Sticking to the rules

There was a sudden sell down at 2PM yesterday that resulted many people who took profit or cut loss. I was conned into selling Capitaland at a small profit and subsequently saw it bounce back. I almost sold of GoldenAgri but managed to convince myself to stick to my trading rules and not succumbing to emotions.

My decision to stick to rules proved to be correct and the market bounce back and close only slightly lower.

Today, he market rally back again.

I added Cosco back after twice I sold off too early resulting in small profits each time. However, based on the chart and indicator, this counter still have not realised its potential and there are still a lot of room to move. Again, I failed to follow the rules and resulted in missing the big portion of profits.

After selling down yesterday, my portfolio is now at about 7.2% positive. This is down by almost 3%.

Expect the unexpected

Almost everyone expected today to have some form of pull back from profit taking. To the surprise of many, today is extremely strong day for STI. After initial advances in the morning, the afternoon session proved to be even stronger.

My portfolio is now 10% above last week's position on average.

Mercator Maritime, Capitaland, Sembmar, Olam, Golden Agri

Cosco: Sold at 1.23 today with a small profit.
Reason for selling: Not sure of the technicals about this counter. It was bought based on hunches after much run by Keppel Corp. This counter run up another 5 cents immediately after I sold out. However, there is no regret since this decision is totally based on logic and trading rules. It was the reason of entry that was wrong.

Golden Agri: Almost sold off out of "fear" of not making money. However, cancelled the order after considering the trading rules. Close unchanged at 0.38. Papaer gain of 0.035 / 10.14%.

Mercator Maritime: Held on. Closed at 0.39. Great run up today. Paper Gain of 0.035 / 9.86%. Decided not to sell now. Taking more risk since technical indicator is not giving sell signal.

Capitaland: Closed down at 3.94. Paper gain: 0.15 / 3.96%. Technically soften. Could be profit taking. Wait for sell signal.

Sembmar: Still going strong at 3.06. Paper gain: 0.21 / 7.37%.

Olam: Bought today at 2.48. Based on the RMO buy signal. Even though the counter has already run up quite long, the overall trend is still bullish. So, it is worth to take a risk.

Sembmar, Capitaland and COSCO

Added Capitaland 3.79
Added Sembmar 2.85
Added COSCO back at 1.21.
Maintain GoldenAgri at 0.345
Added Mercator Marine at 0.355

Reasons: At this time, the trend is still up even though there is some correction today. The major trend still going up with most of the counters having EMA5 above EMA20 above EMA50 and EMA200 as well. This is a super bull trend that has not been see for quite a while.

Mercator has a very good fundamental based on financial reports. This counter has potential for long term investment if it can continue to perform.

Another counter needs attention is NOL after some corrections.

Important lessons - Timing, stop loss, support and resistance

There were a few mistakes made during the last few trades that cost me some money instead of making a few thousands. These are important lessons that I need to remember:

Keppel Corp
CityDev
Ascendas India Trust
Parkway Holdings

All the above counters suffered from having stop loss point to close to the entry and above or just below support where the counters penetrated support and rebound back to close much higher following the overall market bullishness. Even though I know that the short to mid term trend is to go up, I had stubbornly put the stop loss too close. In the case of Parkway and Ascendas India Trust, I lose patience with them and decided to get rid of them out of frustration.

As a good investor or trader, one needs to be very patient and calm. One must not be agitated easily and must not succumb to unfounded fear. Fear of losing is always the cause of loses. Balancing greed and fear is very important in succeeding in trading or investing.

I must adjust my stop loss and must not sell out of frustration. Since I still have more than 75% of my capital standing by, I must not be worried about my capital being tied down not earning anything. The correct way is to use up my additional capital for new opportunities and keep my existing investment intact unless there is compelling reason to sell.

Golden Agri - 20090719 & 20090721

Bought Golden Agri back at 0.335 because the previous selling unfounded. Added same quantity on 2009-07-20 since the counter seems bullish.

Golden Agri - 2009-07-16 and 2009-07-27

Golden Agri was sold off at 0.335 on 16th July for a quick profit after a friend told of the potential sell down in the market.

Again, this is another poor decision. This is selling out of fear and there is no solid reason. The counter did not show any sign of weakness. It did not hit stop loss point. The counter still show bullish signs technically. Fear of losing overrides fear of not winning more.

After realizing the mistake, the counter was bought back again at the same price on 17th July.

Important Rule: Trading is a lone game (Jesse Livermore, Turtle Traders). Do not discuss your trade with other people.

2009-07-17: AscendasIndiaTrust, Healthway, Parkway - update

Sold off Ascendas India Trust at 0.68. I was getting impatient over this counter. Within the next 3 trading sessions, it went up to 0.71. The biggest problem with this trade was that I was looking too closely at the intra-day fluctuation and lose sight of my own trading rules. The second problem was to set the stop loss point too near to short term support where it is very often break. Allowing 3 bids below support would have prevented pre-mature sell off.

Healthway was sold at 0.10 and it closed at 0.105 on 17th July. There is not need to sell off if the counter has not breach the stop loss point. The fear of losing money has overcome me in this trade and prompted me to sell off prematurely.

Parkway was sold off at 1.69 on 17th July. The reason for selling was that on 16th July, it opened at 1.72 and was sold down to 1.68 during a super bull day. This caused me to get impatient over it since it kept showing sell down while other stocks are push ahead. Looks like it is going to go down. However, at the end of the day, it turn out that it was closed at 1.71. Now the counter looks a little bullish. Again, the same mistake as the above 2 counters.

The conclusion that I had drawn from these and many other trades that I'd made is that I must stick to using oscillator to monitor the stock and disregard the intra-day fluctuations. I should only focus on closing prices of each day and stop from playing intra-day fluctuations.

Playing intra-day fluctuations sounded like very cool and professional. In the end, the reward was not attractive and it is very much prone to manipulations of the bigger players. There is no point to get sucked into the fights between buyers and sellers. It would be wiser to sit aside and watch the outcomes of their fight before taking sides. In this way, we can know more clearly which is the winning side.

This is a very important lesson and it must be adhere strictly. As for now, using the combination of Stochastic and MACD and Moving Averages to trade seems to be able to make more winning trade than any other tools.

Golden Agri - New trade 15-7-2009

Enter into this counter because it has gone through a lot of corrections recently.
Stochastic shown greatly over sold.
This is quite a popular counter and very high volume transaction. Easy to buy and sell.

Enter price: 0.315.
Stop: 0.29
Close: 0.32.

May add more tomorrow. Depending on how the US market closes. Since there are good Macro levels news coming out, the market may move up in quite rapid speed. Need to be able to capture this uptrend.

Parkway, Ascendas India Trust and Healthway

Parkway
Entered 1.66, 1.72. Average price: 1.69.
Based on RMO Trading Method
Hold: closed 1.70.
With overall market uptrend, there is potential that this counter will move upwards. So far, it has held up quite well.

Ascendas India Trust
Entered 0.695
Exit at 0.68
Reason: Basis of trade was not well established. Chart pattern is not convincingly showing potential for uptrend. Even though it held its price quite well, there is too much negativity over India's new budget and outlook.

Healthway
Entered 0.105.
Exit: 0.100
Reason: Counter did not perform as expected. With low volume and interest, it will be difficult to move the price. Too small in volume and lack of interest by players making this counter illiquid.

Parkway, Ascendas India Trust, Healthway

Parkway
Entered 1.66, 1.72. Average price: 1.69.
Based on RMO Trading Method

Ascendas India Trust
Entered 0.695

Healthway
Entered 0.105.

SGX - Parkway - New Price Box?

Parkway price seems to trade on new "price box" now. It has broken the ascending triangle with a close above the triangle. This stock is a medium active stock. Average daily transaction is 3000 lots for the last 14 days. Latest price surge on July 1st 2009.

Entered: 1.66
Date: 2009-06-30
Price on 2009-07-01: 1.73
Support line: 1.68, 1.65, 1.50.
Original stop: 1.50, new stop: 1.64

Key factors to watch:
1. Stochastic over bought.
2. Potential wipsaw.