WealthEsteem.org Psychology of the Deal – Page 35 – Wealth is created between your ears

Buy 1940 NCP @ 15.26

My strategy is to buy at 2.5% off the previous peak close which was 15.66 on 7 January. After that trade the market fell to 15.15 and bounced there for a while. I was preparing a top up order at 15.17 when my team leader came by for a chat. By the time the chat was over the market was back to 15.25. Missed opportunity.

The ride has been chaotic over the last few days. But the profits are good.

By way of clarification I pay $31.90 per transaction through Quick.Broker on a $25,000 parcel it represents less than $0.04 per share (counting buy and sell commissions).

Sell 1940 NCP @ 15.45

After yesterday’s emotional roller coaster it is time to exit and make a considered re-entry. The market opens at 15.55 but it is down to 15.40 before I can get near an internet connection to sell. I place a sell order at 15.45 and go do some work. During that time the market recovers to 15.50 before it settles back to 15.40.

I’ll do some hard thinking but I will probably buy back at anything below 15.40 tomorrow.

Buy 1940 NCP @ 15.35

Decided to try a day trade after the NCP market opened aggressively down to 15.27 then moved up smartly to 15.38. Placed a buy order in for 1700 at 15.33 and amended it up for price and quantity.

An hour later it’s down to 15.31 and looked bad. But it picked up and spent most of the afternoon at around 15.39 (breakeven).

Suddenly at 2:45 it moved fast to peak at 15.48 then falling straight back to 15.39. Then it did it again! Why didn’t I place a sell in at 15.45?

I’ve noticed NCP trades in a 0.20 range. Lesson #1 if I buy at 0.10 above the low then I should sell at 0.20 above the low for day trades.

Lesson #2 keep a clear exit strategy when I buy.

Sell 1700 NCP @ 15.48

What a day! I went for a late lunch at 2:00pm happy that NCP was happily above 15.70. I came back at 3:30pm to discover it at 15.48 (choke!). Nearly 2% off high is a clear sell to me. I am beating myself up for not taking 3% at 15.74. But that’s why I’m keeping this diary.

NCP Market Commentary 2002-01-07

Hooboy! NCP opened at 15.50 and hit a high of 15.70, just short of my 3% target. So do I dare hold until it has a down day? Talking to some traders hanging around #ipchat, I’ll hold until it closes down. Hope I’m not being too greedy, small gains saw me make 35% ROI over the last 100 days of 2001.

Buy 1700 NCP @ 15.28

Why? 2.5% fall from previous peak close of 15.675 on 28 Dec 01.
The stock went up then down to close at 15.209. Last trade was 15.22. I feel pretty foolish but I don’t try to pick tops or bottoms. There are three potential exit strategies: sell for +2.5% (15.66); or +3% (15.74); or sell after it closes down. Successful traders pick one.

Psychology of the Deal

Welcome to WealthEsteem — dedicated to the Psychology of the Deal.

What does WealthEsteem mean to you?

These are my musings on wealth creation, written during the quest for my second fortune. If my ideas work, great! See you in Monaco sipping Cosmopolitans. If they don’t, it’s a map of my folly. Hoist a cool drink to my memory and imbibe responsibly.

For the record, I made my first fortune by the time I was 26 and lost it and more by the time I was 27. The details should emerge in the Diary as time goes on.

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