Trading Diary Update March 2010

See the Trading Diary Here

Hi guys,

On friday I bought some NWS – after a continuation pattern entry.  Typically, if a stock has confirmed its weekly trend already and I missed the weekly entry (where I would usually risk 2% between the entry and the stop loss), I will scale back my position to 1% and enter  in the same direction using a daily chart to hone the entry.

It is important to trade with the larger trend – but it’s also no fun to miss out on a trade just because you missed the one strong signal you might get every year on a weekly chart.  So going down a time frame to the daily and lowering your risk is a good way to do it.

Currently we’ve had around 6 months of sideways action – not the most fun trading environment if you’re looking for longer term signals.  Of course some people will say they have used “channelling” or maybe even option strategies where they supposedly sold the highs and bought the lows.  Of course, hindsight is a beautiful thing.  I prefer to ride the trends when they emerge.

Other trades late this week have been GMG and BEN.  I’m trying not to take on too many new positions until the overall market makes its direction clear – and as you saw in this week’s Market Watch the ASX Top 200 has that resistance at 5000 to get over first.

Still it’s great to be amongst it, and so long as the stops are in and the risk is not too high, I can sleep soundly at night.  Follow these simple rules, and you will be too.

All the best,

Dave McLachlan

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March 28, 2010  Tags: , , , , , , ,   Posted in: Dave's Trading Diary

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