What are your Trading Breakthroughs?
- Thread starter mmm
- Start date
One of my alltime favourite quotes:
The best explanation of a plan is "the surfer" who goes surfing. Goes down to the sea. Checks the weather conditions. Is the surf up?. Is the breeze on-shore or off-shore?. If the conditions are right, jumps on the board and paddles out 300 meters. And waits. Waits for the right wave. There are many waves. The key is to pick the right wave. Don't want to pick one too soon or too late. The choice of wave comes from seasoned experience. Not a surfing plan. A surfer does not go out surfing with a surfing plan in mind. The conditions of the moment on the day will dictate the play. Depending on the conditions, what was a good wave yesterday might well be a poor wave today
The best explanation of a plan is "the surfer" who goes surfing. Goes down to the sea. Checks the weather conditions. Is the surf up?. Is the breeze on-shore or off-shore?. If the conditions are right, jumps on the board and paddles out 300 meters. And waits. Waits for the right wave. There are many waves. The key is to pick the right wave. Don't want to pick one too soon or too late. The choice of wave comes from seasoned experience. Not a surfing plan. A surfer does not go out surfing with a surfing plan in mind. The conditions of the moment on the day will dictate the play. Depending on the conditions, what was a good wave yesterday might well be a poor wave today
I have to give my opinion about this topic. I'm new in this forum but I've been trading for 7 years (even thought I don't have a degree). In the last two I had my "breakthrough".
Trading is like gambling. It depends on LUCK and control. NOBODY knows what the market will do next. It ALWAYS changes so there's no thing as an automated system that works forever.
If you want consistency, don't expect to average +30%/yr. Expect realistically 7%-8% for.
- Buy stocks that pay DIVIDENDS. Look for stocks that paid dividends consistently for many years (or decades). This is the best proof the company is making money.
- Avoid small caps.
- Don't use margin.
- Diversify. Would you invest in a Malibu Beach house (for rent) or a dozen of real estate around the world? Never bet too much on one sector. My portfolio consist in around 50 equities including gold/silver and even bitcoins.
- Every once in a while the market (as a whole) gets a punch. I don't mean Black Swans. I mean those days when solid stocks fall +4%. Use the dividends to buy more. It's the Martingale method but you're buying shares from companies who pay you dividends...cheaper. I avoid buying the ones who climbed and focus on the ones who lost. Most sectors have cycles and you'll end increasing the amount of your equities of choice at better prices.
I know it doesn't sound like a good advice but when you have stocks with a good track record (of dividend paying) and you rationally believe the business is sound, don't sell the stock. If it goes down, you have the option to buy it "cheaply".
I know past record don't mean future results but I look for stocks with at least +15 years decent track record of dividend paying and that it didn't (heavily) sinked during crisis (2001 and 2008). I know the US economy is not as strong as the government make us believe and in case a Black Swan appears, my portfolio won't tank in case I need liquidity.
The concept is to have enough shares that pay you enough so you don't have to spend it all. If you receive 200k annually and you save 100k, next year you might receive more than the first year. Compound Interests. Like Einstein said (If I'm not mistaken), the most powerful force in the universe. That's why rich get richer. They only spend a fraction of what they make, enabling them to save and invest more and more.
There's more breakthroughs but I don't wan't to make my post too long cuz people get upset
Trading is like gambling. It depends on LUCK and control. NOBODY knows what the market will do next. It ALWAYS changes so there's no thing as an automated system that works forever.
If you want consistency, don't expect to average +30%/yr. Expect realistically 7%-8% for.
- Buy stocks that pay DIVIDENDS. Look for stocks that paid dividends consistently for many years (or decades). This is the best proof the company is making money.
- Avoid small caps.
- Don't use margin.
- Diversify. Would you invest in a Malibu Beach house (for rent) or a dozen of real estate around the world? Never bet too much on one sector. My portfolio consist in around 50 equities including gold/silver and even bitcoins.
- Every once in a while the market (as a whole) gets a punch. I don't mean Black Swans. I mean those days when solid stocks fall +4%. Use the dividends to buy more. It's the Martingale method but you're buying shares from companies who pay you dividends...cheaper. I avoid buying the ones who climbed and focus on the ones who lost. Most sectors have cycles and you'll end increasing the amount of your equities of choice at better prices.
I know it doesn't sound like a good advice but when you have stocks with a good track record (of dividend paying) and you rationally believe the business is sound, don't sell the stock. If it goes down, you have the option to buy it "cheaply".
I know past record don't mean future results but I look for stocks with at least +15 years decent track record of dividend paying and that it didn't (heavily) sinked during crisis (2001 and 2008). I know the US economy is not as strong as the government make us believe and in case a Black Swan appears, my portfolio won't tank in case I need liquidity.
The concept is to have enough shares that pay you enough so you don't have to spend it all. If you receive 200k annually and you save 100k, next year you might receive more than the first year. Compound Interests. Like Einstein said (If I'm not mistaken), the most powerful force in the universe. That's why rich get richer. They only spend a fraction of what they make, enabling them to save and invest more and more.
There's more breakthroughs but I don't wan't to make my post too long cuz people get upset
That I can break even with an even risk reward flipping a quarter for direction. (short term). Excluding commissions.
Add a couple basic but effective rules. Increase win ratio. If possible raise frequency of trades while maintaining win ratio.
Add a couple basic but effective rules. Increase win ratio. If possible raise frequency of trades while maintaining win ratio.
My biggest trading breakthrough was the fact the markets are driven by emotional traders and reactionary orders for the most part. It's finding the inefficiencies, and the areas where the share/contract MUST re-valuate to the 'correct' valuation at some point, and taking advantage of that price move.
As much as markets are supposed to rely on actual value, they are rather run by perceived value, or emotional reactions.
As much as markets are supposed to rely on actual value, they are rather run by perceived value, or emotional reactions.
The realisation that in the end I couldn't just copy someone else but just had to find my own personal blend of technical analysis http://localsfoolsgold.blogspot.be/2013/12/daytrading-20131203-tribute-to-irish.html a tribute to one of the biggest xspurts (pun intended) of trading