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Originally Posted by wavelandscott
Have a limit - don't get too greedy or reckless
Have a plan (industry stock type) - trade in something that you know and understand...if you don't understand how the company works...stay out of it!
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Yep Im really only hoping to play the current volatility cycles with top companies that I know, and am working with a watchlist of selected companies. Penny stocks are a no-no for me.
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"Systems" are for suckers - just like at the casino, strip out emotion...it is not a game. There are a lot of other folks trying to do the same thing you are...except they have better and faster tools don't get too caught up in the momentum.
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I have reading up a lot and have learned the basics of technical charts, candlesticks and trends. I have been closely watching the markets for about a week now and every day is teaching me something new.
Im going to be recording on paper what I did right, what I did wrong, the reasoning behind every action, the differences between my expectations and the actual, and find the reasons behind the happenings.
Im using CommSec, and the free access option doesnt give you live graphs, you have to keep refreshing and manually bring up the charts. I found a great bit of free software called quotetracker which auto refreshes the market info and charting as recent as the last refresh.
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Although they should, markets do not always operate logically...the events of the last several months demonstrate this.
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I read a quote of wisdom from a well known US trader who said "the markets can remain irrational for longer than you can remain solvent".
That was the lesson from the dotcom crash where traders who
thought they knew the bubble was about to burst had kept betted on it happening as the bubble kept growing and they blew it. The lesson is risk management and not throwing good money after bad chasing a losing position.
I know it sounds like famous last words, but we have hit a new bottom last week, and with the gloomy economic forecasts out of the way and governments around the world throwing money into stimulus packages, I wouldn't expect any major plunges from here until into the new year.
Until then i'll play the ups and downs of the All Ords with quality companies.
Most of my money is currently safe in term deposits at good interest (compared to what you can get now) and when the bottom comes, I'll go into a portfolio of managed funds and let the pros do it for me.
*Tip - If you can select your own funds, theres no need to be paying 4-5% off the top in commissions to advisor services. A number of services such as CommSec or Fairfax will refund you the entry commissions.
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Day trading is not for the faint of heart...good luck to you I hope that it all works out well for you...but just in case, I am certain that I would interested in your SDM if it comes to that...
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Thanks for the tips and kind wishes, but theres no way the SDM is going in a fire sale
*Disclaimer: Im not advising anyone to do what I'm doing