Trading Techniques   

Common mistakes most investors make

Diverse means that your gains or losses will be moderate.

 

Not exactly safer! It depends how it is 'bundled' and your risks are diversed accordingly. The RISK is still there - diverse doesn't mean safer! It is the same once the Market Crash. So prevention is your best proctection against risks! Cheers!

 

Hi tonersweat,

ETFs are traded like any normal stock. You can get its prices like any stock.

Just type in "etf" at the quote box above in SJ and you can see its prices.

 

tonersweat, ETFs are generally safer than individual stocks becos u are  effectively diversifying your funds into a portfolio of stocks in that ETF. however, if the entire stock market crashes, your ETF also crashes.  = )

 

I am new to ETF, anybody can advise where to get information like pricing. Is it safer to buy ETF than stock.

 

I am new to ETF, anybody can advise where to get information like pricing. Is it safer to buy ETF than stock.

 

L'more, if there a 12% appreciation pa. is very good. The problem is the property pxs now is a bit excessively speculative high. How long could that last is anybody guess! It must cool down or The Govt will intervene, for sure! Cheers!

 

Hi geojam,

It's amazing to hear that you retired at 45 yo after making a killing in the stock market. I guess that's the aspiration of all of us here..hehe. Hope you can share with us your experiences, strategies and lessons to learn :-)

 

Good memory u have,sporegal.

Yes that is rite.I live in australia.

I trade here in aussie shares.I make it while working using office internet and i concentrate on "value"investing unlike TA or FA.

But i admit here in Australia the share market has been doing well for the last at least 8 or 9 years cos of resouces boom etc...

So it is "easier"to make money.

Most punters expect to make 20% a year.In year 2006just finished ,it can be like 40 to 50% inclusive of divvy and capital gains.

there are still good resources shares here.

I also have trading in spore market.But only for some divvy so that i can use it for holidays money.

Also,here we can deduct tax when u incur interest expenses when buying shares,eg.margin lending interest expenses.

 

If I'm not wrong, I remember reading long ago that geojam stays in Australia... is that right?

 

hi geojam...

It's been a long time since you last posted here?

I suppose you are a big time trader like Stanley Kroll... :)

Any valuable tips for us?

 

I am one that confess to making big on the stock market.

I "retire' at 45 to do full time share trading.

 

Put down deposits and take a long period loan like 30 years might not be such a wise move to me. A property price appreciation of 12 - 18 % is not much. You pay so much money in interest with a long period and the interest you pay could be more than that "nice" property price increase. 

I prefer to gradually grow your wealth and maybe limit the loan period to just 10 - 15 years.

 

I think they just put down deposits only lah...still have to pay many more installments. When the Market crashed, and if they're caught, you'll be hearing alot of banks auctions and thus the crash of property markets follow. That is the life cycles of Markets.......very interesting phenomenon! Cheers!

 

Thank you ipunter.  I am surprised that there are people who can win so much that their winnings can  buy condo !  Perhaps not so surprising if the winnings are over several years.....

 

Rickytan...



Bet size is the key... if you have 100K for playing,  you can for instance divide it into 10 equal bet sizes, so each bet being 10K. Then you can play 10 counters of 10K each simultaneously if you can withstand a total risk exposure. If you do this, you may also stand to lose much, since your total capital is only 100K. But many people wouldn't bother with such 'calculative' games, as this wouldn't make them rich. Since becoming rich is deeply ingrained in our culture, they would prefer not to 'waste time' with such petty games. But actually, I think there are many who have become rich by betting big. There's no doubt about this, as I see people are buying choice expensive condomuniums with their stock market winnings.

 

Hi ipunter, would you mind to elaborate how you "punt" :)  If one adds up all your punts ie "punt here, punt there, punt everywhere" , it is also equal to one big punt....Unless you are saying that they are punted in different counters so you are spread your risk ? Or do you limit your punt amount to a total combined quantum sum , say $20K max ? Thank you :)

 

I believe one needs to have good "money management" skills and the ability to adjust your risk profile accordingly. You can gradually increase your risk profile upwards as your profit grows........

 

Please allow me add...



In this regard, if your punt size (amount of bet) is big, you stand to lose big. So to be effective, you must approach the stock market right from the beginning with a punt size that will not be devastating to your life when you lose. I say 'when' and not 'if' coz you are bound to lose some of the bets.



In my early days, I used to bet big, but I lost so much money that made me very scared of betting big now.



So now I punt punt here, punt punt there, here punt, there punt, everywhere punt punt (including 4D)... but I punt small, you see... :)

 

We all make mistakes at some time in our trades. Sometimes the mistakes are costly and painful. The natural reaction for some is to quickly recover back that loss. As a result, we tend to react in a rash manner and not keep our head cool. Acting rashly plunges us into a "deeper hole". You might find yourself so "deep in the hole" that you feel so demoralised and making that "comeback" is going to be very hard.

For some they might continue to buy in large positions again to attempt a quick "comeback". In this vicious cycle, they could end up in even bigger financial difficulties. The similarities are nearly the same as those gambling outside.

Hence in my earlier post, I mentioned about staggering your buys. If we make a mistake, the loss and pain is not so great and you can recover back.

So if a mistake is made, take a step back, keep cool and take the appropriate action. Don't be impulsive and act rashly.........