Avoiding Pain

 I seem to have side stepped one potential landmine. The SGX Nifty is currently trading at 5316 which is around the same levels at which Nifty closed on Friday. My long positions in the Nifty are therefore unlikely to be hit by a gap down landmine.

The world is teetering on the edge and the push that finally nudges it over can come from any direction. The most obvious is if the Italian Premier loses his vote today and the country heads for an election instead of a united government. It could also come from the Iranian front with the IAEA saying that they are closer to a nuclear weapons program than initially thought. It could come even from some totally unexpected front like a particularly large magnetic storm from our Sun that disrupts power and communication systems.

Given all these potentially large negatives, it is difficult to have a long position, specially overnight. I wish I could say that this is where my years of training and mental conditioning come in handy. However, what really helps is that I do not know of another way of doing things. If I do not take a long position that my system requires me to take, then I will be completely at sea if the market actually moves up. For me, the pain of not participating in a trade that is right is far more than the fear of going wrong in a trade. This need to avoid the pain is what helps me stick to my system.                        

So here I am, long on the Nifty and waiting for it to make its move up. It does not seem to be in a mood to oblige though. I therefore continue with my long positions, pray to who ever is up there and put an order to cut my long positions and go short below 5220.