Assuming Full Responsibility

by Olivier on May 7, 2009

Today I lightened up. No need to go crazy with position sizes. The markets could continue to got up but a sharp correction can happen anytime now. Monitor your portfolio and no matter what kind of positions you have constantly adjust to new situations. It’s very simple. Look at the performance of each single stock in your portfolio. Scale out of losing positions and add to winning positions. I did this today with CAEI – China Architectural Engineering. I don’t know if the stock is going to go down even more or not. But I sure didn’t like the action after my entry. The more the stock retreated the more I sold. I do this in order to avoid huge losses. Make sure not a single position in your portfolio can hurt you if things go wrong. And things do go wrong. That’s part of the business. Constantly making decisions and assuming full responsibility for each decision’s outcome is what traders have to deal with every day.

In the long run you need to get into the habit of cutting losses early. That will ensure you are positioned in winning stocks and that you are going with the flow and not fighting the market.

Here are a few thoughts on positions I hold and a few additional trade ideas:

  • BXI.V – Bio Extraction – Excellent technical action. The private placement will close soon. Odds are high the stock will be able to move up afterwards.
  • AEN.TO – Antrim Energy – After yesterday’s huge move the stock is consolidating in an orderly way. I see lots of other energy related stocks popping up on huge volume so from a technical standpoint my assumption is this should the beginning of an up move and not the end.
  • CAEI – China Architectural Engineering – The stock didn’t even come close to its MA 200 so it might still go up. A close below 1.50 would be a reason to exit.
  • UXG – US Gold – This was one of the few doing well today. We have a small volume spike but we need follow through otherwise it will be meaningless.
  • WTM.TO – West Timmins Mining – Not much to say. The waiting game continues. We will soon know if results are good. Odds are they will. Volume is telling the story.
  • QEC.TO – Questerre Energy – I’d like to see more volume and a big white bullish candle. That would be the signal the trend has changed. JNX – Junex which is right next door to QUE.TO was up 20% today. Natural gas probably has seen its lows.
  • RGLD – Royal Gold – So far so good. But we need more separation from the MA 200.
  • DXO – Powershares DB Crude Oil Double Long – I went in early. We will soon see if this was a false breakout or if oil can start moving higher. Judging from the stocks I see popping up in my scans energy related stuff is doing quite well.
  • Uranium – I am waiting for a pullback. So no hurry. UEX.TO is the one I am watching. You can find other stocks in the sector overview chart on my public list.
  • PCX – Patriot Coal – The stock started its pullback down from the 10$ level which is a significant round number. Now I watch if a decent flag on decreasing volume is built.

Your job as a trader is to manage risk and assume full responsibility.
No excuses.

Have a great evening!

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