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?
(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?
