Tuesday, May 16, 2006

So bad, it's embarrassing

Day 30 - Tuesday
Total Account Value: $4315
Available Equity: $3345
Positions Opened: 3
Positions Closed: 5

Ouch, that really hurt. Don't laugh at me people...

The market fell again for the third consecutive day and although some of my positions were holding up, big collapses in NCM and ARQ are largely responsible for that horrible looking account balance. Newcrest Mining, which broke out from a triangle pattern on the 8th of May, had been performing quite well despite all the chaos surrounding it. Yesterday it closed a small downward gap and despite my nervousness on resources stocks, I had picked this based on long-term charts was confident it would see it through. As such my stop loss remained very loose to allow for volatility. Today it plunged 6.4% right through the 20-day SMA and the few days of handy gains turned into maximum loss.

Arc Energy was a similar story - after 3 trades on this stock I have lost a total of $276. The price really doesn't seem to pay much attention to support and resistance. Iluka Resources (ILU), which I had shorted, bucked the trend and began to rise through my stop loss. Once again winners turning into losers. Luckily PMN held out and RIN exhibited further weakness.

The paradox I faced today was watching strong movements happen everywhere but being unable to find many safe entry points. The problem with transitioning from a short-term trading style to an "enter and hold" one is it must be built up slowly. Many stocks have been hovering around long-term support and resistance and are indecisive about when the move will be made. BSL, CSR, ABC, IAG, AWC - the list goes on and on. I really shouldn't be going long until the bearishness has passed and it would be foolish to go short when they seem to be closing in on a reversal. It seems the only lucrative shorting options at the moment are BHP, RIO, OXR, ZFX, FMG etc. but that is way too speculative for me. Without patience I will only continue to bleed.

The promising fact is that I have noted down a list of stocks that appear close to reversals when I couldn't find any at yesterday's close. Something's gotta give.


Anonymous Anonymous said...

i'm not laughing. how can you short oxr & zfx when they gap like they do?

maybe you're overtrading?

7:50 pm  
Blogger Trader Andy said...


I can't short them because they gap like they do...but if you're a brave punter and go for it you could pocket 6% or so.

9:38 pm  
Anonymous Anonymous said...

if inflation bear is stirring from his long slumber then banks are good short candidates

8:40 pm  
Anonymous Anonymous said...

quit yet?

11:25 pm  
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3:17 am  

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