Wednesday, September 09, 2009

A sin called complacency

I been analysing what went wrong and how did my 20% returns since early of the year turn flat... one of the most important reason is complacency. Complacency is just a nice ang mo word for laziness. And we know in trading which is a highly intelligent game, one cannot afford to not spend the effort in analyzing. I self sabotaged myself by watching too much TV. I even made it an excuse that i need to balance life and trading to justify being a coach potatoe. How can i expect to build a fortune from trading when i am always catching the latest HongKong Drama Serials? I wasn't like this during the good old days. Every single night i would be looking at charts and Sunday afternoons are spent preparing for the coming trading week leaving only saturday for my ex-girlfriend. If i didn't make money now is because i have deviated from what was working for me. Time to get it all back. It makes sense.... in a positive enviroment, i get positive result. When i am in a dis-empowering mode, mana will make money? This explains my losses.

Following my purchase yesterday of Wilmar, i continued with DBS as part of my game plan. I grabbed DBS while it closed weak. I see today's weak and soft closing as a normal intra week pull back and expect the week to end on a stronger note. Part of my thoughts were on a soft Dow tonight which may lead local bourse to open weaker and thus get DBS cheaper. But who am i to dictate that to happen. Thus what i did was to know my E.S.P (Entry, Stop loss and Profit Target) and continue with the purchase. My next target of purchase will be property stock and may look at a second liner for off-shore services play such as ezra or swiber.. these crazy horses will fly. Remember what i said about wheel lock? That's why you see today, it really did retraced lower than where i have sold. And the China stock, Datang? It closed lower today. Just like mahjung..i feel this china stock falls under a good loss. It really seems unattractive on the charts now. I would rather look at China Coal which is a direct China coal play.

Another scenario i painted is, we close the weak lower. Upon close scrunity of the charts and judging from the follow through buying we got yesterday, this move should have legs. Which means to say, we should at least test the last high. But i do have to be objective and consider what if i am wrong. Then perhaps the market may falls back into the range. The observation of whether the selling is well absorbed is key here.

As for my HSI, i will cut if asia bourses breaks higher with 21k firmly taken out. As by then i think my long positions in stocks are poised to break upwards strongly. I will lose badly if HSI goes up and Singapore market crashes. Can this happen?

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