Trade DiaryAt the moment I’m worried about two things. The first being that each rally is light on volume and that these rallies are falling short of the previous rally. The second is that the new Obama office will throw everything at the financial problems we have to restore confidence and this will create a rally in equities. So in essence I’m worried about the upside and downside risk and being caught on the wrong side of both.
My previous conviction of entering above 4300 on the FTSE 100 has changed and I have moved my entry point to 4200+. This is due to each rally failing and 4300 being possibly out of reach at present. I have also changed my opinion on the exit point as after Christmas a new wave of optimism may ensue as Obama takes office. This will be in spite of dire economic news but on renewed optimism in a solution. My new exit is around 4000 but I will trail a stop loss with 20 points.
Here is a quick summary but I won’t be taking action until the rate cuts are out of the way today.
Entry: 4200 – 4500 FTSE 100 March 2009
Exit: 4000
Stop (Mental): 4600
Point Size: 5 Euro ( 2 x 2.5)
Return Value: 1500
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This is an absolutely brilliant entry as it is EXACTLY what has happened to me in the past – I have been an amateur spreadbet trader since early 2006 and I still feel I have a lot to learn. But this particular scenario is something that has happened to me many times.
In other words, you spend a weekend making plans for an entry and stop/profit and in the cold light of day the plan makes sense. And then when the blood is pumping and the news is breaking and the prices are moving quickly something ‘weird’ happens. You suddenly on the spur of the moment decide not to enter, or not to close at the stop or the profit and it turns out to be a DUMB-ass move. The same is true of entering a market on the ‘spur of the moment’ (something I have also done many times) – a total receipe for disaster.
It took me a long time to stop beating myself up about this kind of thing (just as much as it took me a long time to stop berating myself for not making the ‘perfect’ trade) – and now I pretty much exclusively use automatic trades (although I favor ‘pyramiding’ so I don’t much mind having an automatic trade that might for example put me into a position but not to the full amount).
Anyway, I just wanted to say as one trader to another – I hear you brother and you’re not alone. The world of the trader is a lonely one, and you have to face your demons on your own. Good luck mate!
Ah if only I could learn. Did it again today and closed a FTSE position because of a hunch which didn’t transpire and now I’m down 200 quid. If only you could remove emotion.