15th June 06 - The Day I Made S$6 From Trading

As you read the headline of this post, I know some of you may think "What's so great about making 6 bucks from trading ?" On monetary sense, well it's really insignificant but it's the reasons behind all the trades that made this day meaningful to me :)

Let me share with all my trades:

Trade 1
Bought HangSeng @ 15,400
Sold HangSeng @ 15,369 (loss of S$330)

Trade 2
Shorted Taiwan @ 266.6
Covered Taiwan @ 266.3 (profit of S$38.60)

Trade 3
Bought Taiwan @ 265.1
Sold Taiwan @ 265.2 (profit of S$6.80)

Trade 4
Shorted Taiwan @ 265.3 and 265.1
Covered Taiwan @ 265.0 and 264.1 (profit of $156.70)

Trade 5
Bought Taiwan @ 265.0
Sold Taiwan @ 265.9 (profit of $134)

As you can see, I begin the day with a loss in Hang Seng. After the loss, it sets me thinking: should I just stop for the day or should I repair this trade as much as possible? Soon after, I chose to repair the trade but only to the extent the MARKET ALLOWS ME TO. Please remember that the market doesn't owe any of us a living. It doesn't pat you on the back and say "Don't feel sad over 1st losing trade, let me give you a chance to make back you $$, ya?"

The subsequent trades (Trade 2 to 5) are all recovery trades. If you look at it closely, Trade 2 and 3 gave rather insignifant gains. The reason being, the market was starting to go against my position and if I had got it out at breakeven or small profit, they would have turned to losing trades. Imagine if I lost again after the 1st trade, it would be uphill task for me to repair. Conversely, when the market runs for me, I will maximise my gains, as seen in the last 2 trades. That's my take on "minimize the losses and maximize the gains".

Trading is all about planning, akin to running a business. After I completed each recovery trade, I would punch in my calculator to tabulate the running profit & loss so that I know exactly how much to achieve before breakeven. So now, you begin to realise that the $6 profit isn't a coincidence, ya?

The recovery trades also helped me to gain back my 'feel' of the market and re-established my winning momentum. As such, I look forward to great trading days ahead :)


PS: Recently I have received very good reviews from my readers. Thank you very much. I will continue to share.

PPS: Please do refer your friends to my blog if you find that they can benefit. Remember, what goes around comes around. It's always good to share :)