Know your trading term
A lot has been written about an investor ‘knowing the term’ of any position that they take in the market. For example, when a long term ‘buy and hold’ position is taken, the investor must be prepared to ride the ups and downs of the market but must also be prepared to accept a lower […]
Why I’m a mechanical trader
Considering I am a huge advocate for mechanical trading, I thought that this week I would give a definition to all those that are interested and share the ten benefits of mechanical trading. For most, mechanical trading is a relatively new concept requiring explanation in itself. Mechanical Trading- definition: Mechanical trading is defined as using […]
The benefits of using a Trading System
The main benefits of using a Trading System are to: • Remove emotion from the buy/sell/hold decision. • Remove personal ego from the buy/sell/hold equation. • Exclude outside influences and ‘noise’ from the buy/sell/hold decision. • Achieve objectivity & consistency, trust and confidence, in the buy/hold/sell decision process. • Overcome personal expectations of the market. […]
How much capital is required?
It is ironic that generally the less capital novice investors have the more risk they take. They focus on higher risk trading instruments or higher risk trades seeking the large quick returns. Besides the additional volatility risk, they then magnify that risk by allocating too much capital to these high risk trades and in many […]
Rules, Rules and More Rules
If you are a follower of my weekly journal, you would understand that my approach for successful investment in the stock market is rules based and mechanical. The SPA3 methodology forms the basis for my trading decisions, risk management and money management but I have additional list of “Golden Rules” that I use to trade […]
The importance of controlling emotions when trading and investing
Financial markets have ups and downs, sometimes extreme, which cause market participants to experience emotional roller coaster rides in line with the market’s price swings. In recent years, as information that affects financial market prices has become rapidly and readily available, the volatility of the ups and downs has increased, along with the emotional swings […]
Some thoughts to kick off 2011
2011 is underway and 2010 is behind us! What’s in store for investors over the next 12 months? Well, I can’t tell you where the index will be on 31 December 2011 and I can’t tell you what trends and cycles will occur between now and then but I can tell you that there will […]
Thinking from a system’s perspective
With systems operating around us and our lives essentially dominated by systems – systems that are designed by humans for use by humans – why is it, that we seem to struggle to be able to accept this concept and the use of systems when it comes to investing in the share market? People flounder […]
You are surrounded by systems
Systems underlie everything we do, they are everywhere we look and we are in contact with or use them all day, every day. Yet there are many investors who have no system for their share market activities – believing instead that insider knowledge or tips from their broker or reading a newsletter will provide them […]
A great truth
Many traders and investors, who have experienced the highs and lows of trading, regularly look for a method or system in the hope that they will discover a “new” hidden truth. A great truth is that there are no “new” hidden truths in the universe of the markets, just “new truths” to individuals that for […]