XAO 1.76% 8,320.4 all ordinaries

Short Term Trading Weekend Lounge: 2 - 4th Mar, page-72

  1. 7,566 Posts.
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    Hi LG

    It's very hard to beat the maths ... best just to accept the realities imo. Long term one's trades will fit a bell curve... meaning 85% of the time one's decisions will be no better than anyone else's, sometimes you nail the best price and sometimes you ponder the what if's.
    https://www.thoughtco.com/introduction-to-the-bell-curve-3126337

    fwiw ... my approach to the problem of catching some extra profit along the way is to buy multiple parcels and set individual trigger prices for each parcel. ... i.e not one single decision but rather several small ones. imo... a 15% swing is a fairly common width for a price channel [quite often a stock falls a little short of that before retracing and I miss a profit opportunity... but, so it goes]. I only trade with a stock which I really, really like [i.e. something I want to own] and so I am fairly comfortable with this approach.... but it does require a lot of patience.

    However, if you find the right stock it can be exceptionally rewarding. Below is a chart of one company which got away.... but it illustrates the potential. A few years ago, I really liked FNP.... it traded around 40 cents for several years without doing much at all, but it was paying a 1 cent dividend and I very much liked the business....sadly, despite my opinions, I did not buy. Then one day it announced it was beginning to market its wares in the US ... the price didn't react particularly strongly but crept up very slowly... the next time I looked it had crept up to $2 .... and kept on creeping. A quick look at the chart below will show just how much this stock has consistently offered the patient early bird in terms of swing trading.

    big.chart.gif
 
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