RE: SIMSCI 09-June-2006:Potential short: Lost trade

SIMSCI futures

Before SG market went for lunch break, I have decided to close my SIMSCI short position with a loss at 275.7 even though planned trailing stop was at 276.2. There were signals that contributed to this exit decision. From 9-min chart of SIMSCI, a positive divergence was observed, and it was , in fact, getting stronger. I was very uncomfortable to see positive divergence when having a open short position.

Nikkei225 Futures

Another strong reason to exit short position was from Nikkei225 Futures. Again, a positive divergence was observed. That was a scary scene. It was preparing to run up. In the event that intraday upward movement started, SIMSCI futures is likely to have a gap up in the afternoon session. I might be missing out potential profit, but, safety in the market is my objective. Fast decision made. One lost trade with -0.6 loss. After trade analysis:

SIMSCI Futures

In fact, my short position was not supposed to be established. This can be proven when doing analysis retrospectively. Before Short position was established, from 9 min chart, a positive divergence was formed. This is a sign of strength, and no short position should be established.