Connect with Peter on LinkedIn!

Welcome to this newsletter

With the recent fall in BSL I remembered I had that trade earlier in the year (the details are in Peters Portfolio page on the website). I thought this would be a great teaching opportunity, as I am guessing there may be people out there that have this stock. The first chart below shows the stages of self sabotage, displaying the emotions that many traders and investors experience if they do not have (or stick to) a method. Do you relate to the emotions and trading procedure captioned in the chart below? Not only did this trader pay more than they had to for the stock, they either sold at a lower price, are hanging on to bigger losses, or may have even been in and out of the trade a number of times. Perhaps even doubled up here and there in an attempt to recover losses..how maddening!!

Follow the 7 captions below of this stressed and challenged trader.

The next chart is what would happen if you simply followed the 3 rules of 1/ buy, 2/ calculate risk, 3/ sell. That does seem a lot easier and less stressful?

This next chart is the stock that was bought when BSL was sold, freeing up capital to buy something else. Following the rules of this particular system, (the one on the 52 week high free alerts page on the website) when you sold BSL and freed up the capital, that capital was "re employed" into a better prospect. The stock signalled in the system that week was MGR. Now this is what trading or active investing is all about. Buy stocks that rise, when they start to fall or go sideways for a period of time, you sell and employ the money into another stock that is rising. The important thing is: do not attempt to do it too often. Most traders over trade, attempting to do this on a daily basis, not realising the probabilities are greater with weekly methods and therefore a lot less stressful.

Good trading or even active investing is very much about keeping losses under control. You can clearly see from the 3 charts above that the best thing to do was to get out of BSL as soon as the sell signal was given, and buy MGR. Not only would you have saved money on BSL, now it has fallen so much, you would be up on MGR. Being able to trade a simple method like the one above has nothing to do with things like local market conditions, overseas market conditions, interest rates, inflation, Russia, the price of gold or what gaffs the Federal treasurer makes. It isn't even about the statistics of the method or system. It's about you and your ability to recognise that you are self sabotaging your trading. Self sabotaging by not having a method to use, or if you do...not sticking to it. There does exist ways and means of overcoming self sabotage in trading and I will be teaching that in the upcoming courses. Click on the link for more details.

http://www.easysharetradingsystems.com.au/Trading-Course/

I have updated Peter's Portfolio to include dividends and brokerage. It's performing as per the testing, since being fully invested 6 months ago it's up almost 14%.

http://www.easysharetradingsystems.com.au/peters-portfolio.html

All the best with trading and life until next time, Peter.

"The main factor being studied was the ability of subjects to interpret what had happened in a positive way, to have cognitive reappraisal. In other words it is just not what happens but how one feels about what happens that makes it a seriously harmful or negative experience"

Nassir Ghamei (Professor of Psychiatry, Tufts Medical centre Boston)

If Facebook is more you thing, friend him here!