I’ve held CHW for a couple of weeks now and it’s had a high of £150 paper profit for me. Today the price dropped a few points and reduced my paper profit to £90. I decided to ‘double down’ at this point after reading p.165 chapter VII of ‘Reminiscences of a Stock Operator‘ last night. In the chapter, Jesse Livermore suggests somwthing he describes as ‘pyramiding’. The gist seemed to be that when you are in a positive swing in your direction, buy more, “stocks are never too high for you to begin buying or too low to begin selling”…
Taking this a little too much to heart, my position in CHW was up £90 on paper, so I decided to buy more.
Later in the evening, I spotted what looked like a bit of a rally in Spot Gold as the price rose to just a point past previous resistance. I felt the urge to trade SHORT here but didn’t have enough margin on account.
I decided to take my profits on the initial CHW position of £110.50 to give me margin room for quick gold short with a VERY tight stop loss. After placing the trade @ 1622 £20 p/p I realised I was trading against the general trend. I think I might have been too eager here.
Opened Positions
Spread Bet Longs:
- CHW : 197.49 @ £10 p/p with 10pt STOP LOSS
Spread Bet Shorts:
- Spot Gold : 1622.2 @ £20 p/point with STOP LOSS at 1625
Closed Positions
- CHW : Opened at 185.46, closed at 196.51 @ £10 p/point = £110.00
Profit/Loss for Day
+£110.00