Monday, March 14, 2011

Second week of March Performance (March 07 - March 11)

Last week I stayed out of trading for the first half. I didn't like what I was seeing in terms of action so I opted this week considering Crude didn't seem to be a clean trade for a third run up. Instead I decided to paper trade an idea.

The trade Idea:

Long @ 104.7 (averaged) March 9

1. Supply disruption continuation
2. OPEC would hold out on making up the Libyan deficit
3. Consolidation to break out to the up-side like the past two moves up from February
4. We would see a retest of 107 Monday highs.

Essentially Brent would maintain its highs above 113 and consolidate as WTI would play catch up and narrow the spread.


End week
-420 cents

Proper risk management wasn't employed since this was on paper, I was being sloppy. A theoretical stop should have been placed @ 102.5, the previous break out resistance. However there is no point in back trading this. This was a poorly managed sloppy trade overall.

My thesis was completely wrong as OPEC(supply) > geo/political risk... Both Brent and WTI fell drastically.

As mentioned above this would have been improved on proper risk management. Or active management on closing out on the Saudi Unrest spike (unfortunately I slept through this).

In the end after seeing my sloppy move I decided to play this out longer term as I expect a re-test to the 104 level again. In regards to my Trading Guideline, on a real trade, this would Never be done since it breaks a rule of changing the strategy in th middle of the trade. Closing out and re-entering under new analysis would be required.

Despite the guideline I will treat the continuation as a new trade for this week (Entry on open assuming pre-market order @ 100.56 22:00 GMT). Again I am finishing up Administration duties before getting back fully into the game. I expect by the end of this month I can stop posting paper trades and start the real books soon.


Alexander LĂȘ
Managing Partner
Analyze Capita LLC

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