some confessions about my trading , page-6

pmthiru

I really want to respond to you, but it's hard for me to respond without sounding like a prat. I think there are a number of people as highlighted in a recent article in the Sydney papers, that believe that making money in the markets is 'easy'. The assumption being that daytraders scoff truffles is simply not the case. I have never lost any huge sum of money in the markets. I can think of maybe one year in twelve where I was negative (again, not trying to sound the prat here). What I DO recognise are some classic issues that I would stay clear of.

1. I never borrow money. I've been offered CFD's, Margins, Extensions of credit, 'home' equity loans. I NEVER touch them. When I started trading back in the 90's, I think I had $15K. I might of used my credit card once to buy CBA shares when they floated. Davnet came, Melbourne IT, you name it, I was on them and made a lot.

2. Stopping out. It's a blessing in disguise. In some cases, I don't stop out completely. If I have 50K shares, I might sell 30K at stop and retain a small holding just in case.

3. Diversify. Have a number of shares to trade in sectors/news related/market cap/high liquity. Often the most money can be made on just tradng the same shares over and over in the same cycles. TRF was a classic example of this as was VIL/OBJ in recent times.

4. Stick to the plan. If making '$x' is the plan on a specific trade, remove the greed element and allow the trade to go through. I'm still trying to learn this one myself having botched four very good trades this week by moving the sell. All of which were in profit.

Rather than give it all away, trade in smaller parcels, trade only 10 shares and know them intimately, plan and stop. Usually, and this tends to often be the case, the price will come to you (lower), when you have stopped, allow some time for the price to stabilise at the lower level before renetering. HTX was a classic example of this this week. Use cash that you have not what you lender would allow. Never chase a share.

Anyway. My two bobs worth on a Saturday arvo.

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CYCLIST (I bought a new bike today)