First of all this week, an apology, followed by a confession.

The apology is for last week's glaring mistake on the chart of Dana Petroleum - if you had 'seen it earlier' as suggested on the chart, the trade of course would have been just above 600, not 500 as I wrote on the chart. I know the relevant arrow pointed to the right area but I'm sorry for the mistake nonetheless because of the confusion it might have caused.

And the confession? My excuse for what I'm about to tell you, is that it IS the silly season, after all - as I mentioned the other week - but I believe my spilling the beans on myself may prove helpful to some of you, so in the interests of our ongoing mutual trading education, here goes:
(Just a quick digression first - you can see I'm reluctant to tell you this wee story - I will NOT answer any questions about the name of the share/index involved, just to save you the bother of asking. The reason for not doing so, is because I have a new order working and if I tell you, you'll be tempted to do likewise, which could be interpreted as my giving you a 'trading tip').
Anyway, here goes: Over a few weeks, I had been watching a possible 'triangle' formation develop, and I decided mentally that if it 'did such and such' it would be worth placing a buy order to be filled at (let's say) 401. For various reasons connected with laziness, I didn't actually get round to placing the order, and then one evening I noticed the price had broken through 'my' price. "Oh drat" I said (or something to that effect) and I waited to see if there would be a retrace that might let me place a fresh order.
However, the price kept pushing up, and your marvellously clever trading teacher did what?
Yup, you've guessed it! Williams broke all his own rules and grabbed the trade at the market price!
Surely a clear case of utter stupidity? I reckon so, and guess what happened next?
Oh yes, I'm certain you guessed correctly. Worse, in fact, because it took less than a day for a full 4% stopout of a trading bank I had only increased the week before - I have a very expensive daughter's wedding coming up after all - so it's fortunate we have no neighbours within earshot. My wife had to cover the dog's ears, never mind her own. (I did mean 'very
expensive daughter' above, by the way - I didn't get the syntax wrong - the wedding too will be somewhat costly.)

Anyway, the point is this: it doesn't matter who you are, nor how long you might have been trading, nor how 'in control' you believe you might be, you WILL do things wrong from time to time and you should be prepared to accept that fact, get over it, and move on. The trade in question would still have stopped me out for a loss if I had taken it at the 'correct' price, but it would have been a smaller loss, and a 'perfect trade'. My annoyance at myself was not so much caused by the loss (which I thoroughly deserved) as by the fact I had broken my own trading rules - making the trade an 'imperfect' one.
The other point in telling you, is to say that if the trade had turned out a winner, it would STILL have been 'imperfect' and no credit to me. The danger therein, is that such a trade can teach bad habits by rewarding mistakes, and there lies yet another road to perdition.
I actually think we all need a 'reality check' from time to time - the main thing is to shrug it off and move on undeterred - but make sure we also learn from it!
Why did I chase the trade when I 'should know better'? That's very easy to answer - because I failed to order it beforehand even though I had decided where it would have been valid. It really is that simple - one error is almost always followed by another compounding error and next time I fail to place an order, I promise I'll give myself a strong reminder not to make
matters worse by jumping in at the market price. Nonetheless, I have already put the matter well behind me, and made the necessary apologies to the rest of the family!

One of my analyst friends forwarded me a nice wee quote that's rather appropriate:
"To live a creative life, we need to lose our fear of being wrong." (Joseph Chilton Pearce.)

Speaking of quotes, the one I totally misquoted last weekend actually goes as follows:
"Sitting still and wishing makes no person great. The good lord sends the fishing, but you must dig the bait." More than apposite to TTEW, for sure.

Moving on, it's interesting to see how the charts from last weekend have been developing - I have put up the Old Mutual one again today just to note a point of interest. Minerva in fact may be doing the same but not quite so 'exactly'.

The next chart today (Rolls Royce) was featured most recently in WICS of 31st July and it's here today just to show how proper use of the relevant dma can keep you in a trade without any need for you to get concerned about where to exit - on 31st July, I suggested that there would have been nothing wrong with taking the windfall, but that the alternative might have been to move the stop loss up to just below the top of the gap, to reflect the way the price had moved.

Today, you'll see that the dma has once more taken over as the 'manager' if you're still in the trade.

Then I have shown two charts of William Hill (last featured on 17th July) to demonstrate in a bit of detail, the placing and management of stop losses. You might also note on the second of these, how the most recent day's action has turned the price back up after a drop to very near the relevant dma - will this become 'rolling support'? Certainly if you look back along the longer term chart of this share, the 45 dma seems to have worked very well overall.

And finally, I mentioned Bovis Homes the other week, in the context of 'patience'. For the last few days, it has been finding some support around 600 and if you look back along its chart, you'll see that's a pretty significant price in the minds of many people. What will it do next, I wonder? It's worth noting perhaps, that the construction sector of late has simply cancelled over a third of its advertised staff vacancies. Anyway, what will be, will be, as always.

That's your lot till next weekend, when (thanks be!) August will almost be over, traders and analysts will be back at their desks, and things will begin to 'hot up'. And hot up they will, of that I am certain. (Or do I mean 'Hot down'??)

All the best,
Ian.

PS: it's getting close to 'last chance' for the one or two ntlworld and tesco.net sufferers still out there, if you are reading this: without a 'proper' email address, you won't be getting the new password I'm afraid. I know the non delivery of my messages is not your fault, but if you won't give me an alternate address to send stuff to, then that IS down to you, and I
simply won't waste time messing around with this kind of thing.

PPS: still a few workshop places left for 17th September. If you're interested, phone my publishers on 01709 820033. I'm really looking forward to meeting some more of you then.

'IMPORTANT NOTICE: These WICS charts are for EDUCATIONAL PURPOSES ONLY. They represent only MY understanding of what is happening in the market for any particular share, stock, commodity or index. In NO circumstances should they be construed as recommendations to trade. If I choose to trade what I see, that is MY decision. YOU must, in turn, come to YOUR OWN conclusions about what action, if any, YOU might choose to take'.