The Brains Trust, page-1525

We don't always need to talk about future runners PB. We also need to talk about past stocks and how we manage risk. That is our primary task........managing risk.

You remember that flat top break in CIA. A break of .50 c. The entry was the easy part, it usually is. It's the holding and the exit that is the hard part. Maximising gain versus minimising drawdown . It's always a battle. So how I handled CIA was like this.........

After the initial surge to .80c I sold around a third. By locking in some profits it makes it easier to hold the rest. I then reverted to the 14/7 ema's to hold the trade. (one of our old buddy gizards techniques). Holding the trade using the 14/7 got me to $1.45.

I still held the subsequent pullback to $1.35 when on the 17th, Feb, they announced their feasibility study.

The price didn't move up. So it was decision time. Stick to my TA and wait for confirmation of further gains or a stop using the ema's (death) crossing, or exit on the news. What to do?

Well, the decision was easy, as seeing as it was a huge gain in a few days I sold. I did not use TA to exit. I exited on the fact the price failed to move on news. This told me news was 'baked in' the price.

I just noticed now that the 14/7 have just crosssed today, so I suppose i could have got out today with a good gain.....but less than I did.


Anyway, as no-one, but no-one discusses trade management around here, once they are in a trade, I thought it might be useful. It was an unique trade, and having the right tools to manage it is a must.

Does the fact I concentrate on risk management make me a contrarian ? Isn't that what you need to be succesful in trading?..............a contrarian approach!


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