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I had 4 losers in a row in the morning last Friday   However, the subsequent 2 decent short trades recovered all the losses and left me some more to enjoy over the weekend.

First short was WLT.   The basic materials sector was the weakest. I normally have a few pet stocks in each sector and WLT was in that sector.   “Short the weakest and long the strongest” is one of the trading rules I always observe. One picture is worth 1000 words.

Here is the 5 min chart and the trade I took.  Click on the images to have a better view.

The second short was RAH, which was downgraded by Credit Suisse.  Regardless how good these analysts are, their downgrades and upgrades can swing the market in the short term.  So if you are a short term trader like me, do not fight them.

After years of full time trading and thousands of trades, I still suffer from the powerful impact of a trader’s psychology.  I believe my mental strength is already strong.  For example, I took the short trade in WLT even aftter 4 losers in a row in the morning.  But I have to admit that I hesitated, which is reflected by my tiny position in it.