Archive for May, 2012
Every trader has heard of the trading adage "Hold onto your winners and cut your losers"... in practice, this is actually quite difficult to do as people have a habit of closing their winning trades early to secure their profit but have a habit of holding onto their losing trades in the hope that they may cover. This behaviour is universal for all investors or traders to the stock market and is known as the Disposition Effect.
I recently learnt of the Disposition Effect through attending
May 19, 2012
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The markets have taken a bashing of late and extremely oversold. Silver has had 10 straight down day and you would expect a bounce. Two nights ago there was a pinbar showing support and then the following day, a green bull bar. I bought at the close of this bar at 28.05 and it rode up nice today. I closed out today at 28.76 for 71 points.
I closed for two reasons... the market is still in a downtrend and after a weekend, anything can happen with the markets.
It was nice to grab 71 po
May 18, 2012
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You remember the trade that I put on the other day. The disappointing thing is that the support which we had identified didn't hold and the price action crashed through it and took out my stop for 140 points.
Disappointing, of course, but in trading you have to expect these losses. As a trader so long as each maximum loss is your defined percentage loss (in my case 2%), it doesn't matter. I was able to stick through my plan and it didn't come off. I was talking to some other trader friend
May 16, 2012
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