About Stop Losses

Wise words... while it's from the context of forex, it will apply to stocks investing too:

The fluctuations that are of regular occurrence seen in the market is a constant battle between the buyers and sellers to take control and is just part of the game and therefore should be anticipated in each trade.

You must understand that you need to stop trying to time the market at the exact time a top or bottom will happen. 

Hindsight makes this approach seem ideal but the big problem with this is that hindsight does not make you money. We can all successfully pick these ideal zones after the fact, but how many of us are consistently really making money? How do we counteract the effect of these fluctuations that destroy the psychology of traders?

The answer is the correct usage of a stop- loss, position sizing, and pending orders. 

We are all greedy by human nature and adjust our stop loss to meet our larger lot size (positioning) inside the killing zone of the market (normal fluctuations). 

Use a position size & stop-loss combination that meets the 1-2% risk bracket and a pending order that gives you a better entry and more importantly lets you walk away from the monitors. Adjust your position size to meet a stop loss that gives the trade the room it needs to play out that if in fact gets trigger confirms your analysis was outright wrong.

Micromanaging the market fluctuations is detrimental to your well-being and truly halts your development as a trader. 

Do not risk money that determines if the rent will be paid this month and focus instead on becoming proficient in a proven strategy. Focus on acquiring capital, if that means getting a second job or cutting back on eating out largely depends on your individual circumstances, but once your proficiency meets available cash, it will be all worth it.

You need the right mindset and practice “perfect practice” because if you don’t, I guaranteed you the market will gladly begin take your money away.

A stop loss should be placed in a zone where the trade idea becomes invalid.

Most of the traders place their stop loss in a way to achieve the risk reward they want, and this is completely wrong.

Source: http://www.forexfactory.com/showthread.php?t=589024

Forex Trading at 1-minute interval

Having some time today, I thought I would try tracking one of my trades at the one-minute interval.

I opened a long position at 3.14pm with the AUD/JPY pair @ 79.373. The price fell to 79.3 (see label 11 below) before it started a nice upward trajectory towards my target sell price at 79.57 (green line).

At 3.45pm, it nearly hit my target before falling 79.48.

At 4.59pm, there was a surge in price but again, stopped short (2 pips...) of my target price.

Having spent nearly a hour of my life and seeing a wedge forming, I gave up at 4.14pm and took the profit of 15 pips.

Mid-July Update

Haven't updated this blog for a while as I've been learning the ropes for forex, which I think is a natural extension to stock trading. 

Furthermore with the brexit event that happened on 24 Jun, I've invested my entire account into the HK market, expecting a good return in the short term. 

With Standard Chartered starting to charge a minimum fee from 1 August onwards, I will be withdrawing from the HK market.

Let's see what the ending score will be.  

Bought - Ozner (2014.hk) for pyramid

Bought 1K Ozner (2014.hk) to form a pyramid with the previous 2K I bought on 6 April.

I decided to buy into the pyramid as I think the MACD still looks like an upward trend is still present.

Chongqing Iron (1053.hk) - Striking while the iron is hot

Bought 2K of Chongqing Iron (1053.hk) shares at $1.11 last Friday (8 April) as OBV and RSI remained on their upward climb on the 1-month, 10-days and 15-min timeframes.

Initial stop loss level at $1.02 has been raised to $1.07 :)

Looking at a target of $1.70, which is a far cry from its pre-fall price of around $2.60 in Jun 2015.

Will this metal company sink or fly?

He who hesitates is lost

"When a stock turns against your premise

and moves hard opposite your position,

you need to sell as soon as you recognize it.

Yes, it could turn and you could permanently book the loss,

but it might keep going and you can lose it all."