As planned, I closed my SDS trade at the close.
My average entry price was 20.25. I sold it for 20.57, for a gain of 1.6%. This small gain is nothing to brag about. The only reasons I’m writing about it are because I blogged about entering it-only fair that I blog about the exit- and because I’m not very good at discretionary trading. This trade was managed well, no emotion, no panicking, and I’m rather enjoying the fact that it was well-executed. Perhaps I’ll attempt more in the future.
1275 may have been a better tech point to exit.
With the world falling apart and all.
I’m sure Italy will be “saved” any day now.
True, but when I started the trade, I didn’t expect to stay in it long, and it wasn’t based on anything fundamental, like Italy defaulting and the Euro collapsing. I think it is important to stick with the plan. At least that works for me. If not, I change things so much that I don’t even know why I’m still in the trade.
Nice job. Looks like we’re going to open green.
“….Perhaps I’ll attempt more {discretionary trading} in the future.”
–Quick followup comment, to my two prior on this.
When following a “rule-less Way”, the psychobabble elements of investment, the stuff that people like Dr. Brett Steenbarger and others always focus on, really rises in importance. When one is approximating a kind of machine trading (as we previously discussed), it doesn’t matter much what one’s mood or tendencies are. This line crossed that line on a chart, sell parameters drop into place, sell is executed; reverse for buy.
But to have to distinguish WHICH nose-twitch or gut-sense is primate emotion, to be ignored; and which is Sufi direct-knowledge emerging as an instinctive sense, from some disciplined trained brain saturated in data (like a fiction writer saying “my characters took over”, which is ludicrous–though true, and commonplace)… and therefore NEVER to be ignored… that is flat out difficult, and there is nothing fixed and certain anywhere.
However there is an important consistency one CAN follow, when following a “rule-less Way”, and that is TO LOG each time you do it, in some way that is significant, yet minimal enough that one actually does it. Each time, same process and routine: PREP; ACT; LOG.
And the minimal LOG must always be value-neutral and self-assessment neutral. No, You genius, no You bum.
In this way one’s own patterns emerge, along with the perceived patterns of the financial markets. And as a fringe benefit one attains enlightenment on behalf of all sentient beings, and becomes very wise and mature. This side bonus is what Dr. Brett was constantly pointing to as a corollary benefit, in his many blog articles.
Daniel
Excellent points Daniel. I have long been a proponent of logging trades. You have done a good job of identifying the difficulty in knowing whether or not an instinct is to be trusted. By logging each trade, a pattern can be developed to determine which instincts were actually correct. Thus, through this consistency, we attain enlightenment, or at least we learn which instincts to trust!
🙂