Thursday, April 2, 2009

I finally know why I made a premature exit from Sino

After thinking for the past 3 days and 3 nights, I finally realise why I made a premature liquidation on Sino. It was because I was saved from such a decision in an earlier trade (a short position on S&P, and had I not liquidated that position earlier than planned, would have made me lose lots of $). Only problem, is I guess, it had its carry-over effects, that pyschologically, I began to accept that early liquidation seemed okay. So really, what comes around goes around. Whilst I was saved from losing lots of $ earlier, I now made a "huge loss" from not being able to follow through with my trade. Therefore, I am beginning to approve of this bad habit of early liquidation.

Now, I need to tackle these issues. In fact, from the short GBP/JPY trade onwards, I made a trading mistake. I read that trade wrongly as fib retracement. It should never be. Then proceeding to the S&P trade, although it's in a short trend, it is a tired trend, and so a reversal seems inevitable(I should never have entered that trade). But, for Sino, it is different. It is in the very early stages of its own bull market, therefore things will definitely be choppy. Only if I had more conviction. I can finally seek closure now.

We are still in the midst of a bear rally, albeit a powerful one. Nonetheless, this should lay the foundation of a shorting opportunity later on. Unfortunately, I could not join in this rally, as originally planned (I had to pay for earlier mistakes). On the other hand, if this truly turn into a new bull market, I would only be too happy to join the longists once more. But this time, I will stick to my plan.

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