Friday, January 27, 2006

FKLI Feb 06 Oops! Trade – No sell stop is placed

My actual Entry strategy
a. I checked the open at 8:45am. The price opened gapped up at 913 and 907.5 for Spot and Next Month contract respectively. I did not put any sell stop as the trend is up. I would rather trade Oops! trade
b. The FKLI Feb 06 price hit 912.5 high in the morning and came down to 907. The price just did not touch 906.5 It is reflection of the gapped-down day on Jan 23 06.
c. After lunch, the price hit up to 913.5 even CI is just moving up 2 something points.
d. The volume for Feb 06 exceeded that of Jan 06. This implies more buyers coming in the market for Feb 06 than Jan 06.

Trade executed according to plan? Yes

What I have done best:
a. I do not follow Oops! entry as the trend is up, I will trade on Oops! Buy until the trend changes (it is quite subjective).

What I need to improve:
a. I need to continue to be consistent with my trade management.
b. I need to back-test Oops! with trend following.

What I have learned:
a. The results of Oops! signal were very discouraging:
i. 2 Oops! signals with initial run but profit is little or there is small loss.
ii. 2 Oops! signals with price opened gapped-down and closed down.
iii. 1 gapped-down and closed down and 1 gapped-up and closed up.
iv. However, this has not disappointed me as I feel the big trade is coming after 4 or 5 lousy Oops! signals.

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