Dave’s Trading Diary – Sometimes You Just Gotta Follow The Rules

Hi guys,

It’s not always easy buying into shares when the overall market looks shaky, or the news isn’t supporting your point of view. It’s times like those that you just have to realise that not every trade will be a winner – and that if you have a trading plan that has been tested positively over a decent period of time, this is the most you can do – the rest is up to the market.

It’s also times like these you can take solace in the words of Warren Buffet: “My idea of a group decision is to look in the mirror”.

But what about individual stocks this week? Well our long held RIV is still kicking along nicely. I’m sticking this one into a longer time frame now – a Dow Theory exit at around $9.40 will get me out of this one. Until then, happy to hold.

IGO is also still doing well after our buy at $5.35. GUD doing well after the Dow Theory entry last week, and BKN holding up a little above our buy price. I have a really good “feeling” about BKN – unfortunately my good “feelings” are not always right. Luckily it still had a Dow Theory entry last week so I can just follow the trading plan!

This week, risking 1% on IPL – after a close above its trend line and two previous troughs. Good or bad, IPL seems to trend nicely, and it has a lot of large holders to boot. MGX is a Dow Theory entry on a weekly chart. ABP is a Dow Theory entry on a weekly chart and PNA is a Dow Theory entry that is embarrasingly late. It looks strong so I’m happy to buy still, almost 10% later. All stops are below the previous troughs.

Like I said last week – it’s all about getting back to basics. Solid, tested rules and results. Not every one will be a winner – and that is why we use solid money management and of course, our faithful stop loss. And of course you are smart enough to know that these are merely my trades – not recommendations in any way. See Terms here.

It’s hard not to love the market. Always different, always a challenge, and if you have a solid, tested plan you can sit back, relax, and let that plan do the work while others get flustered over a bad news day.

Happy trending to all!

Dave