The smarter you get, the more humble you become

"The smarter you get, the more you realize how little you know. The more you realize how little you know, the less willing you are to only use that information." by Erich Schiffmann

How true that is! How often have you heard a kid talk like a 'know-it-all', only to think to yourself "Well they are still growing up, they will know better when they are bigger". Lots of times I bet. (Although sometimes I still marvel at how intelligent kids are becoming nowadays. I know, kids are indeed smarter nowadays compared to 3 decades ago).

ST Engg Sold at 4.31 on 17th May

Sometimes people do not report their losses or results that seem insignificant. I am guilty of this as well.I simply forgot all about it til the time comes for me to enter the trade into my trading journal. Yes, a trading journal is useful and sometimes insightful, though it can be a little boring to do it. Anyway keep one if you need to improve at some activity be it trading, swimming, dancing, chess, dream analysis or what have you. You will  naturally progress to a point where you may no longer need it in the same way as in the initial stages. Then the 'learner bicycle wheel' will naturally not be needed anymore. And you will probably monitor your progress in a different way or use different formats or structure in the journal.

ST Engg has a dividend of $0.138 per share. So actually I still gain a little from this trade.

Hunger - the ultimate force?

"No fear can stand up to hunger, no patience can wear it out, disgust simply does not exist where hunger is; and as to superstition, beliefs, and what you may call principles, they are less than chaff in a breeze."
 - Joseph Conrad

I recalled when I was younger in my teens, a friend named Karthik once asked me: "Alex,  what's the greatest satisfaction you can have in life?" Being a teenager, raging hormones and all, I think I blurted out "Sex!" 

His exact reply: "No, the greatest satisfaction you can have in life to to satisfy your hunger. That is better than sex." I was totally mystified and confounded then, and I went something like "Huh?? Are you sure?"

Those were the days when we were young and innocent. 

Sold DBS at 17.59

DBS got a recent high of 17.9. Today is also the ex-dividend date for DBS. Meaning today it start trading minus the dividend. On Friday, the previous trading day, it was still trading cum dividend. I sold today and will still collect the dividend simply because those are the rules for the ex-dividend date. But anyway I sold off not because of the ex-dividend date. I sold because my trailing stop is breached.

On Thursday, I did toy with the idea that I should add a buffer for the dividend of 0.28 to my existing trailing stop of 32 cents, i.e trail by 60 cents. So that I may get the dividend as well. Come today, I am confirmed for the dividend, the trailing stop reverted back to 32 cents since it is ex-dividend. 32 cents south of 17.9, there is a nearby support of 17.6. Hence I used the support level as my stop loss level instead.

Thus I set my alert for 17.59 this morning, and later nearer noon it was triggered, and I sold off straightaway at the market.

Profit is $1.83 per share which is 5.7 times more than what I risked. Nice! Come 4 July 2013, DBS will pay me a dividend of $0.28 per share. Nice, nice!! : ? (slurping the cream off the cake).

Total profit is $2.10 per share! My reward is 6.5 times more than my risk! Yum! Yum! It sure tastes good :)

DBS at 17.70. What now?

With a gain of near $2 per share, how now brown cow?

Well howdy, cowboy, you ride... you ride on! Never be in a hurry to get off the horse while the horse is still getting you somewhere. Just ride. Yee hah!!

So what I do? I trail a stop. Today DBS did a high of 17.77, I just shifted my stop to 32 cents below. I maintained my risk exposure. To me everyday is a new day, and while I am in a position, I treat it as a new position each day.

For example, today, I treat my position as closed with a profit of $2.01 per share (17.77 - 15.76), even though it is still open. Then I will treat tomorrow as having a new position of DBS with entry at 17.77, the high of today. Thirdly, I apply my risk of 1% of my equity, i.e 32 cents still, and my trailing stop is at 17.77 - 0.32 = 17.45.

That is how I ride my profit. I do not take it sooner. Taking it sooner deprives you of further profits. Frankly I prefer not to set any target price. And that is my post for today folks!