Critical Moment - Lesson Learnt
The heavy selloff in the world financial market has made me cut losses in my CFD portfolio. Although I didn’t open any new spread position for the month due to the market volatility I also didn’t sell my existing CFD portfolio (my intention was more for the long term, but I think it’s cheaper to get out now and get back in later when the market finds some support.
The Trade
23rd July 2007: Buy 400 HAL @ $37.547 ($15,018.80)
15th August 2007: Sell 400 HAL @ $32.51 ($13.002.80)
Donation: $2,016.00 ($2,470.80 AUD)
13th July 2007: Buy 500 CTX @ $24.924 ($12,462)
16th August 2007: Sell 500 CTX @ $21.35 ($10,674.50)
Donation: $1,787.50
20th June 2007: Buy 1,500 ZFX @ $19.095 ($28,642.5)
15th August 2007: Sell 1,500 ZFX @ 16.23 ($24,342.00)
Donation: $4,300.50
Total Donation: $8,558,80
It was quite interesting to see myself react during this period - clearly not the way I liked. I saw the break in resistance on the All Ords on the 27 July 2007. It was a technical failure after several double tops which spanned 2-3 months. I told myself I should buy a put (insurance) and sell my long positions, I didn’t listen to myself and let many of my profits errode and my losses compound. For all my readers, I hope you learn a lesson from this failure.
Lesson to be learnt:
- General: Read old post - I drew that same lines on 27th June 2007 - Check it Out
- General: When there is a technical change in the index close out all positions as soon as possible (especially if it is a winner)
- General: When the taxi drivers or random people on the streets talk about buying shares, reduce your exposures
- CFD: When your position is up 100% buy insurance or get out
- CFD: set your stop loss, trailing stop and profit target before you turn off your computer
- General: Follow your own rules
- General: Respect the double/triple tops - i obviously didn’t
