How to turn $9,500 into $550,000+

[Col Lector]

Gidday S-The-C....
Assuming you have done the research AND thus picked FMG as a trend-vehicle
You failed the balls test....WHY did you place a stop-loss??

I am sceptical as to whether charts are able to beat the human brain when it comes to securing the meatiest part of a stock/sector rally...
ie,
Latereral thinking to pick the trend early or before they appear
Confirm the trend potential by reviewing historical data (eg, supply/demand graphs; inventory & production movements)
Chase up authorative (&obscure) information sources to further confirm the potential & unfolding of the trend...Google and Google News very handy here.

Add balls....having the conviction to hold/add & follow through on your trend pick when others are wavering.
And tech/a I agree....use leverage to accelerate.

 

[tech/a]

You failed the balls test....WHY did you place a stop-loss??

Dont think he failed anything--well perhaps he failed the stupidity test!.

To NOT have stop particularly with stocks that can swing wildly,isnt showing balls,more stupidity.

All he failed to do was have a RE-ENTRY stratagy.

I dont think he's off the mark at all.

 

[Col Lector]

But tech/a...his strategy as stated was NOT to have a re-entry strategy...ie, set and leave. Therefore he has to have complete faith in his initial choice and that it will gain over the longer-term REGARDLESS of short to medium term flucuations, ie, the balls to back his initial conviction. Placing a Stop-loss negates this

 

[tech/a]

So as we can see its a case of luck to a degree.

So how can we achieve what Kris is suggesting and bring luck to us.

The best way I can explain this is those stocks we have in the long term method which have turned out to be 100's of % winners.

At the time of taking the trades we had no idea they would do that.
We could control risk by setting a stop.
This also had the effect of getting us out of trades which basically did very little (Not the most efficient way but it did this to a degree).
When stopped we just took another trade. I remember we actually re entered 2 or 3 trades as they were triggered again. I also remember CTX which was exited at $8.20 something was triggered but wasnt taken due to lack of funds.

Anyway the point is be quick to get out of those going against you or doing nothing and Slow to get out of those which are in profit.

One stratagy I have mentioned before is that of "Free trades".
Once a trade reaches 100% (Or whatever you choose) sell the initial capital and just let the Profit side of the trade go on indefinately. It can be traded again and again if you like. Building profit and removing Base capital to explore other opportunities.
Eventually over time you could have 20 or so stocks all trading in profit (As they would have to be delisted to lose it all!) letting profit run.

Further you could remove profit from those going stagnent and put it into those which are booming.---a million ways to improve performance.

Much easier to let a profit run when
(1) You have one.
(2) You dont need it to live on.

 

[stoxclimber]

One stratagy I have mentioned before is that of "Free trades".
Once a trade reaches 100% (Or whatever you choose) sell the initial capital and just let the Profit side of the trade go on indefinately. It can be traded again and again if you like. Building profit and removing Base capital to explore other opportunities.
Eventually over time you could have 20 or so stocks all trading in profit (As they would have to be delisted to lose it all!) letting profit run.

Nice from a psychological point of view, but doesn't make any sense from a financial one - if its good, why are you selling? If its not good, why are you holding half?

 

[YOUNG_TRADER]

One stratagy I have mentioned before is that of "Free trades".
Once a trade reaches 100% (Or whatever you choose) sell the initial capital and just let the Profit side of the trade go on indefinately. It can be traded again and again if you like. Building profit and removing Base capital to explore other opportunities.
Eventually over time you could have 20 or so stocks all trading in profit (As they would have to be delisted to lose it all!) letting profit run.

I do this all the time, when see a company with excellent LT fundamnetals, buy, then at some point sell enough to cover outlay.

 

[tech/a]

Nice from a psychological point of view, but doesn't make any sense from a financial one - if its good, why are you selling? If its not good, why are you holding half?

A question I myself have pondered for some years (I dont do it myself).

I think the answer lies in timing.
Thats what we all do I guess to a degree in technical analysis.
We can specifically look for and set ourselves up into outlier moves (Those moves which can be 30-100%+ in a few days or weeks rather than Months or years.)

We dont know when these will happen but we can place ourselves in the position to take advantage of them if and when they do come.

By leaving some of our trade open and using funds to place ourselves in other setups. I guess the idea is to place more odds in our favour to catch more of a move---after the moves we are on inevitably slow or go into lengthy corrective moves.(The reason we sell some).
Of course if there wasnt something (Percieved as more) attractive to buy into you wouldnt sellout part of your position.

Wether we do this and how efficiently we do do it is of course conjecture.

 

[Col Lector]

Tech/a....cant fault your comments...
as I see it "Opportunity-cost" and "limited capital" are the main drivers for changing from one share to another...ie, jumping onto a faster train when you assess that the momentum of the one you are on is slowing.
This is what the FMG sit and forget scenario overlooks....if you don't bother reading the train-timetable (ie, reassess the relative merit of your investment along the way) you will miss that bullet train coming through that will advance you faster to the terminus station ($550K+).
I have endeavoured to mitigate the limitation of capital by jumping trains along the way....to some success...only to watch the one I bailed out of take off again (in CTX $2.57....out $5.50).
The success of reentry is complicated when there are so many trains speeding through and you only can use 1 ticket at a time. I have found that margin-lending has helpedto a degree...ie, more trains for the buck. Leveraging off that "set & forget stock " (in MCR 36c and holding half original parcel) that you are very confident of longerterm may prevent missing gains while rushing between platforms...and ideally the dividends will subsidise some of the transaction costs inherent....

 

[Magdoran]

Its quite simple and requires very little time at all.

There is no need to spend hours drooling over charts, using all kinds of T/A, and F/A to justify why you bought what you bought.

It is as simple as a buy and hold approach, with no attention needed.

Here is the story, a true story at that of how it could have been achieved.

I bought FMG back in Aug 2004 for 64 cents, the trade took me about 10 minutes to complete, after reading the announcement etc. Of course I sold out 2 weeks later after it had hit my stop-loss (10%). But thats not the point!

Now look at the price of FMG mid $30's and even reached $40 over the past 2weeks

You see, you can make extreme amounts of money with no effort required at all.

I could have executed that trade and never turned on the computer again for 2.5 years, then come back to see a massive account balance.

So it really does pose the question are most of us just simply wasting time mulling over hours and hours of charts, glued to a computer screen etc, when the majority of us could just buy almost any mining stock in the midst of a mining boom, and make squillions, just by being patient.



..

Awwww Stop the clock (STC), so you’ve discovered the Holy Grail!


Why oh why have so many of us wasted so many years of our time trying to develop systems, styles of analysis, and even studied various financial instruments, when all we had to do was to follow your omnipotent example and instantly make millions!

You’ll be a multimillionaire soon, won’t you STC?! And with no effort either. No plan, no analysis, no system. Marvellous! You just divine a sector you think is going to the stars and buy and hold! You must be so monumentally gifted compared to the rest of us mere mortals. The rest of us have to apply ourselves and persevere.

Ok. If its that easy lets try it again. Whats your next pick?

I second nizar’s request in post 4, what’s your next pick? It’d be great to see you pick a stock at the point of entry (no hindsight posts please), and then post when you take profits… look forward to seeing that.



Regards


Magdoran

P.S. I thought R0n1n put up a really interesting link to a Psychological perspective on a blog which I think is relevant to this case (see the lower link to the actual blog entry – great reading!):

https://www.aussiestockforums.com/forums/showthread.php?t=7143

http://traderfeed.blogspot.com/2006/12/three-pervasive-myths-of-trading.html

P.P.S. Fully agree with Kauri:

STC...
anything is possible with hindsight... when did you decide that a mining boom was underway.... would you have divided your $9500 between your other certainties at the time ...i.e LVL , BTV etc??

 

[nizar]

STC...
anything is possible with hindsight... when did you decide that a mining boom was underway.... would you have divided your $9500 between your other certainties at the time ...i.e LVL , BTV etc??

Exactly.
I agree 100%.

Also agree about what tech said and buying back, and only recently iv realised it.
JUst because you sell something doesnt mean you banish it from the watchlist and ignore it all together.
Keep an eye and get back in on the breakout.

Just like me and AGM. I bought it in early december when it broke into 10 year highs at 40c. Initial entry 42.5c. Initial stop 38.5c (i didnt want it closing under 40c). It never got near my stop. But it just hovered at 40-45c for like 2-3 weeks, which was ages given my idiotic short term approach back then. So i dumped it at a small profit, and moved on.

Then AGM goes onto $1++.
The mistake wasnt selling it. Rather, it was not buying it back when it broke out of the 1-month range on volume into 50c and beyond.

 

[nizar]

Awwww Stop the clock (STC), so you’ve discovered the Holy Grail!


Why oh why have so many of us wasted so many years of our time trying to develop systems, styles of analysis, and even studied various financial instruments, when all we had to do was to follow your omnipotent example and instantly make millions!

You’ll be a multimillionaire soon, won’t you STC?! And with no effort either. No plan, no analysis, no system. Marvellous! You just divine a sector you think is going to the stars and buy and hold! You must be so monumentally gifted compared to the rest of us mere mortals. The rest of us have to apply ourselves and persevere.

I second nizar’s request in post 4, what’s your next pick? It’d be great to see you pick a stock at the point of entry (no hindsight posts please), and then post when you take profits… look forward to seeing that.



Regards


Magdoran

P.S. I thought R0n1n put up a really interesting link to a Psychological perspective on a blog which I think is relevant to this case (see the lower link to the actual blog entry – great reading!):

https://www.aussiestockforums.com/forums/showthread.php?t=7143

http://traderfeed.blogspot.com/2006/12/three-pervasive-myths-of-trading.html

P.P.S. Fully agree with Kauri:

Great post Mag.

 

[ta2693]

I do not very keen on turn $9500 into $550,000.
From my point of view, the successful share trading is to assess the possibility and outcome and correctly evaluate the expectation value. if the expectation value is negative, I will sell. If the expectation value is positive, I will buy.I reassess my position everyday according to news, rumors, weather forecast and tech analysis. If some stock can always be valued as positive expectation value, I may hold it in very long time. hopefully some share will get from $9500 to $550,000.

 

[tech/a]

Moggie.

STC isnt saying he can do it nor is he saying he intends to do it.

The point he is making---hindsite or not is that it can be done IF you found the right stock/s and stuck to it.

I've done it,had no idea I was going to do it when I took the trades,and its on public record.

Did the same with property---had no idea that the housing boom of booms would occur when I bought my first 2 properties in 1996.

It doesnt matter HOW you do it,it does matter that you put yourself in the position to be able to take advantage of a great opportunity,if and when it arises.

Most who focus almost fanatically on analysis are more about being right than being PROFITABLE.

Application being the key.

Something Ive not seen a great deal of in your writings (Application of analysis)

 

[insider]

Look you have to stop looking at things like I should've done this or done that and not be happy with what you have because that's pure greed... Because in that case I should've put $5000 on PDN at 1 cent and sell them at $10... a 1000 Bagger in 4 years... that's 5 million bucks

All you're doing is suffering... what a waste of energy and time...

 

[Magdoran]

Some people only see what they want to see, and don’t really read what is printed.

How can anyone not conclude that STC is putting up an approach in answer to technical analysis and fundamental analysis? Sure, one of the premises ventured in support of the conclusion is that STC could have achieved the” $9500 into $550,000+”, but this was clearly illustrating evidence that the objective of the argument could be achieved. The conclusion was that you can utilise his approach and can dispense with various types of analysis and perform better.

STC clearly draws the conclusion that fundamental analysis and technical analysis are a waste of time as shown in the quotes below - These are Stop the clock’s core notions:

why do we get these T/A and F/A freak-shows charting things this way, that way and all ways an[d] cutting other members opinions down for the hell of it. Not to mention the thousands of wasted hours learning all this garbage, and attending seminars and writing software etc…

Thats the point...no specific stock, no charting, no F/A, just pick anything within the mining industry and you have just as much chance of making serious money from it, than your next door neighbour who has spent all year attending seminars, mulling over charts and F/A etc.

He’s essentially saying that just picking a sector and holding a stock will equate with the performance of systems that have taken years to develop, hence why waste the time developing them.

This is a long bow. It’s essentially saying “I’ve got just as much chance of becoming a millionaire because I divined a magic number for Lotto (picked a stock on a hunch in a sector I’m enthusiastic about) than someone who spends a couple of years in a business like manner developing a trading system and applying it.”

That’s clearly favouring the option of spending a couple of minutes on a hunch as opposed to years of research and development as being the preferred option, this point I would have thought was abundantly clear from the above quotes.

Also he says this which clinches the points I made earlier:

Its quite simple and requires very little time at all.

There is no need to spend hours drooling over charts, using all kinds of T/A, and F/A to justify why you bought what you bought.

It is as simple as a buy and hold approach, with no attention needed.

…You see, you can make extreme amounts of money with no effort required at all.

…So it really does pose the question are most of us just simply wasting time mulling over hours and hours of charts, glued to a computer screen etc, when the majority of us could just buy almost any mining stock in the midst of a mining boom, and make squillions, just by being patient.

As for the fascile insult about “application of analysis”, this is testament to the belligerent and capricious attitude of the author and barely warrants a mention. Ironically it is the author who is obsessed with being “right”, otherwise why goad others all the time and not just get on with making profits?


P.S. I think the point in this link was also not considered:

http://traderfeed.blogspot.com/2006/12/three-pervasive-myths-of-trading.html

 

[prawn_86]

i think that in a bull market a buy-and-hold strtegy is an excellent idea.

although i do suggest research first, rather than randomly picking a stock as STC has implied, in current market conditions you see heaps of stocks which are continually pushing new highs.

selling out to make back your original investement once a stock has doubled is a way of ensuring against the possibility of a sudden drop. (insert all those sayings about money in the bank, dont make money untill you sell etc etc)

the other aspect, imo, is that many people actually enjoy trading. i for one love analysing stocks, more on a fundamental than technical level. and due to the fact that i do not rely on it for a living, the only money i have invested, is money i can ultimately afford to lose, not that im trying too! that is why i have a mixture of short and long term stocks.

you should do things that you enjoy in life, and if trading is one of them so be it.

 

[tech/a]

Moggie

You certainly do have a point with the first 2 quotes I have to agree.

So it really does pose the question are most of us just simply wasting time mulling over hours and hours of charts, glued to a computer screen etc, when the majority of us could just buy almost any mining stock in the midst of a mining boom, and make squillions, just by being patient

But he really does have a point here I feel as MULLING is what most do with analysis --- nothing more and nothing less.

Ironically it is the author who is obsessed with being “right”, otherwise why goad others all the time and not just get on with making profits?

WHY??
To discover the essence of the application of wisdom presented.
Not only isolated to yourself.
There are many who----"Talk the Talk but-----"

These are not personal vendetta's but genuine requests.

Every see me "Goad" (your description) Frankee?,Radge?---both are application in motion.
There are many others who both talk and walk.

Relax Moggie you have tremendous knowledge thats obvious.

 

[wavepicker]

IMO it really depends what your goals and what you really want from the market. Sure great buy and hold trades are possible. I have been lucky enough to be on the receiving end in the past.

It's not a problem getting into the market and holding, especially a bullish one, where most get unstuck and lose out is not knowing when to get out. Most pundits who are lucky enough to succesfully get out at the best time still end up losing out in the long term because they think making $$$ is easy in the market and that they can do this consistantly. The then re enter the market assuming as stock is a "bargain" because it has pulled back. This strategy of buying the dips continues to pay dividends until the next time they do it they might double up, and end catching a 3rd wave to the downside and get cleaned out.

For me the most important thing is to have a methodology that is to be CONSISTANT. This tied in with a suitable money management system. You can throw the arbitrary stops to the dogs, one has to be in tune with the market, recognize it's and flows, move with them and adjust stops accordingly. There is no easy $$ in the market, anyone who thinks there is will have some real big surprises. It takes work and effort to make CONSISTANT winning trades, just like any other professional job and every dollar you make you richly deserve

Cheers

 

[Magdoran]

Moggie

You certainly do have a point with the first 2 quotes I have to agree.



But he really does have a point here I feel as MULLING is what most do with analysis --- nothing more and nothing less.




WHY??
To discover the essence of the application of wisdom presented.
Not only isolated to yourself.
There are many who----"Talk the Talk but-----"

These are not personal vendetta's but genuine requests.

Every see me "Goad" (your description) Frankee?,Radge?---both are application in motion.
There are many others who both talk and walk.

Relax Moggie you have tremendous knowledge thats obvious.

I love it when you waddle out of that “retaining wall” sand pit of yours and start quacking away.

You really need to get something fundamental through your own head. You, (like the rest of us mere mortals) aren’t objective. To repeat a comment I made a long time ago on another thread, and this is as relevant today as it was then:

There’s no point in discussing anything with you tech:

You’ve got blinkers welded so firmly to your head you couldn’t even see the flash from a 10 trillion kiloton nuclear bomb going off beside you, let alone learn how to spell or punctuate.

(Re: $5000 to $50000 in two years - let the odyssey begin)

Hence I don't know if you have ulterior motives for all your comments, but when it comes to Nick for example, you’re hardly likely to rattle his cage when your techtrader section lives on his site – it doesn’t take a genius to work that out.

What your cosy relationship is with Frank eludes me, but your obvious bias reveals itself from time to time, and the obvious absence of critical thinking or balance in this case.

It would not surprise me if others perceive your somewhat inconsistent appraisal - launching nuclear strikes on some posters, and smooching with others, often without a scintilla of intellectual reason for it, - so one is left to conclude many of your comments are purely personal and arbitrary. (Which is fine by me by the way, but shouldn’t be dressed up as being something “objective” when it’s patently SUBJECTIVE).

 

[dlineinvestor]

Trading, at first glance, seems trivially simple. "Buy low sell high".

Even having done this full time for over a year, I'm still learning what I don't know and will be for years to come