9:00 - 9:30 AM.....

It is always a rush when trading starts at 9:00AM every morning. This is especially so with mega events such as DJIA free fall the night before. This morning is not an exception.

I have bought some share of a company ( I name it "a") the day before judging from a perceived pattern formation just before its closing. I was bullish with the stock as I felt that the STI plunge might already be at an end. But it is unfortunate that the DJIA was in such a bad shape during the night and it resulted in a panic situation when trading started in Singapore this morning (18th May 2006).

first thing I saw on my screen was flashes all over the place, with the pricing all entering the red zone, well, except for one or two that hold their grounds. All the prices including my stock "a" went all the way down by 5% or more. The plunge of "a" went too far from my stop loss level and even I have trouble holding on myself. I even panic further when the trading traffic was so great that the network broke down and I was not able to re-connect to the trading site. I believe at that point of time, the IT room at my broker's place may even have the smell of burning rubber.

It was a scary experience. Eventhough I have experience this before, I still could not get over the panicking sensation. I only have one thing in my mind, "the trading period from 9:00-9:30AM is for the AMATURES!" MY experience told me that there is most likely a pull back after the 1/2 of trade. "a" will reach back to a higher level when the trading stabilize again after that. Sure enough,the price of "a" rised back to a more humane level by 10 and further stabilized by 11.

Again, the same question came into my mind, should I activate my stop loss? Afterall I have set my exit strategy and I need to follow through. With the prices stabilize and volume continue to build in my favour, I waited until 2pm when I find a concrete block sell. I exited the trade with a loss of SGD360.

It is a painful lesson for me. I should never make my decision during trading hours. Some how, I would have to accept the responsibility of being greedy. However, another lesson that continue to re-inforce in my belief system. That is never ever trade between 9:00 to 9:30AM, you will never get a good feel of the market.