket ride.
Lots of reason for the long position - lots of shorts out there bearish on the euro, stochastics in the "overbought" area (don't know if this applies to daily as much to hourly in a trending market)
A good point raised by a poster on the DT site is that it's the ECB underwriting the bond auction by buying the bonds ... surely this is effectively just money printing?

Also another tip I read in the "Master Swing Trader" is not to try and short the triple top as it may become a break out

Bad volatility pile up

A particularly bad day for a currency deal, or maybe more of a case of the wrong setup?
The good points were that I tried to wait until the move was underway and I put in a stop not far above the range of the most recent of the bars. Regretted not putting in a higher stop at the time but the move went right up to 14816
The bad point was that I put too much on, and that at 10am the trade was in a good profit before bouncing up at a great velocity
The circled points are what are theorectically better setups - early morning lots of narrow bars. I had too many average sized bars which morphed into larger bars still with no sense of direction - only whipsaws

DJIA broke strongly above 10240 to finish 10400. This is close to text book, but the move was almost straight up giving no chance to jump on. More proof that it's better to stay in once a move has begun because jumping in halfway up is very tricky

Resistance at 10240

I think the index's failure to close over 10240 is not a good sign. However if we then see more narrow bars created as we moved toward June's TWW then it could be a coil developing for a big push upwards.
If the index drops sharply over the next 2 days then it looks like this is just prelude to a big drop
Gold is holding just above it's 20 day moving average. Without a big push over the next week it could very well drop away.
Have done some minor bits of dealing. Lost a small amout today (went from +20 to -15) but I guessed correctly that past a certain point the index would keep dropping which it did another 30 points past my stop loss.