I exited my long cocoa trade after lunch. The market gave me the opportunity to exit with a profit of 1x capital at risk, and I took it. When I entered, I had good reason to think that the market would not return to the level of my stop, because of the news about adverse weather in Ivory Coast. However, I do not have a good reason for thinking that cocoa is entering a sustained bull market. I am not a cocoa analyst and I do not know much about it.

I went into the market because I saw a rare moment of predictability, with the market very low, risk significantly to the upside, and a chance to get a stop at levels last touched before the newsflow suddenly changed. That was a reason to trade, but without a deeper fundamental view, it is not a reason to hold beyond my minimum profit target. I considered how I would feel if the market rallied and I missed it, and thought I would feel OK. I also considered how I would feel if the market returned to my stop and I took a loss, and thought I would have felt bad. So I took profits.

The market has dropped quite sharply this afternoon, and I am glad to be out.

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