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The market has been volatile lately, has that been unexpected? Not really because if you think along the guidelines of probability, it was due to come because the market had been slow and steady for quite some time. There is but one certainty with the share market...change.
I have had some correspondence from readers questioning their exits, is it too fast or too slow? I am getting whipped here, giving back too much profit there...what is the answer? The answer is normally "what is your objective". What are you trying to achieve....I want to make money you say.....yes but how are you doing that and what is your plan? How many trades a year do you want to do, 10, 20, 30 , 50, 100, more? Do you want to watch the market and trade daily or weekly, what is your emotional preference, more control or more flow?
I teach and trade weekly systems, I do that because I personally like them, but also because I notice that most traders and investors that stay in the game, and dont give up, end up trading weekly systems. Why? They are easier! Weekly systems with weekly buy or sell signals tend to block out the "noise" of the market, giving you a clearer idea of the bigger picture, showing you the bigger trend and feel of the market. Ah yes you say, but stocks move down mid week, they move up end of week too! Grasping at mid week moves is irelevant to the big picture goal, and that is sustainable long term profits.
My system does abround 26 trades a year, on average one a fortnight. I focus on trending stocks with strong fundamentals, ones that have a tendency to not over react to market volatilty and hold the line. I also set my exits wide enough for the stock to move around with the market volatility, avoiding whips, but within my risk level parameters.
Trading is very much about personal preference, finding what works for you. At some point you need to choose a method that you like, put it in the market and see how it goes. That will tell you immediately if weekly trading is for you and what sort of exits you prefer, fast, medium or slow. There is no perfect method, quicker exits normally limit pullbacks, but do more trades. Slower exits do less trades, but have slightly bigger pullbacks.
If you are struggling to find or develop a method you feel comfortable with, perhaps that could be your focus for next year, you know where to come for help.
THANKS AGAIN
Thank you again to all the people that donated to the Allana Beltran fundraiser, if you want to check the progress or donate a Xmas present here is the link.
https://www.mycause.com.au/page/85792/helpstopallanasmigraines
MARKET COMMENTS
This is an interesting comment: "Morningstar writes in its outlook for 2015 that the decline in the Australian share market in the second half of 2014 has improved the average price/fair value ratio across its coverage universe to 0.97, the cheapest it's been since late 2012."
As always you can go the the 52 week high page on the website to view charts and comments about the market. I leave about 6 weeks of brief comments about the XAO before I delete them, so you check and see if I am reading the market any good! Also below is the link for Peters Portfolio, which has held up beautifully through the recent volatility maintaining a return of 25% annualsied. Links Below.
http://www.easysharetradingsystems.com.au/peters-portfolio.html
http://www.easysharetradingsystems.com.au/How-to-Trade/52-week-highs.html
HAPPY CHRISTMAS
Happy Christmas to you all, thank you for reading my newsletters this year, putting up with my mistakes and glitches! life is a learning curve, sometimes a steep one. I hope you have a great time with friends and family. Be patient and kind, try not to drink too much, or worry about the market.
Peter
"The time you enjoy wasting, was not wasted"
John Lennon
If Facebook is more you thing, friend him here!
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