When the June contract hit $66 last night, I was tempted to sell. However, I thought she might break through to $67 today - what with a storm in the Persian Gulf, Bush criticizing Putin etc. So, I bought 2 more contracts @ 6595 (actually 6283 - thanx IGM - that 12 point spread is a real beauty...not).
Anyhoo, got stopped out of both of them, as gasoline went south. So - went short @ 6529 (actually 6541 - again, thanx IGM... love your spreads) - got stopped out on that as well, as gasoline went north! In the meantime, I wanted to close my longs @ 6550 - but my computer got all slow on me. Finally, managed to get out of all 3 @ 6540.
All in all, got clobbered out of close to $1000 in all this mayhem - actual losses plus opportunity loss.
I think if this has taught me one thing, its not to trade frequently. Bide my time, pick my trades - and when I'm convinced - go in strong. At one point, I was up over $6000 - and in the end, came out $4500 ahead.
Well, I'll take my profits - hopefully, I'll remember this lesson.
Showing posts with label Lessons. Show all posts
Showing posts with label Lessons. Show all posts
Wednesday, June 6, 2007
Sunday, June 3, 2007
Still here
Its been a while (again!) since my last post. A lot has happened since then - my grand design of getting back even on my positions got hit pretty hard in May. At one point, I was down to $3000 in capital, and with a MTM loss of another $1000.
But now, things are way different.
On May 8, I sent the following email to a friend in India:
My call on $61 being the bottom was right! And this was after crude had fallen for 8 straight days. I took positions @ $62 and $62.15, before I realised that crude is indeed a very volatile beast. 2 days later, I was fighting to save both positions, as a sell off in stocks spilled over into commodities, and sent oil tumbling back to $61.
I then realised something interesting about oil - it has an inherent tendency to seek a double bottom before moving on. Also, at the beginning of the trading period, the price would drop about 30-40 cents, find support and move back up till it found the next support.
So, I thought, this means - theoretically, I can sell at the closing price, buy back when it double-bottoms and get more bang for my buck! Great theory - in practice, the double-bottom never happened that day, after I'd sold my positions - because Gasoline prices rallied to all-time highs, taking crude along with it. Of course, that was a link I wasn't aware off - and so I missed out on the ride to $66.
However, this week gasoline prices came down again, due to refineries in the US firing up production. Crude followed - and this time I was ready. Oil was trading @ $63 (having bounced off $62.50 the previous day) before the the oil inventory numbers on Thursday; a decline in crude stocks sent to price up to $64 initially, however since there was a build up in gasoline stocks, i expected the market to fall. And it did - all the way down to $62.50 - which confirmed both my double-bottom expectation and my chart. I piled in with 3 mini contracts, and plan to hold on to them for a while. Last traded @ $64.85 - and they are the reason why my account has completely turned around.
Just 2 weeks ago, I was in despair - all my positions were going down the tubes (in fact, I'm MTM -$1000 on my share CFDs). Since then, I've had a couple of profitable trades on the XJO and some pretty amazing ones in crude futures. I feel like I've crossed a major step in my learning.
But now, things are way different.
On May 8, I sent the following email to a friend in India:
interesting set-up in crude. if it holds $61 on the weekly chart, that would confirm the ascending wedge. following the chart pattern forward, we could be looking at $80 crude in jan 08...!! if the pattern is confirmed, now would probably be a great time to go long - we wont see this level for a very long time ...... |
My call on $61 being the bottom was right! And this was after crude had fallen for 8 straight days. I took positions @ $62 and $62.15, before I realised that crude is indeed a very volatile beast. 2 days later, I was fighting to save both positions, as a sell off in stocks spilled over into commodities, and sent oil tumbling back to $61.
I then realised something interesting about oil - it has an inherent tendency to seek a double bottom before moving on. Also, at the beginning of the trading period, the price would drop about 30-40 cents, find support and move back up till it found the next support.
So, I thought, this means - theoretically, I can sell at the closing price, buy back when it double-bottoms and get more bang for my buck! Great theory - in practice, the double-bottom never happened that day, after I'd sold my positions - because Gasoline prices rallied to all-time highs, taking crude along with it. Of course, that was a link I wasn't aware off - and so I missed out on the ride to $66.
However, this week gasoline prices came down again, due to refineries in the US firing up production. Crude followed - and this time I was ready. Oil was trading @ $63 (having bounced off $62.50 the previous day) before the the oil inventory numbers on Thursday; a decline in crude stocks sent to price up to $64 initially, however since there was a build up in gasoline stocks, i expected the market to fall. And it did - all the way down to $62.50 - which confirmed both my double-bottom expectation and my chart. I piled in with 3 mini contracts, and plan to hold on to them for a while. Last traded @ $64.85 - and they are the reason why my account has completely turned around.
Just 2 weeks ago, I was in despair - all my positions were going down the tubes (in fact, I'm MTM -$1000 on my share CFDs). Since then, I've had a couple of profitable trades on the XJO and some pretty amazing ones in crude futures. I feel like I've crossed a major step in my learning.
Wednesday, April 25, 2007
Developing my Trading Rules
To put my theory of trading the range in OXR to the test, I shorted @ 305 yesterday - it was 10:13 AM, the stock was up 5 cents from Friday's close. Guess what - WRONG CALL! The market drifted back to 304, before moving inexorably onwards to close at 307. Today - low of 305 (at the open), high of 313.
So - the exception to the rule was the one time when I decided to put my money on the line! I don't know whether to laugh or pound my head against a very solid rock.
ILU, meanwhile, gave me a shock as well - I have a price target of 571 - but she closed up at 590! Today, she's the only trade that's actually in the green, currently at 577.
The XJO is going bananas today. Down 50 pts, then up 50, then down 50 again - and its just 12.41 pm! Getting a bit dizzy.
Apart from my profit on ILU, I'm down $480 (MTM basis @ 12:45 PM). Here's what I think I should do with the positions:
ILU: let it run to 571
OXR: close it as near as 307 as I can.
AWB: I see support at 343, so it should do something positive from there.
BHP: get out quickly
AMP: reset target to take profits @ 1100 - which was touched earlier today.
AGK: it closed @ 1610 yesterday. have had faith that this stock will recover so that at the least I can break even on the trade.
Further, all of yesterday, I've been thinking about some rules that I need to follow to make this work. This is what I've come up with:
1. Always trade the trend from the trend-line. Whenever I've done that, I've made a profit (eg. ZFX, SMY, VBA trades earlier).
2. Look for complete positive signals from charts. Essentially, avoid doing an AGK or BHP again - where the stochastics were obviously bearish.
3. Do not trade on a whim. Avoid trying to catch a falling knife (like my long AWB @ 360 and short OXR @ 305 positions now)
4. Be patient, not greedy. I'm not going to put more than 2% of my capital at risk. Currently, that works out to $80. This would mean smaller positions and profits - but so be it.
5. Be thankful for my opportunities. I don't mean this is a religious way, but really - thankful to Mr. Market for putting opportunities of profit in front of me.
Now, to see if I can stick with these.
So - the exception to the rule was the one time when I decided to put my money on the line! I don't know whether to laugh or pound my head against a very solid rock.
ILU, meanwhile, gave me a shock as well - I have a price target of 571 - but she closed up at 590! Today, she's the only trade that's actually in the green, currently at 577.
The XJO is going bananas today. Down 50 pts, then up 50, then down 50 again - and its just 12.41 pm! Getting a bit dizzy.
Apart from my profit on ILU, I'm down $480 (MTM basis @ 12:45 PM). Here's what I think I should do with the positions:
ILU: let it run to 571
OXR: close it as near as 307 as I can.
AWB: I see support at 343, so it should do something positive from there.
BHP: get out quickly
AMP: reset target to take profits @ 1100 - which was touched earlier today.
AGK: it closed @ 1610 yesterday. have had faith that this stock will recover so that at the least I can break even on the trade.
Further, all of yesterday, I've been thinking about some rules that I need to follow to make this work. This is what I've come up with:
1. Always trade the trend from the trend-line. Whenever I've done that, I've made a profit (eg. ZFX, SMY, VBA trades earlier).
2. Look for complete positive signals from charts. Essentially, avoid doing an AGK or BHP again - where the stochastics were obviously bearish.
3. Do not trade on a whim. Avoid trying to catch a falling knife (like my long AWB @ 360 and short OXR @ 305 positions now)
4. Be patient, not greedy. I'm not going to put more than 2% of my capital at risk. Currently, that works out to $80. This would mean smaller positions and profits - but so be it.
5. Be thankful for my opportunities. I don't mean this is a religious way, but really - thankful to Mr. Market for putting opportunities of profit in front of me.
Now, to see if I can stick with these.
Thursday, April 5, 2007
Last nite, I set premarket orders for ZFX (Buy @ 1508), BHP (Buy @ 3008), OXR (Buy @ 284).
Lesson #1:
Stocks in the ASX gap up. BHP jumped from y'day's close of 3006 to open at 3055. ZFX gapped from 1505 to open 1548. OXR gapped to open @ 288. Hence, you miss out on the major moves in the market - unless you are already in the market. BHP traded in a 3047-3061 range, ZFX in a 1519 to 1549 range.
Lesson #2:
A Buy Stop is different from a Buy Limit order. And the IGM system doesn't always give you that choice. I set my Buy orders as 'Buy Stop'- as a result, I got in at the first pricepoint of the morning. Which was certainly not what I wanted. I needed to have set a Buy Limit order - which does not execute my order unless my specified price is reached.
As a result, I've finished negative for the day in ZFX and barely ahead in BHP - and they're both virtually at my exit prices.
Lesson #3:
I need to get into (or out of) the market on the previous trading day. That's the only way I don't get burnt by the gap moves. Also explains why I did well on WPL today. I got in near the close yday.
So,I've written to IGM to put me on a Standard Account, from a Limited Risk Account - it hasn't worked for me, and I've just ended up paying lots of brokerage. They wrote back to say that I need to have $20K in the bank before I can move. Which, of course, I don't have.
Lesson #1:
Stocks in the ASX gap up. BHP jumped from y'day's close of 3006 to open at 3055. ZFX gapped from 1505 to open 1548. OXR gapped to open @ 288. Hence, you miss out on the major moves in the market - unless you are already in the market. BHP traded in a 3047-3061 range, ZFX in a 1519 to 1549 range.
Lesson #2:
A Buy Stop is different from a Buy Limit order. And the IGM system doesn't always give you that choice. I set my Buy orders as 'Buy Stop'- as a result, I got in at the first pricepoint of the morning. Which was certainly not what I wanted. I needed to have set a Buy Limit order - which does not execute my order unless my specified price is reached.
As a result, I've finished negative for the day in ZFX and barely ahead in BHP - and they're both virtually at my exit prices.
Lesson #3:
I need to get into (or out of) the market on the previous trading day. That's the only way I don't get burnt by the gap moves. Also explains why I did well on WPL today. I got in near the close yday.
So,I've written to IGM to put me on a Standard Account, from a Limited Risk Account - it hasn't worked for me, and I've just ended up paying lots of brokerage. They wrote back to say that I need to have $20K in the bank before I can move. Which, of course, I don't have.
Wednesday, April 4, 2007
Reworking my exit strategies
Yesterday, I had the potential to make about $600 in profits. In the end I ended up with $90.
Gold fell early on in the piece - at one point, I was up $324 on my 2 mini contracts. Then, I failed to act in time, as the market turned sharply; and in the end I exited both positions with a $80 profit.
Then I went long the crude oil mini contract @ 6673; was up $324 again on this one. Thought - she's going to 6800; and she didn't. Had a stop at 6675 which got triggered as I slept - profit of $10.
While I continue to refine my conditions of entry, I seriously need to rethink my exit points as well. So far its been a bit of 'dartboard' and a bit of 'don't have a clue'.
Gold fell early on in the piece - at one point, I was up $324 on my 2 mini contracts. Then, I failed to act in time, as the market turned sharply; and in the end I exited both positions with a $80 profit.
Then I went long the crude oil mini contract @ 6673; was up $324 again on this one. Thought - she's going to 6800; and she didn't. Had a stop at 6675 which got triggered as I slept - profit of $10.
While I continue to refine my conditions of entry, I seriously need to rethink my exit points as well. So far its been a bit of 'dartboard' and a bit of 'don't have a clue'.
Wednesday, March 28, 2007
My first trade...
... was the Mini Gold Forward contract last night. Bought 1 contract @ $663.35, bailed out @ $663.05. So this was also my first loss.
In hindsight, I suppose it was greed that made me buy when the market had risen ridiculously quickly on the chart. I think the lesson here is only buy at a price that I've spent time reflecting on - and not get carried away by the drama in front of me. A bit more reflection, and a bit less 'seat of the pants' is called for.
In hindsight, I suppose it was greed that made me buy when the market had risen ridiculously quickly on the chart. I think the lesson here is only buy at a price that I've spent time reflecting on - and not get carried away by the drama in front of me. A bit more reflection, and a bit less 'seat of the pants' is called for.
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