Tuesday, January 18, 2011

The issue of selection...

Had I been trading today with a $1,000 cash account as I plan to start with soon. Then I would have been fully invested by the end of the day in the set ups that triggered today (GSL, PAM, GGAL and AUGT) with 25% in each. Now here is the issue that I have been raising all along.

On my watch list for tomorrow; there are set ups that I find very attractive like UTA for instance and that I would have liked to take should they trigger. However, as I would have been fully invested then it would not have been possible to do so. So then one is faced with an interesting dilemma. Should one ignore the new set ups all together or attempt to cherry pick. For instance, if I see UTA triggering tomorrow but that GGAL down on the morning, should I exit GGAL and buy UTA? Suppose GGAL recovers and UTA collapses? Or suppose I take UTA but AMRS exploded with out me?

I guess what I need to do is to find a way to narrow down my watch list and even further to assign a rating to the set ups. So that if I am long a C rated set up and an A rated set ups arises then exit the C set up in favor of the A.

This is one of the dilemmas that traders face on a daily basis.

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