Saturday, May 17, 2008

Trade: Ferrochina, Sembmarine, Hang Seng


Ferrochina made a higher high in price and therefore technically, it is a successful trade (as indicated by the red lines).

I had some difficulties taking positions off the table when I was managing my risk and only managed to take some off after the third attempt. I will be using channel targets to take profits in the future.

I did not attempt to take the second retrace in the trend as the cycle indicator did not go as low as I like. There is also a 9-wave count on momentum to the upside.

Grading:
Performance: B+
Win/loss = Win
Total cash outlay = ?
Risk (entry price - stop loss) = $0.15 per share
Gross profit as a % of risk = 73%
Gross profit as a % of cash outlay = 6.9%
Net profit as a % of risk = ?
Net profit as a % or cash outlay = ?



Similarly, Sembmarine made a higher high in price and therefore technically, it is also successful trade (as indicated by the red lines).

I have no difficulties in taking half my position off the table in this trade; the problem was I took some position off at the wrong price as I did not have the price target information with me. That mistake will be corrected.

I am waiting for the second retrace in the trend.

Grading:
Performance: B
Win/loss = Win
Total cash outlay = ?
Risk (entry price - stop loss) = $0.27 per share
Gross profit as a percentage of risk = 78%
Gross profit as a percentage of cash outlay = 5.3%
Net profit as a % of risk = ?
Net profit as a % or cash outlay = ?


I traded two mini Hang Seng index (MHI) contracts.

We do not know for sure but it looks like a failed trade for now. I made a few mistakes and have lots to say about this one:

1) I should not have entered into the trend to begin with. The long-term chart showed a flat MACD and I should have followed my system and stand on the sideline.
2) Not only did I enter a trade that I am not supposed to enter, I also made the mistake of chasing the market and not sticking to my entry price at 25,515. I entered more than a 100 points higher at 25,650.
3) Despite all the mistakes, I still have the chance of making a decent profit but I missed the target selling price by 2 points.

The main reason for point 3 is the simple fact that I am trading with the trend. Even if the trade turns out to be wrong for whatever the reasons, you can get out of the trade unscathed or take some small losses.

The only thing I did right was to manage my risk and to take a $83 loss for the whole transaction.

Grading:
Performance: D
Win/loss = Loss
Initial performance bond = $4,502 per contract
Risk (entry price - stop loss) = $1,620 per contract(this is the worst mistake)
Gross loss as a percentage of risk = 0.05%
Gross loss as a percentage of performance bond = 0.2%
Net profit as a % of risk = ?
Net profit as a % or cash outlay = ?

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