Perhaps this is a good time to think about this whole idea and process of trading, or I prefer to call it active investing. Trading is a word that does not discuss or include the concept of trade frequency, that decision is left to the operator. Many people hear the word trading and have visions of a person locked to a screen 24/7. To clarify, my “trading” frequency being a weekly trend trader is an average of one trade a fortnight.
The goal of trading is to outperform the market, if the market makes an average of 12% p.a long term then if you are not beating that return why bother? Put your money in a fund and go for a nice walk.
Trading is simple, but we make it hard because we are human and we worry. Trend trading is arguably the simplest method known. It requires 3 simple steps. Choose a stock that is trending up, decide how much to buy, know your exit. Of course within those 3 simple steps are many decisions to be made, humans don’t like to be confronted with too many decisions as it creates a psychological minefield. That’s why all the old dogs of trading say “keep it simple”.
Keeping things simple isn’t easy, we want more control, less emotional pain. We want more returns, less pullback, more certainty, higher win rates, higher dividends, just more………….Less acceptance. Accepting that trading will be as difficult as we make it!
I have been quiet on the news letter writing. I have been busy moving back and settling in to my home town of Kincumber on the Central Coast. I have continued to post the 52 week stock highs on the website every week. Peters Portfolio, the publicly posted live portfolio has continued to plod along. Its up 28% since March 2014, so averaging around 20% p.a. That’s below my desired average of 25 to 30% but hey, the 2 year mark hasn’t arrived yet and I remain positive. It has been a difficult sideways market so its time for me to accept that’s what the market has given me, as well as identifying where improvements can be made.
If you want more detail (with numbers and graphs) of those 52 week highs or Peters Portfolio you can visit the links below.