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20-03-2020 11:54 AM
I do not trade a lot. I very rarely trade with gearing. Over the past 11 years since I started keeping a trading diary, I have made more "winning" trades than losing trades - not by much, but still I am up in terms of % trades sold in the green. My trading portfolio, however, is down. This is due to two rather large losing trades. The first I neglected to set a stop loss, and the second (I'll admit, I tried a small scalp when SNH was plummeting) the price fell way through my stop loss.
But what really irritates me, is my last losing trade two days ago. I have owned and watch SPAR for almost 20 years now. I keep track of its price and value according to limits that suit me. So for me, when SPP drops into a PE range around 14, it starts to creep into value territory - for me - given its historical range. So when SPP started to drop into this range on around the 5th March, I thought I would take a small long trading position, and set a reasonably conservative trailing stop loss of 15%. A Covid-19 buy, so to speak. I bought in at 16900, and had a target exit of around 18500, and i thought this fair given that its ranged up to 20000 recently. Anyway I got stopped out when SPP dropped on Friday 13th (go figure). Theory is I should be happy that I didnt lose all. Problem is, I still think there was or is value there, and lo and behold today, the price has been hitting the mid 18000s.
Ok - so this is irritating for me, because my value theory seems correct (up to today at least), but my stop loss was too tight (15%!!!), so my system needs adjusting....and the big adjustment I need to make is that I MUST NOT TRADE ANYTHING DURING UNCERTAIN TIMES!!!! Clearly no matter whether I think a share or index might be value and a buy, I need to stay clear until there is very clear direction (I read Simon's blogs, but clearly dont absorb his rules)....lol.
23-03-2020 11:11 AM
I thought uncertainty was the fuel of trading - what is clear beyond clear is that stuff will respond to any news - it doesn't matter how relevant or irrelevant - and then at the bottom of all this
is value - and clearly there are areas of value to be had - which in "normal(?)" times people would be falling over each other to buy - but that all goes out the door - when irrationality sets in.
So I am buying slowly more - with a real target date for action mid April . But if someone discovers that the treatment for Ebola - same range of disease apparently - helps mitigate the period for recovery -
then the flood of money will come back - very quickly. And once the rate of expansion becomes linear ..ditto.
If a quality company loses a years income - so what ? They will survive - and they will buy up over borrowed but quality businesses. But you say - the bankers will close down stuff/businesses? What is the point viewed from their perspective to foreclose
- what are they going to do with the assets ? So they won't and - that does not detract from the first point Anyway I am off to buy lavatory paper. if I can find it!