Trading journal 13/Mar/2013

• Found the correlation between weakness of yen and nikkei, I believe the causality goes from the FX to the Equity. Based on the FX moving down again, long Nikkei is the choice for me.
• Need to look into this further to understand whether the easing news or the FX movement are a key determinant
• This can be either a short-term or long-term trade, given yen is expected to fall even further
• Seems like I was right about the relationship but wrong about yen falling, therefore nikkei falls accordingly. Do more research before putting on a position
• A reflection: cannot be faster than the market, almost have to be a contrarian to beat the market
• In investing, cannot put stop-loss too close the initial position
• Profitable FTSE100 trade: market is overshooting, there are four consecutive mins that the index rebounds, catch a 10 points rally. So the combination of market view and technical analysis ( a little bit) works in the short-term. Cannot believe technicals in the long-term, still can't.
• Successes of short-term trading: a) in anticipation of a data surprise; b) take contrarian positions when market overshoots, especially when market overreacts on news and data release; c)market doesn't absorb information enough when the fundamentals really support a directional move
• Having said all that, although this is still short-term trading, basic market conditions need to be taken account of. For instance, in a bull market, in the case b) scenario, market's falling is more likely to be an opportunity.
• Profitable EURGBP trade: apply principle b), however, I don't have a set of rules to get out of a position
• Need to think about medium-term trades as well
• Sales and IP data are very important