Wednesday, October 28, 2009

Trading Loss

I was wrong with yesterday's count.... dead wrong :(

When STI was at 2660, I bought into STI Call Warrant for a quick intra-day trade. How wrong I was... With 21 lots at 0.19 and 4 lots at 0.185, I sold all at 0.18 because I did not want to keep it overnight for fear of the unknown and time decay. Inclusive of brokerage, I incurred a loss of S$290, my first realised loss. Leverage is indeed a double edged sword; it aids you when you are on the right path, but it kills you faster than anything else when you stepped on the wrong path.

It seems to me that I have made the right choice to cut loss when STI was around 2655 as the closing was 2648. If I hadn't, my paper loss would have been an extra $250. Perhaps it was fortunate I stuck to my original target stop loss and timeframe. A lesson learned.

Guess I should stick to what I'm more used to at the moment: buying (and probably trading) of high yielding dividend counters.

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