Wednesday, October 29, 2008

Another quick morning update, it seems thats all i can be doing these days. Some interesting thing the index and energy markets. Since October 20 I've been short ICE brent and Gasoil. I've experienced about 3 whipsaws on the ICE brent though nothing major. I just want to mention that the recent whipsaw from the second OPEC meeting is superficial reasoning as to why this whipsaw occurred. It may seem like a fundamentalist excuse as to trying to explain the occurrence. I would attribute it to more of short sellers covering gains, or the recent jump in equity markets. I consider the equity argument to be more valid since that is what the majority of the world is watching now (whether it be central banks or opec). Financial market performance is leading many decisions on a policy basis. Though overall trend in my opinion is still down, though if the US Fed decision to cut rates actually does maintain any stability in the equity markets (which I highly dought), perhaps crude will trend side ways a bit before deciding a new direction.

I still maintained my short, As I am still participating in the BP trading challenge, had I not been, I would have considered increasing my position a bit. Though, since i could not afford in depth analysis, the risks out-wayed the returned as if I leveraged more capital, any small movements in teh wrong way would have knocked me way down in the ladder. Throughout the week Ive fluctuated from rank 15 - 20 out of 200 people or so. Luckily I've been able to maintain such a high rank on two short contracts only. I am surprised I was able to maintain such a tax effective discipline, though since I took such a conservative role, I did sacrifice some possible huge gains as there were at last 3 whipsaws that took large portions of my gains.

Last night before going to bed I lost quite a bit on my equity position, I was at highs of gains of 20,000 pounds, though at the time I was somewhere around 10 - 15,000 of gains from my SP500 futures contract. Luckily I had a nice stop, though I wouldn't say it was exceedingly tight but certainly prevented losses. I still made a decent profit of 5,000 pounds from a short position from oct 22 or so. Though, last night I was not convinced the trend was over, and re opened a short position which is still positively gaining now. Though i will have to watch the trend through out the day as it maybe just attributed to bulls taking short term gains.

Overall though, this has been good practice in trading longer term charts for me, as my prior experience in forex only allowed me to trade in short-term charts in a undisciplined fashion.

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