Tuesday 11 December 2012

A lesson

Yesterday (Monday) I took a small loss - 10 points.  There is always a lesson to learn when this happens, and it's always tempting to walk off and try to forget what happened.  The best thing to do is to go back and look at what you did.  The chart below is a 5 minute chart of the Dow.  I saw a test in a rising market in this chart at Point A.  The market did not respond and instead went sideways, at which, at a 10 point loss I got out of the trade.  It turns out my analysis was correct - the market went up.  However, the lesson is - stick to your trading plan.  My plan says to trade on the 10 minute chart, and because I did not do this, and knowing this, I lost courage and closed out.  So stick to the trading plan, no matter how tempting it is to do the opposite!


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