7 Reasons Supporting a Systematic Stock Analysis Process
Using a structured analysis process
is essential for several reasons. Our purpose is to help educate and guide members in that process.
Market Neutral of Index Unaware-What does it mean?
I go about my business of doing what I do unemotionally and that’s how you follow a strategy, with belief, conviction and a fair dose of money management.
Happily Managing Stock Losses
Bearing small losses is a good thing and means you are trading well
LOSSES
Yes, I do take losses! Lots of them, but small ones only. But we do need to take them, and understand why, it then helps you to learn to trade properly in this somewhat imperfect world of trading.
Losses are a part of doing business. A trading loss should put you one step closer to success. FAMOUS FAILURES
The big benefit of locking in your loss, yes there is one, is you turn neutral, you are unexposed, and not at risk. You clear you head, discard the baggage of a loss and are fresh and ready to take new prospects on.
STOCKRADAR’S TRADING CENTRE
The Trading Centre is almost like a blank canvas right now (May 2022) with only 20% of Stock Picks (read qualified uptrends) as we endure this correction, so we will have a swathe (80%) of potential opportunities when the market turns up.
But along the way we need to get used to the fact that stocks don’t go one way meaning we have to factor in the inevitability of regular market corrections as we are now. Why? Because we don’t know when they will happen, but we know they do – fact. As uncertainty has prevailed the smart thing is to keep your risk controlled.
PORTFOLIO RESULTS
Portfolio results consider all markets. We have to because we don’t know when corrections are going to happen or even when they are happening. Scary. So, we know the facts. If you trade stocks this will happen:
A 10 % fall every 2 years (we’ve just had one of those)
A 20%+ fall every 4 years
A 30%+ fall every 10 years
So, build this into your expectations and your trade plan because you need to. Do you know what you’re going to do if the market/stock drops 10%, 20%+ or 30%+, Because you need to know that as well as these corrections are the norm, and we are going through one right now. It is important to be in control of what you do, or you will flounder. Don’t forget, the majority of the time the market is rising. Despite the setbacks a good strategy will still generate good returns.
Control: If the market or stock drops 10%, 20% or 50% do you know what you’ll do?
WHAT DOES THE STOCK PICK COUNT TELL US?
Has dropped significantly as it did in 2007 post an unusually strong market surge. Are we getting complacent? The recent rally mirrors the 2003-2007 rally. After such a market rise coupled with the drop in the Stock Pick Count we should at least be being cautious.
Stock Trading requires Time, Patience and Grit.
Trading is not something we make happen just because we work hard. We firstly gain knowledge, move onto a degree of understanding, develop a style of our own, and then let it flow naturally and confidently as you build trust in a process.
The Weekly Wonder
The weekly perspective gives me clarity and the ‘distance’ to assist me in formulating and implementing a trade plan effectively. The ‘noise’ drives us farther from the truth.
It’s the stock markets fearful times that can kill us – if we let them
Perspective, reality, panic, fear, expectations are just some of the emotions we endure. We counter these forces with focus, control and discipline.
We already know how to make money
The thing is: We already know what we need to know to make money. It’s how we put it all together that matters. One step at a time.
Trend Following – have a plan and stick to it
Good traders are like the surfboard riders who catch the wave as it breaks, they ride it hard, and hop off before it flows back into the sea.
Take control of your stock market investments.
Take Control It really is that easy How? The Nike motto comes to mind. Well it finally came. We all knew a nasty correction was going to happen. What goes up must come down. Still we respond with the usual surprise and ‘what should we do’ questions. Many of us are in denial because of […]
Jesse Livermore – Trading rules never change
Jesse Livermore’s Trading Rules Written in 1940
Jesse Livermore was one of the greatest traders who ever lived. You can read more about him here. Here are his trading rules written in 1940. You will find that many of them still apply today, proving that very little changes in the market over time.
1. Nothing new ever occurs in the business of speculating or investing in securities and commodities.
2. Money cannot consistently be made trading every day or every week during the year.
3. Don’t trust your own opinion and back your judgment until the action of the market itself confirms your opinion.
4. Markets are never wrong – opinions often are.
5. The real money made in speculating has been in commitments showing in profit right from the start.
6. As long as a stock is acting right, and the market is right, do not be in a hurry to take profits.
7. One should never permit speculative ventures to run into investments.
8. The money lost by speculation alone is small compared with the gigantic sums lost by so-called investors who have let their investments ride.
9. Never buy a stock because it has had a big decline from its previous high.
10. Never sell a stock because it seems high-priced.
11. I become a buyer as soon as a stock makes a new high on its movement after having had a normal reaction.
12. Never average losses.
13. The human side of every person is the greatest enemy of the average investor or speculator.
14. Wishful thinking must be banished.
15. Big movements take time to develop.
16. It is not good to be too curious about all the reasons behind price movements.
17. It is much easier to watch a few than many.
18. If you cannot make money out of the leading active issues, you are not going to make money out of the stock market as a whole.
19. The leaders of today may not be the leaders of two years from now.
20. Do not become completely bearish or bullish on the whole market because one stock in some particular group has plainly reversed its course from the general trend.
21. Few people ever make money on tips. Beware of inside information. If there was easy money lying around, no one would be forcing it into your pocket.
