Thursday, May 14, 2009

Action 20090511: Short FKLI May 2009 Contract At 1015

(I am recording my trading. The followings are my trading actions and records. As good traders, we should keep a good records of all the details like points of entries, reasons of the actioin;long and short, stop loss levels, profits and loss and commands etc. )
Date: 11 May 2009 (Open Trade)
Action: Short Future Index May 2009 Contract
Shorted Price: 1015 (at the close)
Volume: 1 contract
Initial Stop loss: 1042 ( 4 points above the 1038 High on 7 May 2009)
Reason To Short:
1) Daily Stochastic is now down
2) It closed below the low of 1018 registered on 8 May 2009
3) KLCI opened high closed low with larger volume (please refer to chart)
Comment: I am not totally convinced with the short as the market is still very bullish. Many counters still broke their high even today. The future index price still closed higher than the moving average high (in green line). So I decided to trade one contract only.

Date: 13 May 2009 (Close Trade)
Action: Long to close position
Price: 1025
Reason Long To Close Position:
1) Broke The Resistant of 1024 based on 30 minute chart
2) Price hold well above the moving average high (in green line) in daily chart (refer to daily chart)
3) The price initially broke the low of yesterday but rebounded strongly
4) Many active stocks went up strong in the afternoon section
5) The overall trend is still very bullish. There is no reason for me to risk further.
6) The overall volume is still big; 2.205 billion

I was right at the time of the decision for shorting as markets seemed overbought and started to weaken. But the markets rebounded strongly worldwide this afternoon actually. Anywhere, the price still can go either way, but there is no reason for me to risk. Further more, I have 6 reasons to close the position. What can I say?
I lost 3 trading consecutively and I am ok with that. I consider them as small loses.

1. One points of FKLI (KLSE Future Index) = RM50
2. Commission needed for buy and sell is RM50 so we need 1 point to break even
2. Margin (Minimum Deposit for holding overnight) = RM3000
3. I have R 32,800 as deposit and now RM 32,250 after the loss of RM550

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