I didn't miss a boat. I missed a freakin rocket!

The purpose of this post is not to bang my head over this wonder. There are always other opportunities in the market. The purpose of this post is to remind myself that:

  1. my analysis can be so right, sometimes; but more importantly
  2. my entries and exits timing are still terrible

I can't use the same techniques I use totrade forex and large caps in these junior miners. I'm used to riding waves on a boat. I need to adapt and figure out ways to ride rockets (a friendly reminder that most rockets will fail to launch), as Uberlu suggested in a comment. Here's what happened. I lamented about my missed opportunity in establishing a position in Ventana Gold (VEN.TO) last week. VEN.TO is a company in which I've been very bullish and took numerous dabs at for months. This is the picture of VEN.TO last Monday. It already propelled to \$11. [caption id="" align="aligncenter" width="570" caption="Ventana Gold (VEN.TO) on November 8"][][][/caption] Now this is VEN.TO today. [caption id="" align="aligncenter" width="570" caption="Ventana Gold (VEN.TO)"][]1[/caption] VEN.TO closed at \$10.03 on Tuesday. It opened at 13.61 on Wednesday on news of a takeover bid.

4 errors and lessons from being long just before the October 2008 crash

[![S&P 500 review][]][] : S&P 500 review

I have been waiting to go long in this bear market for a few weeks now, hoping for a bottom soon (first of my errors).  Then on week of September 29th, I decided to go all in (error #2).  S&P closed at 1099 that Friday.  A week later, on October 10th, the Friday close of S&P 500 was 899 points, and I am still left holding on (error #3).

Error #4 though, requires some explaination.  Simply put, I was not reading the chart as I should have.  While both the price action and contrarian sentiments were bullish, I totally missed out on a basic technical analysis indicator â€â€Â? the volume.  Looking at the above chart, it’s easy to see that the first downward break of the trendline in mid-September was confirmed with volume.  The volume on that day (left blue arrow), and for that entire week, is substantially higher than usual.  The subsequent mini rally attempt before the next break has been marked with little volume.  This suggests that market participants, particularly the longs, still haven’t flocked in yet.

Seeing that, I [should at least reduce my position size by exiting some of my most weak positions][] (i.e. least profitable positions) before the weekend.

While this is not my costliest lesson in trading, it illustrates some very fundamental lessons which I should reiterate, because I should have known better.

  1. Never try to pick the top or bottom.  Which I thought I learned from my futures trading already.
  2. Manage risk according to volatility.
  3. Exit at any cost if it doesn’t look right in a bear market.
  4. Don’t get fixated on the individual stocks, look at the bigger picture.

Actually, I think this all boils down to proper risk management.

[S&P 500 review]: http://traderpau.files.wordpress.com/2008/10/week_spx.jpg [should at least reduce my position size by exiting some of my most weak positions]: http://www.quantisan.com/didnt-cut-losses-as-planned-and-now-paying-dearly/