Trade DiaryI can’t help feeling there could be a rally sometime soon. This is obviously the greed aspect of a trade as I’m up 800+. My exit target is 3700 but this is very close to Christmas and volume is relatively low which could indicate the possibility of a bounce should the DOW switch mode and do a u-turn.
There have been many days like this where the DOW pushes lower and then flips to rally a few hundred points after a few days of selling. The flip side is I know markets will push lower but before they do they may spring a pull back before retreating again in the New Year. A Santa Rally is a powerful thing and caught me completely off guards last year. Markets like these are manic at best and can have the most irrational mode swings that can wipe you out. If we rally I want to take my profits and then short again.
When I originally posted my trade diary I was expecting to have to wait a few weeks before I could short but in these markets bounces of 10% are not uncommon. No sooner had I posted that the DOW rallied and I jumped in (FTSE 100 MAR 4400 – Sell -2.50). I had intended a 5 Euro size but beggars can’t be choosers and I’m not complaining.
Essentially what I’m getting at is that the sell off whilst rational doesn’t feel right it seems too orderly. Maybe I’m just being emotional and should follow my conviction but then again maybe a trailing stop could be the tonic. Interested to hear any views?
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Too late the DOW is off and based on previous rallies could go 400 – 500 points. I could panic and cash in but I’m going to try and keep the conviction of my trade and use it as an opportunity to add to the position. Its horrible being right.