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Sunday, September 24, 2006

Trading with no discipline

A few days ago, I posted an article on developing a trading system just to remind myself of the lessons taught in there.

I did a Bull Put Spread on some oil drillers a week ago and price of crude oil wasn't doing great during those past few weeks as it dropped almost close to $60 per barrel and this directly affected many oil drillers stock. Eg -I did a Oct 65/70 bull put spread on ticker symbol DRQ and the stock price fall thru to $63 and I did nothing to save this trade which is losing at the moment and I hope that the stock price would recover.

The lesson here is that I did not have the discipline enough to follow thru my pre-determine exit like the above trade by buying back the $70 sold leg and hope that price of the stock would recover and this is in fact a mistake to be learnt as a trading system once adopted is to be follow through strictly.

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