After I posted that STI had a bullish breakout, I waited for the pullback and go long on one of the STI counters at 1.12. I already had in mind a partial profit taking level at 1.16 should it reached there.
STI rallied and the counter hit 1.16. So, I sold half of my positions and take some profits. The very next day, price shoot up even higher and went as high as 1.205. But towards the closing there were selling pressure and a very long upper shadow shooting star candle had formed. By the way, a shooting star candlestick is a bearish reversal signal.
So I thought to myself, “The selling is coming in, I will just cover the rest of my position and take profits”, thus I sold the rest at 1.18 and was quite happy about it.
BUT… the next 2 days, the market continued to be extreme bullish and the counter went to 1.285 at closing!
I have a friend who is also vested in this same counter as me and we had a casual sms chat about our trades. He said he regretted selling a tad too early because price just “chiong” all the way up.
On the other hand, I realized that I did not have this “regret” feeling at all.
Yes, price went up a lot more and should I hold on to the position, I would have made more money. But I think that what I did was right and I stick to my plan. Who knows after the shooting star, the next day price gap down? Nobody knows what will happen to the market.
In a way, I feel I am now better at managing my emotion. No “regret”… I already have an entry price, stop loss and profit taking level in mind before I enter the trade. So, I am glad I followed my plan. If the price just continue to go up, so be it! There will always be an opportunity to trade again. Now I don’t chase the price. Trading also train me to be more patient to wait for the right opportunity to appear.
As cliché as it sounds, trading is indeed all about psychology and learning how to control your emotions. I can’t say I am very good at it now, but I think I am progressing and getting better in controlling my emotion when it comes to trading. 🙂