Wednesday, September 2, 2009

Trade 75 and 76 - Tale of my Bipolar Life

Bearish on the over-hyped market, so I decided to short the market at open to start Trade 75 - 3 ASX contracts @ 4431.1 - it was quite a feel based play - I was pegging this day's trade to be a trending day - hoping for another 30 points to the downside.
It's not a trade, where I thought technical precision was the number 1 point to focus on - overnight the US had broken key levels technically, and today's participants are likely to overshoot to the downside; I was a willing seller at any moderate upswing.

Saw the downswing happen at a moderate pace, so I thought it might head right on down towards the next pivot level, but it slowly turned around, as the GDP figures came in better than expected - I wasn't really following the news at the time, but I felt the trend was changing towards a long - so I exited the position at 4429 for a tiny gain of 2 points. The day was turning out to be a range based trading day - something I would've noticed if I had been following the news in real time.

I felt the rising tick and the momentum was enough to break the downtrendline - and I got into a long 3 contracts ASX position @ 4427.5 - basically for a scalp trade - 10-15 points maximum. Target exit 4439.

I wanted the move to happen quite rapidly - this was as much a time based trade, as opposed to just purely a technical trade - I identified the top range of the mornings downswing and set a price target at 4439 - but the price continually lagged and wouldn't swing higher - I lost my nerve and exited with a 1 point gain at 4428.5.

Interestingly - the price ended up hitting my price target before heading lower (only briefly hitting) - and I feel really good about my 'feel' for the way the ASX is trading in the past few days. I am getting more confident into the 'auction theory' concept of markets, trading ranges and how markets are reacting to expectations, overnight moves, expectations.

I am starting to get a better feeling for how leading stocks, financials, resources interact with the index, and as I trade these more intra-day I'll update my blog as to what I think works and what doesn't.

however, today's results can be summed up as MUCH ADO NOTHING.