It’s been an interesting week and perfectly illustrates the following point.
Things began very well as I’d correctly entered long on Forth Ports and Whitbread while also shorting Serco… I was slightly unimpressed with the spread quoted by MF Global, especially on Whitbread but was prepared to let it slide as things initially went my way.
By the end of Tuesday I was in positive territory with 2 of the 3 but here begins my tale of woe 😉
What I now realise was there was a faulty decision making process going on. I was looking at the three trades as a group. In other words I was feeling that they should ALL be in positive territory before closing any of them. I failed to close my positions and subsequently these have all dropped back.
The key message from this is to look at each position individually NOT as a collective. They are not really linked but putting them together mentally means you can’t make objective decisions to close a position or keep it open. Your overall P&L is not your friend!