Thursday, August 29, 2013

India in reverse

And India is in full blown reverse mode today. I havn't checked Indonesia but can only guess. The predictability of the megaphone pattern is strong. It's a high likelyhood that the bottom is in but not garanteed. Further spikes can come and then I will allocate more money to this trade. I'm currently only about 24% of portfolio commited. It is hard to know at what point the BOT exactly is turning, and I want to keep adding money to the trade on the way so that a big portion of the money in the trade is near the turning point. Unfurtunaltely I didn't feel I did that good enough on this trade. More money could have been placed near the turning point. This is the only big trade I'm involved in at the moment so I could have allocated more than 24% at this point. I have the opportunity to go to leverage if needed so even 100% portfolio allocation would have been ok, especially considering I used only non leveraged ETFs for this trade. I have to start out smaller and increase the size of the bet for each day the trade is building. No day should have betting that is smaller than the day before if the BOT is continuing to build. I should evaluate probabilities of high high the BOT can go to see how many days I could at maximum endure before all my capital is used. The big misstake was probably yesterday when I could really smell a turning point but still didn't bet aggressivly but just added marginally to the existing position. This will be a profitable trade but the point is to maximize profit/risk taking in each trade.

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