Infostream, It's hard to get much in the way of clarity from the CSCO monthly log chart, but the weekly chart is definitely unpleasant. The MACD line has made a series of lower lows, both major and minor, and it's approaching an up trend line--a break of that line would be my signal to take profits. The daily chart is troublesome as well, with the MACD again making lower lows. But price continues to ride above the 150-day SMA, which remains upward sloping, so my guess is it could make another run to 70, at which point I'll re-evaluate.
I enjoyed your description of the FX traders. Yes, some people's gut trading instincts are as good as gold.
"Another one [of] his troop refused to discuss the Euro, but he felt in his "urine" that the Euro my hit 0.90cts (which it did some weeks after), and prevented me from hedging my dollar position." --What struck me about this was not that he had a gut feeling, nor that it turned out to be right, but that he refused to discuss it. I think I may know why, but what do you think was his reason?
Tell me if you disagree, but I think a gut feeling is not the same thing as an emotion. You could have a gut feeling that a stock is going up, but still panic if the stock gaps down in the morning (and vice versa). Does that make sense?
One of my 'rules' runs like this: "Never trade on news. If you must trade on news, never trade in the presumed direction of news--trade against it, and take quick profits." For 'news' I include: press releases, insider trading alerts, earnings reports, acquisitions, upgrades/downgrades, etc. It's my opinion that news of this sort evokes an emotional response.
Which brings me back to my original question: "Do you think trading decisions (long or short) are helped or hindered by one's emotions?"
Sorry to get back to you so late. I've been tied up helping some friends move.
Regards,
DWCraig |
