Robbie Burns’ Trading Diary
“We need to just change our minds if we think we got it wrong.” The stop indeed would have worked, as it ended up going under 500. But I would have lost a lot more money by just relying on the stop.
What can I learn from this? It’s fine to take profits on those trades — but I should learn to re-enter them as they break out higher.
If the trade had worked and the share had carried on rising over 600 instead, I could then have changed the stop to breakeven at 575 initially, and then relax with the trade.
We’re heading into the end of November now which is usually horrible. At the time of writing a lot of stocks are getting creamed.
So, what I think I am saying is the first day or two of a trade are probably the most important. If the trade works then you can relax, move a stop up. One thing I know I have been doing terribly wrong recently: and that is selling winning trades too early. The worst one was Smiths News. The trade plan worked, buying in the low 90s and selling at 110 where there was previous resistance. It’s now 150. Bah! And the trade I talked through a couple of months ago, Playtech. Again the trade plan worked — bought at 325, sold near 400. Now 425. A good profit but could have been an even better one.
Check out my Naked Trader 2013 diary which you can buy on this link http://books.global-investor.com/books/868876. htm?ginPtrCode=10453. I see some of the weakest days of the year are on the way. Back end of November and early December often see falls. Many of the weakest trading days of the year await. But this has an upside because after such heavy falls, this can lead into a nice Xmas rally. So my thoughts for now are to hold off, then snap up stock on a particularly bad day, then wait for the rally... Happy trading.
Robbie
December 2012
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