Tuesday, November 24, 2009

Lesson learned from Ying Li's loss

Loss, but I'm happy. The reason being, I learned a valuable lesson in trading.

Sell on emotions ==> the worst mistake a trader can make. I bought near the lows at 0.63, I sold at the low at 0.62, to see it rise to 0.66 in 2 days.

Lesson learned: because I used the daily charts, I should wait for a few days, not just 2 days, before cutting losses. For such short time frame as I have done, I should see the hourly charts in the future, and not the daily charts. My set up was there, but my time frame was wrong.

My reason for purchase was because... Ying Li was at the support of the down channel. The CCI and %R sold severe oversold, and a rebound is due soon. Indeed, it rose today.

Trading is not as easy as seeing indicators and buying or shorting because of indicators. It's also about money management and emotional control... something which cannot be easily learned from books.... I have much to learn :)

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