Last year, I read a great book called "Teach us to still", written by Tim Parks. He's an English novelist who has lived in Italy for most of his adult life and the book charts his attempts to solve a painful prostate problem – not an obviously attractive starting point! – leading him to try meditation. He has rejected anything that smacks of religion in his life so it's a difficult path for him.
I found the book to be very inspiring and beautifully written. He has previously been shortlisted for the Booker prize so its not new age pap and yet it explains the process of meditation much more clearly than anything else I've read. Despite that clear explanation, I've spent about 9 months attempting to meditate while being too stubborn to learn the basics. However, after making very slow progress I'm finally giving up trying to control the process and the result has been a very promising weekend.
One thing that has become clear to me is that my mind is unusually erratic. I'm reasonably bright but a lateral thinker with concentration issues. Along with the fear of losing control, it's no wonder that meditation has been difficult.
That erratic approach helps to explain the impetuousity that bedevils my trading and is one of the reasons why I favour a technical approach. As the previous post shows, I can make something as straightforward as technical trading become quite convoluted. Don't get me wrong, I like the way my mind works but it's like a flighty horse than needs blinkers to run straight.
One set of blinkers that I'm applying is to try to find the very best trade I can each day rather than putting on a couple of good ones and a bunch of average ones. I'm more than happy to put on 3 or 4 trades on any particular day because the decent overnight ones tend to come along in bunches at market turning points; what I'm referring to here is the trades where I want to be in and out quickly.
Today's trade is a long position in Lynas. The stock has been under pressure with the broad market weakness and also due to uncertainty surrounding the approval process for its Malaysian processing plant. The approval has been delayed pending some safety hurdles that the company must pass. The result is better than some brokers feared and after a sell off on Friday, LYC has recovered today. I bought stock this morning at 182 based on the 30 minute chart. The opening bar had reversed Friday's late sell off and also pushed above the tight intraday range from Friday. It seemed to me that the stock had the capacity to squeeze shorts out and attract new buyers on the basis of a new low that has been rejected. So far it has worked. I bought 30k at 182 and an additional 10k at 184 which I tipped out at 187. The intraday chart still looks strong and I'm willing to hold overnight as the US July 4th holiday means that large negative moves are unlikely in the broad market.
The 30 minute chart is below.
The daily chart just shows a choppy mess really, weakness but no strong downtrend. The point I'm taking is that the new low has been rejected – for now – and that the low was better than the March trough.
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