Wednesday, 28 December 2016

Keep losses small

When suffering losses, an investor requires a return higher than the loss to return to breakeven. The graph below shows the subsequent required return needed to breakeven for a particular levels of loss.

From the above graph we can see that the breakeven return required grows exponentially as losses increase. It's vital important to keep losses very small.

Saturday, 17 December 2016

Trade like a Pro

To compete with the pro's, you need to think and prepare like them. Anybody is welcome on the trade playing field, but keep in mind who the opposition is. Think of it as you are running onto the rugby field and your opposition is the All Blacks. You might just get hurt.  Yes, on the trading field it's not fiscal, but you might just lose your money or self-confidence.  You’re thinking, not me. I'm not one of the statistics.  I'm born great?  I'm a great trader from Day One?

Tiger Woods was not born great. He has a daily practice routine:
  • 6 AM: gym for 90 minutes
  • 7:30 AM: breakfast
  • 9–11 AM: hit balls on practice range
  • 11–11:30 AM: putting
  • 11:30 AM–12:30 PM: play 9 holes
  • 12:30-1 PM: lunch
  • 1–3 PM: hit balls on practice range
  • 3–4 PM: work on short game
  • 4–5 PM: play 9 holes
  • 5–5:30 PM: hit balls on practice range
  • 5:30–6 PM: putting
Not convinced yet that you are not going to be a great trader on Day One? What if you did the following before a trading session to gain experience? 

  • Plan and execute your trade as the first experience.
  • Made detailed notes in your trading journal — that’s two experiences.
  • Discussed this setup with others — now three experiences.
  • Replayed the trade in your head — and four.
  • Made and watched your video recording of this trade — now five.
  • Met in a training room and talk with a group about this trade — and six.
  • Visualized making this trade — and seven.
  • Practiced this trade on a dedicated simulator — and 8 and 9 and 10.
With just this one trade, you can turn one trading experience into 10 plus. Developing a daily learning schedule, can help transforming one trading day of experience into 10. Pickup on your experience 10x faster. Become a pro to play with the pro's. Practise and prepare like a pro, trade like a pro.

Saturday, 3 December 2016

Compete with the kings

How to Compete with the big ones

It's easy, in rugby there is a saying: Tackle the biggest player by the ankle and he comes to ground.

So what we needs to do, is buying stocks at the ankles.  Searching for stocks, trading at their support levels and buy them at the support.  If the support is not holding the stock price up and it goes down lower, the tackler needs to release and getting up.  Otherwise he will pay with a penalty.  Put up some defense just below the support line and make use of a stop loss setting. Your goal, once you have bought into the stock, is to get to the other end of the playing field, back at previous resistance levels.  This will then be your target and profit taking area.

Once the support level is defined, you can start buying stock and hold it until it gets at previous resistance levels.  This is then the profit taking area, time to get out.  If you are a swing trader, switch your position to a short.  Continue riding the waves until it becomes invalid.  This trading range offered by the stock price action of MTN was a wealthy 20%.

Currently these stocks are rang bounding and might return some opportunities:

Looking at Shoprite's trading range we will noticed that the price is attempting to re-test support level and will give some buying opportunity, with a 10% target if the price returns to the resistance level.

Trade with caution as the markets are very unstable and uncertain.
@Duplo123 or join us on Skype