Monthly Archives: May 2016

Oil up, Glencore at the bottom of the range – and why it’s important to stick to your plan

Hi, been a while – that messy, unplanned thing called life has been getting in the way a bit recently. Still, my long on Oil (Brent Crude) that I reported last time I posted at 41.26 has worked out rather well – now trading at 48.81. Unfortunately I only placed £1 per point so it is £755 up currently but feels a bit like a miss. However, that’s an interesting psychological point – the fear of missing out – that causes many traders to lose money.

I was reading Robbie Burns’ The Naked Trader’s Guide to Spread Betting – a fairly basic manual which is worth re-reading from time to time – just to remind you not to get too caught up with technical analysis and to pay attention to the pressures that make (apparently) 90% of spread betters lose money. One that resonates with me the most is setting your stops too tight and taking too much of a short term view. Hence whilst I’m cheesed off I only bet £1 a point on the Oil price, I have at least let the bet run to give it time to make a reasonable amount. It’s all about sticking to the plan to take the emotion out of it. So now I’m going to also stick with my prediction on my last post that the Oil price will trade in a 35-50 range for this year – so not much more upside if I’m right – and get out whilst I’m ahead.

Which brings me to Glencore. I posted on ADVFN recently that 165-170 (which was where it subsequently traded within a week) was the top of the short term range in my view – that I believe this is a £2 share but that we would see 130p before we saw £2. Well I was spot on with Glencore trading at 132p as I write this. Good call! But….did I take my own advice and sell when it hit 170p? No of course I didn’t! By then I’d convinced myself that it was in fact, going to £2. So I’m now about £10k worse off than I would have been if I’d listened to myself. So next time Glencore hits 170p I’m going to sell at least half of my holding – promise.