Well, well, well. What can I say. The market has been all over the place the past week - up, down.
I came across my first delemna in respect to Stop Losses. When you are trading CFD's, you can move your trailing stop, say each night, and then basically forget about monitoring the market as you'll be stopped out automatically (give or take slippage) if your stop is hit.
However, since I'm trading shares I can only place a stop loss out of the market; ie a mental stop loss in my records. So I have to be watching the market to activate the stop and get out of a position. Which, with a pretty full on 'real' job, I don't have the time to do.
So my position in BHP, which by the way was doing extremely well, took a huge dive on Tuesday morning wiping out any gains. That'll teach me to start having grandeur ideas about raising my 3% goal target - just like a slap in the face with a wet fish.
Needless to say I then ran into some trouble existing on my stop loss, due to not being able to watch the markets. My stop was sitting at $39.30; but I manually sold at $37.50. Darn. A loss of $248 - however, well within my 1% risk of $500.
The temptation was just to let it run and see if it would 'come right', and the next day the market
did rally and BHP ragained some ground. But as of yesterday, it had dived to a low of $36.05 - so it proves you need to cut your losses early as holding on would have increased my loss to over $600.
So in summary this wasn't a good trade in several ways;
1) still trying to get my head around activating manual stops
2) didn't follow the plan (which may need adjusting to take account of 1).
With
ASX:BHP the drop usually happens on the open, which then means you endure the whole day before executing a sell order.
I also sold out of
ASX:AOE on the 5th Sept at $2.90, copping a loss of $320, which again was originally in a profitable position.
I'm of the opinion in this market, that perhaps you need to lock in profit as soon as any decent increase occurs. This does go against the 'let your profits run' adage that most traders bandie about - however, that might work fine in a raging bull market, but does it actually work at the moment? (That's a rhetorical question, 'cause I don't know the answer).
I've jumped right back in, and have the following holdings still open:
AMC STO HSP
BLD IRE GDY
Will post the breakdown of entries shortly.
She Trader
Vicky is trading a notional portfolio of $50,000 testing her strategies and trading plan before embarking on the real thing. You can read her bio here and view the trading plan here.
Although based in New Zealand she prefers to trade the ASX, generally holding shares from days to months.
Vicky is a mum and also works part-time in a busy publishing company, so fits her passion for trading around these other commitments. (Trying to prove it can be done!)
Using the name, Shetrader, Vicky posts regular trading blogs so you can follow her progress and decisions surrounding her trades.
