Thursday, December 23, 2010

New Year's resolutions. Thu Dec 23

I don't want to be mistaken for Santa so the New Year's resolutions have kicked in early. I've started up swimming and going to the gym in the last couple of weeks and that's the main reason I'm still coming in to work.
The market is up 12 points after an hour on pre-Christmas volumes. Aru and Lyc have retraced a couple of cents while Wsa was up 15 early - I sold a few at 614 - but is back at 602. The others haven't moved.

My trading resolutions revolve around improving entries. That has been the success story of the year for me but I think I can do better. Mind you, I haven't done the work on it yet and that's what I'll be focussed on for the next week or two.
What's happening now is that I'm identifying a stock that I want to buy (or sell) and identifying entry points that should offer a good risk/reward. The trouble is that the stock price can continue to grind lower for some days even if it does resume the trend. I would like to get in as late as possible and minimise this time, ideally, I want to get in when the stock is just starting to accelerate.
Here's Awe as an example. After the explosive burst in early November, I was looking to buy for another test of the highs. I started in the mid to high 160s and eventually bought more in the low 160s, trying to buy and sell a few to take the average price down before, after nearly two weeks, the stock took off again.
What could I do better? I could argue that the purchases in the mid to high 160s were premature because support was too far away or that there was no obvious sign of completion of the retracement. This could be a reversal day after a new low following a congestion or two to three narrow range days curving up as in late October. Anyway, this is the sort of stuff I'm planning to work on.
3.27 It's been another strong day for the market with the Asx 200 index up 28 points. The action is heavily skewed to majors. I checked a few minutes ago and 18 out of the top 20 stocks were up whereas in my watchlist of stocks, which are generally smaller but still in the top 200, only 16 of 30 were trading higher.

4.10 That's it for the day, a rise of 21 points, mainly confined to the banks and large resource stocks.
Tomorrow's a shortened trading session. Should be a 1 or 2 pm finish.

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