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Wednesday, August 24, 2011

Random Thoughts

Despite the market volatility, I have made many trades in August. So far, all of them have been profitable ( the profits are quite small though since all of the trades were intra-day ) except two trades:

1. August 18 : Yangzijiang ( Long Trade ) - My stop loss was triggered (entry 1.115, stop loss 1.09)
2. August 19 : SGX/Wilmar ( Short Trade ) - Exited at cost because prices didn't dip much, lose $150 in commission

I have learn several things from these trades:

1. This market is all about "tikum", not technical analysis. If you have made a correct bet on how the market may behave the next day and buy ( or short ) today, you win. If you bet it wrongly, you lose. The market is not giving you a chance to make money if you enter the very day itself ( ie: if you didn't short or bought the day before ) because it will either gap up or gap down. There is no meat left when you jump in ( this is especially true for shorting ).

2. The market not only required us to "tikum" but it has been very tricky too. Within the same day, the market can move up and down to cross the zero mark 3~4 times!

3. Brokerage commission is very crucial. Take the 2nd losing trade ( SGX/Wilmar ) for example, even with cost in cost out, my losses are $150 ( Poems CFD DMA ). I have resolved that I should focus on my CityIndex CFD account where the commission is $10.70 flat per trade regardless of trade size.

There is no change in my market view per the last post. I suspect we are heading toward the first down leg of 2008 bear market. I will be watching for sign of recovery but for now what I see is lower high, lower low ( which is a bear trend ).