Hedging Long Position

Happy and Healthy Lunar New Year to all.  After taking a festive break, I am resuming my blogging, although I have not been feeling too good lately.  Must have eaten too much junk food and drank too little water.

Now back to the market:

A few weeks ago, I increased my long positions.  As it was not a prudent to invest at high prices, I did not want to mislead my readers, so I did not put them up on my blog.

Over the last 2 weeks, the STI has been a bearish candle and a doji, signifying uncertainty.  I am preparing myself mentally and psychologically for a possible retracement.  I consider mental strength and strategic planning as the 2 most critical factors to my success in trading.

What is my plan if it happens? My plan is not to take profits, and to hedge my long positions.  The idea is this: I believe that I am holding on to strong stocks.  Instead of selling them, the idea is to short other weak stocks.

In SGX, it is slightly difficult to short stocks.  The 2 easiest ways are through Contract for Difference (CFD), and Extended Settlements (ES).  Even then, the number of stocks available are quite pathetic.  One of my brokers has about 100 CFD stocks.  From this list of 100, I have shortlisted the following for short positions:

The following are some of the stocks that I am eyeing for shorting (not in any preferred order):

1. Asia Enterprise
2. Gallant
3. Fragrance
4. Banyan Tree
5. Hi-P
6. Datapulse
7. CSE Global
8. Rotary
9. Stamford Land
10. Stats ChipPAC
11. STATSchp
12. Hwa Hong Corporation
13. Genting
14. Singtel
15. SembMar

Note that I will not be shorting all 15 stocks!  My plan is to short 5 stocks out of this list of 15.