Took small profit on Wilmar

I have sold my Wilmar position for $6.43. Short-term bearish outlook in asian markets. I am expecting a small downturn. So next I will probably be looking to buy on a dip. But do expect the unexpected.

I do not expect anyone to follow me on my trades, and I do not blog while I am working in my office. So it is best if you inform me of a similar position you have, so that I may notify you of my actions by other means.

It does not matter how you profit from the market. You may be tossing a coin or throwing a dart at a board. If you are profiting, I am happy for you. What is really important is you are actively managing your own risks. Take ownership and responsibility for your own risk.

I only risk 1% of my trading capital on each trade. So the outcome does not affect me much in any way. That is the way I want to trade. In control and in balance, I am proud to declare my conservative trading stance.

Once upon a time...

in a land far far away, there was a beautiful meadow. On this meadow, there is a straight road. By the sides of this straight road, there were numerous coins of gold scattered. A traveller heard of this wondrous place and ventured forth along the road, happily gathering as much coins as he can. But just when he is so happy and elated and wanted to go back home. He seemingly fell into the ground and was not seen or heard from again.

Hundreds of travellers came forth too to this wondrous land. Some have seen the first traveller fell and ventured forth cautiously. Others started to gathered the gold but was determined to stay clear of the ground through which the first traveller fell through. Some crawled along. But one by one more and more travellers were seemingly devoured by the earth along the path. They were puzzled.

Soon a band of strangers came. They had ropes, poles and other equipment. They lassoed their ropes to the other end of the road where there is a tree and soon they had a tightrope across the meadow, along the path. They even had safety ropes and tied them to their harness. They probed the ground with their poles and started balancing on the tightrope.

'What were they doing?' Some travellers asked. Others ignored them and just picked their gold. Yet others taunted them 'Are you all out of their minds? There is a road to walk on'

But as the poles probed the ground, the ground gave way, revealing a steep canyon instead. This band of strangers deftly balanced themselves on the tightrope while scooping up the gold coins. Some of them fell, but because of their safety ropes, they fell not too far from the tightrope. They rested then hauled themselves up the tightrope again and continued scooping up the gold.

The stock market is just like this meadow.

Quote from Philip A. Fisher

'Doing what everybody else is doing at the moment, and therefore what you have an almost irresistible urge to do, is often the wrong thing to do at all.' ~ Philip A. Fisher, author of 'Common Stocks and Uncommon Profits'.

Did not cut Wilmar

Well, I did not cut Wilmar. Maybe it is intuition from experience or maybe it is just the emotion of fear and hope (hope is a form a fear, eg. you hope you will get promoted, because inwardly you fear you may not have a chance. Otherwise you should know and expect to be promoted. But hope really has no place in the market, because you never know what to expect or rather you expect the unexpected).

But I did think and analyse and intuit that a rebound may be in the works. Dow's high is higher than previous session's high, STI seems to be in the process of taking out the previous session's high too. And if Dow continues, chances are high that Dow could test 9400 again in the next few days.

Yes, maybe some of you may feel I give too much leeway to my stops, not really respecting it. Well, I use my left AND right brain to trade. Mechanically using the left brain only as in pure systems trading is like using one leg to walk. You may hop vigorously for a while, then you fall.

I say risk management is paramount. Stops are tactical tools, TA and FA strategic tools. They are TOOLs. When I risk only 1% per trade, I remove a lot of emotion from my trade. And I can use my tools with clarity and whole brain function instead of just half the brain.

Thank you for reading!

Bought Wilmar

..at 6.28, my waiting bid, and ended at 6.09 at the end of the day. Oh well, let us see how it fares tomorrow. Maybe I should buy once it hit 6.34 instead, but then I chose to be aggressive and let the bid stay. I do not regret it. The risk is acceptable to me. I did not cut my loss immediately upon 6.18 because I want to see that price level being accepted.

So let us just see what happens tomorrow. If at 9:30am, the price is lower than the open, most probably I will cut. But if there are signs of a bullish reversal, I stay.

Looking at Wilmar

I am looking to buy on a dip. Hence if Wilmar goes to 6.34 and more I am considering in. My stop is 6.18. Risk is 16cts at entry 6.34. 16X3=48cts implies my target must be 6.82 thereabouts. Hmmm... very close to 6.9. If my entry is 6.38, risk is 20ct, my target needs to be 20X3=60cts more, i.e 6.98.

Entry Target

6.34 6.82

6.35 6.86

6.36 6.90

6.37 6.94

6.38 6.98

Considering my risk per trade, I think I will just bid at 6.28 now, look at the Dow in the morning and see whether I need to adjust my bid to a max of 6.34 (bullish), withdraw entirely (bearish), or just wait at 6.28 (mildly bullish)

Bye, bye UOB

Ok the STI was looking too bearish for my liking. It ended at -3.25%. Other asian markets were similarly bearish. Hence I sold my UOB at 16.3. I bought at 16.28. Hence, I lost on commission. My friend ask me why I did not take profit the day before or so when it went as high as 16.9. Well to be frank I was tempted, just like any of you would be. But for me, this scenario has occurred before. And I find that on the numerous occasions that I chose not take the small profit but let the market fluctuate against me a little bit, I managed to ride the profit much, much higher. In the longer term of 20 or more trades over at least 6 months, the difference becomes apparent. You just need 2 super trades that gives you 12 times more profit than your risk. And you will see the fallacy of taking small profits that occurs more frequently.

Remember you will have also have losses. Small profits can hardly cover your losses, even if your win rate is 70%. Remember the GOLDEN RULE always: Ride your profits, cut losses small. Win rate is seldom important in trading profitably consistently.

Re-entered with UOB

..at 16.28. Basically I saw what Dow was doing in the morning and I bid 16.28 for UOB and 6 for Wilmar. Come morning, I got in UOB at the low of the day. Talk about being so lucky twice in a row. First time was Wilmar, I bid at 5.4 remember? It was the low for that day, before it trends up to 6.07 where I exited after 2 weeks.

Now it is UOB's turn. 16.28 was the low today when it dipped and bounced off 16.28. When that happens, you just feel so lucky, especially when it ends at 16.6 for the day. But let us not count the chickens before they hatch. Right now I am looking at Dow and it is sliding.

Why did I bid at 16.28? Technicians will instantly see why I did that. Candlestick the previous day is a very nice reversal doji. It opened and closed at 16.28 that previous day. And frankly I am not willing to chase, especially since the earlier support I gave you all was at 15.7. So I just bid and waited at 16.28. 15.9 is my stop for risk of 2R. Reward/risk is about 3:1. OK, fine.

I hope I not getting too creative for my financial sake. First time risking 2R since I started this blog.

Stalking mode 'ON'

Ok now, it is stalking time according to 'The Three Skills of Top Trading' by Hank Pruden. I am looking for entry.

Based on TA and reward/risk analysis. I am stalking UOB and Wilmar at this stage.

Bullish scenario tommorrow
UOB 16.6 trigger, 16.2 stop, that is 40ct risk == 2R++, NO GO
Wilmar 6.2 trigger, 5.95 stop, resistance 6.3 NO GO

Weak scenario tommorrow
UOB 15.6 to 15.7 support, 15.55 stop, that is fine, i will bid and wait at 15.65 or so. Reward/risk is 3:1 or better
Wilmar 5.85 support, 5.75 stop, fine too. I will bid at 5.85.

So the buy at support strategy is ON. Breakout NO GO.

I usually plan for at least 2 scenarios and I can plan without quantifying all the above, because I can just look at the chart to tell me all this at a glance. But for your benefit, here they are.

Monthly Review of Trades (MRT?)

Ok it is MRT time again.

For July 09, it is simple.

Keppeland 24/6 2.13 bought
8/7 2.03 sold
profit/loss = -0.78R

Thats it!

I have broken my green streak of 3 months. I am in the red this month! Yay!

Well if you have followed my blog closely, I chose to ride Wilmar into August and sold it for a profit of 67cts. So I really have no complaints being red this month. Anyway it is a good solid color!

Wilmar took profit

I have sold Wilmar at 6.07 for a gain of 67cts. DBS holders (those that I know of), I did sms you all to sell around 13.74.