Donald,
Re: Now my question is would one have sold or held? Maybe a discussion on this may make others better on their exit skills.
You've hit the nail on the head as far as your observation about the difficulty of closing losing trades. EVERYBODY knows that this is essential for success, but the psychological pressure works against us so strongly in this regard that only a few can do it consistently.
I think you have the right approach. You've got to look at it from the technicals and avoid thinking in terms of how much you are currently losing. This shift in attitude can make all the difference. The time to consider what you might lose is before you enter the trade, and if the possible percentage loss is high given the broken support points that would trigger your sell, then it's necessary to adjust the amount of your trade, or pass all together.
My take on the dynamics of this particular case is that technology is performing remarkably well in light of last night's Asia news, and the DOW is not down as much as I would think given the same news. If your support holds, why sell? Unless of course you get a sell signal from your guitar, but from what I understand your system doesn't work that way. (Needs to be overbought before triggering a sell, I think.)
I see as I'm ready to post this that the jury is still out on this afternoon's direction. We've got an intraday triangle well developed, just have to wait and see.
You're right, exiting in a timely fashion is the key, but the quick exit is not always the right one. I hope there's more discussion about this from you and others.
Esteban |
