Delay

Arbu

Active member
239 8
I shorted Barclays shares on 16th August because:

(a) I felt that there was scope for some news to come out about law suits being brought over the LIBOR scandal;
(b) I felt that there would be some profit-taking by people who had bought shares in July when the scandal was most in the news; and
(c) I felt that shares generally were experiencing a bit of a summer/Olympics boost which would fade away now the Olympics were over.

The share price went up quite a bit before falling and is now back to where it was when I placed the trade. I think (c) has happened somewhat and I'm still happy with the trade. But of course I would have done better to have delayed it by a week or so.

Anyway the purpose of my post is to reflect on the merits of delaying trades once you've had the idea. There's a temptation to want to place the trade as soon as you've had the idea so that you can get on with other things, but that temptation is not a good one, and I think it needs to be resisted. It's not based on anything to do with the market. I suppose it would even be possible for an individual to have a habit of placing trades before the market started thinking on the same lines as him, if he was quite a deep thinker. Anyone have any experiences or input on this? If so, do you set yourself a reminder to reconsider the trade in a few days?
 

NVP

Legendary member
37,586 2,009
so what you are saying is you may feel that an Instruments price is over/under valued .....

but its important to also wait for a catalyst event so that the price starts to move the way you believe and others start to share that view !

thats what a lot of smart traders do......the "catalyst event" was quoted by someone in market wizards I seem to remember ......

N
 

Arbu

Active member
239 8
Well, yes, I think there's some merit in holding off for a "catalyst" event. But you may not be around to place your trade if and when one does happen. And I'm not sure that there has been such an event with my Barclays trade.

I'm saying more that you have a lot of variables you can make use of in deciding what trades to place. You need to use them all to gain an edge. Don't forget that the time when you place your trade is a variable too.
 

Arbu

Active member
239 8
hmm.... seems like you want to get in before the herd does

At the same time as the first few of the herd. But not a week before any of the herd gets in.
 
 
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