I knew it, I had practiced it before but on this occasion I ignored it. Trailing your stop loss behind your winnings is the only time you should ever move your stop. Over the past few days in search of my trading Zen I have been waiting for the FTSE to rise to a resistance level and then shorting it. This has worked quite well gaining me 300 euros.

Then the rebound came. This was due to Wal-Mart who had good earnings and then comments from Goldman Sachs, Morgan Stanley, JP Morgan and other big banks speaking at a Merrill Lynch-organized financial conference. All of them had optimistic and good news which caused the Dow Jones to rally 320 points. I was short and bam 160 losses so I moved my stop loss. In the light of day I moved it back and took the hit because it looks like another strong rally is on the books for today.

In the denial I also took out a buy on Wall Street and set the stop loss to close stopping me out for another 60 euros. Wall Street went on to rally another 40 points which I missed. Not a good trading day. The lesson is never, never move your stop.

No related posts.