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.