Wednesday, February 18, 2009

Heading for new lows

It's approaching 11.30 and the market is down 95 points or 2.8% following a weak lead from the US and the correction from mid November last year seems to be well and truly over.

Of my 8 stocks the two golds are up as is fmg, defying the overnight weakness in the larger resource stocks but maybe buoyed by the continued Chinese interest in buying resource stocks.

11.31 Wpl broke through the morning low at the end of the last bar and I've put on part of a short at 3159. 3152 was a level held since late December and it's already been below that.
Also short fmg on a reversal at 275. Sold a bit more wpl at 3145.

11.56 Sold rio at 4775. There was a traders trick entry at 4779, during the 11-11.30 am bar and since the stock hadn't rallied I decided to take it.
Wpl is finishing the bar fairly strongly but I think I'll keep a widish stop as it's a major break on the daily. Obviously, as yesterday's 10 minute experience showed, the 30 minute signal is the relevant one for me.

12.07 Quite a few potential signals as the spi is having a bit of a rally. I could buy bhp at 3042 or ncm at 3598 and lgl at 360. Wpl is also testing my patience. For the moment I'm sitting tight. Ncm is the best quality trade, if a bit extended.

12.34 the market is grinding up and I've been failing to bite the bullet. I've stopped out of rio at 4843 but could have done 25 cents better.

12.51 Bought some ncm at 3609, semi reluctantly. I was hesitant yesterday but it was the best trade of the day.

12.54 shocking start to the day. All trades gone against me and I've been running my stops to make things worse. The market is grinding up and could well offer some bearish trades later in the day as this peters out.
I think I forced the trade in rio and I definitely did in fmg. I could have cut wpl at 3176 and been ready to have another go on the short side. As things stand, it's been up through 3200 testing resistance and is now at 3191.

1.08 Tipped out ncm at 3605. Had a quick run up to 3620 but slipped right back. Zero momentum, unlike yesterday afternoon.

1.13 Just realised I missed a simple buy signal in rio at 4862, stock is now 4900. It's also one I could have taken at 4813 with a cut and reverse so more gnashing of teeth.

1.30 Closed out wpl at 3210.

1.33 Short sto at 1423 on resumption of fall.

1.44 Just noticing that fmg was setting up really well having failed to pull back and that I'd stretched my cut ridiculously. Missed 284 and had to pay 286. Now long at 287.

1.51 Short bhp at 3037 and ncm at 3590 as the rally falters.

2.05 Short rio at 4916 after 3 wave rally.

2.11 Short lgl at 356 looking for correction. Half position size.

2.29 Closed short in ncm at 3612.

2.35 Closed short lgl at 357. I've been thinking that I've been doing too many trades. It's a fair bit to do with impatience and I think often the best trades are the ones that you see setting up and you're not expecting them. Eg fmg has kept running up to 290 and that became pretty clear when the stock was at 283,284 and holding well. Likewise rio made a great little buy signal that I couldn't bring myself to take because I'd put on an impatient short.
So I closed out lgl because it was a forced trade.

2.41 Stopped out of sto at b/even 1421. Stopped out of rio at 4960, was never a great trade but after it went my way initially I had a chance to take off a fraction to cover costs and then close out at square but I was hoping that it would take a big chunk off my losses for the day so I let it go. That's how bad days spiral so I guess it's instructive for me, if irritating, to learn to deal with these situations.

2.47 I've ignored a potential long in rio but I still think it looks like a complete wave count and might be more profitable on the downside.

2.49 Shorted sto again. A bit irritating but I didn't want to ignore another cut and it's a good sell signal.

3.05 Sold a little fmg at 299 a bit earlier, now at 307.
Closed short in bhp at 3040 as it's gone nowhere for 90 minutes.
Long ncm at 3627 as it looks like the correction is over.

3.14 Rather hastily sold out the last of my fmg at 312 and it's now 321. sigh.

3.25 Fmg in suspend with last trade of 333. the way to make money with this, or any, style of trading is to hold on to your winners.
Bhp now 3023 so that cut wasn't the smartest.
Looking to try again in rio.

3.35 Stopped out of ncm at 3616.
Short rio at 4906 for a quick trade.
Fmg out of suspend - speeding ticket - back to 313 but bhp now 3007 so the kicking myself factor still high.

3.40 Stopped out of sto for scratch as stock holds into the closing bar.
Rio not pretty, close to another stop out.

3.54 Stopped out of rio at 4985.

Where do I start. An awful day but nearly all brought on by myself.
13 trades, 1 winner, 7 losers, 5 scratch.

Bhp - 1 trade. Good entry, impatient exit - no stop was triggered, should have been closing out now.
Fmg - 2 trades. First trade was silly. I was looking for the sharp reversal but there had only been 3 bars up, this set up needs more than that and a real sense of the rally sputtering out into a narrow range. Made things worse with a cowardly cut. Had the guts to go long but the set up looked great and I could have gone harder. Cut too early. Even tho' the stock fell rapidly to 289 from 333 after the speeding ticket there was still an easy exit at 320.
Lgl - 1 trade. Not a very compelling trade, scratched it.
Ncm - 3 trades. A bit unlucky. All respectable enough but the stock kept reversing and I kept taking small hits.
Rio - 3 trades. First trade was punty but ok but my cut was rubbish. Also, my opinion was that rio could well rally first then fall later so why did I take the punty short trade? Second trade was also punty and could have got out for square rather than a small loss. Last trade was the triumph of hope over experience and a pretty shabby cut again.
Sto - 2 trades. Both ok. A little unlucky with the minor stop trigger in sto but it had already started falling again when I cut so also a bit dumb. I showed courage to go again and the cut was fine.
Wpl - 1 trade. Short was ok. It was debatable to give it such a wide stop. The stop was when wpl burst back through resistance and really there was a reasonable buy opportunity as it took 3 bars to get through. A failed break down and reversal is a lot less punty a trade than most of the ones I took today.

In the end I lost a bit more than I made yesterday. Given how many mistakes I made it's a good outcome.

A few points. I'm tending to go hard with 2 or 3 trades in the first half hour just as I've often done at the 10am start. I think I'm trying too hard to make money rather than letting it come to me. Each day when I sum up, I can see that there were 2 or 3 great trades they just weren't all at 11.31. For example, fmg stood out after the consolidation held so well. If I'd cut wpl sharply I probably would've seen the good trade there and rio was also a damn good buy trade.
Today when the early hasty trades all went badly I got stubborn and wasn't awake to the opportunities.
It would also be best to limit the trades to the good ones ie where there are clear signals. Having fewer trades on might help me to stay with the slow ones like bhp.

Still, I feel like I'm learning. Today it was learning the hard way not to soften into my old ways of running stops in hope till they hurt and being blind to obvious signals because of preconceived notions.
Here's the rio chart as an example.

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