This week’s great lesson turn out to be my Olam trade. I entered this trade looking for an upside target of 2.97. It would seem an achievable target as my entry point at 2.69 is near where the trend lines congregate. MACD looks to be putting in a nice cross for some short term uptrend.
True enough, it ended positive for a while until it met some heavy resistance form from the October highs at 2.82. My decision then was to sit tight and observe if it will take out that resistance and reach my target of 2.97. Well it never did. The resistance proved strong and it turn back till my cut loss yesterday.
My stops are tight for this one and perhaps the regret is that i should have taken some of the profit off at 2.82 (half of it or a thrid of it) but really, my sizing for my Olam trade is pretty small at 8k so there isn’t much profit to take off.
Had i played this again, I would have done the same thing. This stock could whipsaw quite alot that had i got out once it hits resistance and turn, it could still go up and breach the resistance to hit my eventual target. To me its a bad trade.
Right when it reached 2.82, alot of folks were happy for me for making some right decision on this and Ezra. I remember my comment was quite clearly:”Wait till i sold off at a profit then congratulate me” Turns out i just cursed myself there with that statement.
Interestingly BigFatPurse got in the same trade and did the same thing as I. We can now weep together lol.