Coaching Call Week 14

I greeted coach Rob (as I've taken to referring to him in my blog) with the statement: Rob, I have a problem... Oh? ... Yes, I have several trades that are working for me! Granted this is a very good problem to have, but it is a problem none-the-less. I had 5 trades going my way and 1 that was just doing so-so, which was probably going to go against me for a loss. Of course this is the kind of problem you want to have, but I don't have much experience with. We looked at how to manage these positions which for the most part was to just relax and update my stop position when the trades had moved enough to warrant it.

We got to narrow our focus in on a couple trades. First I wanted his feedback on my short-sale of ROK, which I was kicked out of yesterday. Basically what I did wasn't wrong, though I could have tightened a little or even bought back half of my position as the stock came very close to the move that I wanted, but aside from some institutional buying at the end of the day on Monday and a speculatively positive news item, there wasn't much that could have been done to make this trade much better.

We watched T fall down to my stop and see me get kicked out of the trade. This was fine, though once again I could see the trend on the daily chart and probably could have just closed the position earlier to realize a better gain. This was educational though as I could see the value of Technical Analysis on a different time scale.

That's one great argument for Technical Analysis. Since it's a study of mass psychology and sentiment, you can make judgements based on what the chart tells you no matter the time frame nor the underlying security (though I don't plan to trade futures nor commodities anytime soon). We could both see that T was in a downtrend on the intraday chart and I really should have exited my long position earlier and just taken the my profits. I'm not upset about it, but it does bring to light that the trade management rules need to be as mechanical as the entry rules. This has been easy enough when I was dealing with losses, but on these trades that actually went my way, I realize I need to have a consistent method for managing the trade.