Am I Wasting My Time?

[roland]

Yes, I know - cut your losses and let your winners run.....

It sounds easy, and I'm happy to say that I have done it on other stocks but for some damn reason I couldn't get that in my head with OZL.

I got burnt a little with ZFX and stubbonly didn't want it's problem child OZL to do the same.

I have held through what should have been stops, I've pyramided, I've averaged down and all the other bad things - but I think I'm getting there.

My research on OZL has me confident that my fun with trading shouldn't char off too much skin, but if I need a smack in the head to set me right - then feel free with your comments.....

First image shows the trades - showing a gain of $1,680.34 gain (inc Div)

Second image is current position - showing an 11.2% loss or $3,269.34


Figures include brokerage

What I am doing is is entering at around each $0.05 fall and then sell off a larger parcel each recovery - taking a miniscule profit each time and offsetting the larger portion to my highest cot parcel.

My initial average was $1.97, my current average is $1.1937. As the cycles continue, I should be able to continually pull my average down and increase the profits.


Does this sound in any way like a valid trading system ?

Does anyone else trade this way, or am I on my own???

 

[roland]

Oh, if anyone is wanting to know what the column headings are for the current position - here it is again with a title bar.

Thanks for your comments

 

[roland]

Actually, I did the same thing with Westpac:

 

[roland]

come to think of it, Westpac was a little different - I just held on for dear life

 

[So_Cynical]

I was going to say this is what happens when your only paying $6 a trade...then i noticed your paying $19.95 almost a 1000 bucks in brokerage in just 1 stock (first image) to make $1,680.34

Thanks for sharing....makes me fell a littler better about some of the silly things i do.

 

[xddc]

i dun get it....how come the first xls includes 25/07/08 and 01/08/08 and the second doesnt?

 

[roland]

i dun get it....how come the first xls includes 25/07/08 and 01/08/08 and the second doesnt?

As mentioned in the post, the first image are historical closed trades, the second image is current live position.

Does that help????

 

[skyQuake]

What happens if there is no recovery? Or when you run out of cash to average?

Look up martingale systems on wikipedia

 

[xddc]

can u post the xls?
i might/not be able to help but id like to see whats goin on....

 

[roland]

What happens if there is no recovery? Or when you run out of cash to average?

Look up martingale systems on wikipedia

Good point and a valid worry. OZL in this case has no debt and very well cashed up, so I consider it less of a rick than others. I have enough cash to follow it to $0.50 if necessary

 

[roland]

What happens if there is no recovery? Or when you run out of cash to average?

Look up martingale systems on wikipedia

OK, I don't believe that I am using a Martingale System since I am not doubling up. I am actually happy to hold with an expectation of dividends returning.

Adding to my motives is the need to trade enough to keep my Comsec Pro Trader free, at least 8 trades per month for free access, otherwise $85 (or so) a month.

 

[nunthewiser]

and along comes BNB,SGW...........ETC ETC ETC

Good luck with it, not my cup of tea.

 

[roland]

and along comes BNB,SGW...........ETC ETC ETC

Good luck with it, not my cup of tea.

thank you nun for the heads up, I agree the risk needs to be managed and I wouldn't do it with companies running on debt like your BNB example.

 

[skyQuake]

thank you nun for the heads up, I agree the risk needs to be managed and I wouldn't do it with companies running on debt like your BNB example.

Trouble is you won't know where the next BNB may pop up. What if you started averaging in FMG at $10? $8? and these are the companies that have survived!

Not to mention those that do cap raisings.

 

[roland]

Trouble is you won't know where the next BNB may pop up. What if you started averaging in FMG at $10? $8? and these are the companies that have survived!

Not to mention those that do cap raisings.

yes, again I agree. As mentioned, I don't do it on all stocks. In this case OZL have no debt and a billion in cash, a cash positive gold and copper mine and some hard learnt lesson behind them. Of course a calculated gamble.

 

[roland]

P.S. I am not actually trying to average down.

I am averaging down because I can, and because I can still pull a little profit whilst doing it.

My main goal is to channel trade a parcel of shares with a 4-5% target, since that has been the historical swings through the channel.

The problem I am having, is that I am getting caught with market sentiment pulling the channel the wrong way. So I leave the parcel there to channel trade once the SP gets back to that channel.

 

[Trembling Hand]

Adding to my motives is the need to trade enough to keep my Comsec Pro Trader free, at least 8 trades per month for free access, otherwise $85 (or so) a month.

I wonder how many other traders try get over the 8 trades to get their "Free" data.

As just about everything else "free" it ends up being more expensive by factors of 10 to 100. In not just money but wasted time.

 

[brty]

The points raised are very valid, averaging down any company by any method has not been a good strategy, except on the companies that are near current highs. I hope you have heard of survivorship bias.

A better question would be, Where is your uncle point?? Where do you bail if it doesn't work on a particular stock?? Can you stop the damage from being catastrophic to your trading if OZL came out with a market statement that they had just lent 2 billion dollars (half loaned) to a minor subsidiary (10% holding) that is run by Skase, Bond and Spalvins??

Adding to my motives is the need to trade enough to keep my Comsec Pro Trader free, at least 8 trades per month for free access, otherwise $85 (or so) a month.

So you spend $160 per month on brokerage to 'save' $85. You don't see a problem here do you??

brty

 

[roland]

I wonder how many other traders try get over the 8 trades to get their "Free" data.

As just about everything else "free" it ends up being more expensive by factors of 10 to 100. In not just money but wasted time.

Yes, I would be interested to know that as well.

I have plenty of time and still get a thrill from making a trade. The 8 trades are not a necessity, but as I said there is some motivation there.

 

[brty]

Those Trembling Hands obviously make you type faster than me.

brty