Mistakes

[bullmarket]

hi Snake

This is not useful because it erodes the compounding effect of your invested capital. Sure you pay less tax, but ideally you would want to pay more tax.

I can see where you're coming from with the above comment and I agree in general but, maybe I'm being picky, I can see where in some circumstances like when coming towards the end of the financial year it could be beneficial to sell some poor performing stocks at a loss to reduce the amount of tax payable in that year, especially if you feel there is a low probability the poor performing stocks will recover significantly in the next 12 months. And you always have the option to buy back in if you feel the stock's prospects will improve.

Given that when you sell at a loss you only get back, via a tax payable reduction, your marginal tax rate x the capital loss then the only advantage ,assuming you think the stock will recover within a reasonable time, is that you can reduce your tax payable for that year. Of course, if you then buy back in at the price you sold at a loss and the stock price recovers back to your original purchase price and you then sell, the CGT tax you will then pay will cancel out the tax saved in the previous year. So in this scenario the nett affect solely on tax paid would be zero

In summary tax-loss selling can be beneficial for that year only imo, depending on one's circumstances and objectives, as you could pay more tax in a subsequent year everything else being equal.

cheers

bullmarket

 

[happytrader]

Hmm

...several non-performers. These have now been sold and the only positive to come out of them was the useful capital loss to offset CGT. That's not a good enough reason to have a share!

Maybe Julia knows what a stop loss is for. Looks like a good strategy to me.

Cheers
Happytrader

 

[wayneL]

I didn't say faundamentals or a combination of the two is bad , only that
worrying too much about the charting is. I think that on this forum there
are too many people who invest in a company based on what a chart
says eg ( if there is white candles or a double bottom ) whereas they
should be looking at both , why is the chart going up , if you can't find
a fundamental reason as to why it is going up don't buy , I think charting
is the lazy way out and you can get easily sucker. But a fool and his
money is easily parted.

As Snake says there is a difference between investing and trading and I grant you that investing on the basis of charting alone is lunacy.

Trading is a different matter of course. A trader can be successful by completely ignoring fundamentals, except, as Happytrader points out on the Pride thread, knowing announcement and ex-div dates.

I've traded as my sole living for over 5 years now and wouldn't know a fundamental if it fell out of a packet of cornflakes. (well actually I do, but I ignore them)

Charting Lazy? Hahahah you betcha, I got better things to do than pour over (possibly fraudulent) numbers. (Unless I want to invest of course)

So nobodies ever been suckered by the fundamentals? ROTFLMAO

Enron, HIH, Worldcom, etc etc etc hahahahaha

 

[Julia]

This is not useful because it erodes the compounding effect of your invested capital. Sure you pay less tax, but ideally you would want to pay more tax.

Hi Snake,

I was being somewhat facetious - simply trying to swallow my irritation at having incurred the damn losses! I don't actually set out to achieve losses so that I can minimise tax. That should go without saying. You omitted my following sentence: - "that's not a good reason to have a share" or words to that effect.

Julia

 

[It's Snake Pliskin]

Hi Snake,

I was being somewhat facetious - simply trying to swallow my irritation at having incurred the damn losses! I don't actually set out to achieve losses so that I can minimise tax. That should go without saying. You omitted my following sentence: - "that's not a good reason to have a share" or words to that effect.

Julia

Julia,

I know you don`t do it as a strategy, but I was just pointing out what could be a mistake for some if they continuously operated that way. I omitted the remaining words to keep my message clear - it wasn`t highlighting your example as a mistake, being the mistake thread and all.

I hear a lot of people syaing similar things with regards to tax offsets. Yes it is an offset and if it happens that way take advantage of it.

Regards
Snake

 

[bullmarket]

Hi Wayne

As Snake says there is a difference between investing and trading and I grant you that investing on the basis of charting alone is lunacy.

Trading is a different matter of course. A trader can be successful by completely ignoring fundamentals, except, as Happytrader points out on the Pride thread, knowing announcement and ex-div dates.

I've traded as my sole living for over 5 years now and wouldn't know a fundamental if it fell out of a packet of cornflakes. (well actually I do, but I ignore them)

Charting Lazy? Hahahah you betcha, I got better things to do than pour over (possibly fraudulent) numbers. (Unless I want to invest of course)

So nobodies ever been suckered by the fundamentals? ROTFLMAO

Enron, HIH, Worldcom, etc etc etc hahahahaha

I agree with you regarding the concept that everything else being equal, the shorter the time frame one trades the less important company/economic fundamentals are likely to be to the trader.

But there is no way you're going to convince me that there are not some very wealthy and successful traders out there that look at fundamentals as well as charts

Your references to Enron, HIH, Worldcom I see asa subliminal message supporting the concept of diversification in order to spread and minimise risk for both traders and investors......but it's courses for horses and each to his own.

Good luck with your trading

bullmarket

 

[Mikepaus]

My second mistake is not following my plan - I set stop loss limits prior to placing my order and nearly every time Ive not sold when its hit the stop, Ive lost more,
My biggest mistake when I started was trading or trying to trade without any trading plan.

 

[It's Snake Pliskin]

My second mistake is not following my plan - I set stop loss limits prior to placing my order and nearly every time Ive not sold when its hit the stop, Ive lost more,
My biggest mistake when I started was trading or trying to trade without any trading plan.

You`d be surprised at how many experienced people still don`t follow plans.

I think you have done well to realise you need to follow your plan. It`s a step in the right direction.

 

[Bobby]

As Snake says there is a difference between investing and trading and I grant you that investing on the basis of charting alone is lunacy.

Trading is a different matter of course. A trader can be successful by completely ignoring fundamentals, except, as Happytrader points out on the Pride thread, knowing announcement and ex-div dates.

I've traded as my sole living for over 5 years now and wouldn't know a fundamental if it fell out of a packet of cornflakes. (well actually I do, but I ignore them)

Charting Lazy? Hahahah you betcha, I got better things to do than pour over (possibly fraudulent) numbers. (Unless I want to invest of course)

So nobodies ever been suckered by the fundamentals? ROTFLMAO

Hi Waynel,
Gee I did like your post .
Yep the bull sh*t artists on fundermentals , these grubs have sent so many people broke !.
The only TRUTH is on the chart. (real money traded )
As for indicators Ive found most are 50/50 right or wrong, .
I have now developedl my own , You will never see in a book, WHY? simple if it was out there it would cause slipage to such a degree that it would become like all the others a 50/50 indicators.
I'm doing ok now, few duds at last.
Do you see what I'm saying ? the market Knows what going on !.

Good Luck out there.
Bob.
Hint: True ratios.--'''

 

[wayneL]

Just Checked into this thread, sorry for not responding sooner.

Hi Wayne

.....But there is no way you're going to convince me that there are not some very wealthy and successful traders out there that look at fundamentals as well as charts

I would never try such a thing. Combining ta and fa is obviously an excellent apprach for those who implement it judiciously. I just won't stand for the denigration of a purely technical appraoch. It's not necessary and it's foolish to do so. (NB NOT accusing you of doing so ) The problem is most people misunderstand the use of charts.

Your references to Enron, HIH, Worldcom I see asa subliminal message supporting the concept of diversification in order to spread and minimise risk for both traders and investors......but it's courses for horses and each to his own.

Good luck with your trading

bullmarket

hmmmm if there was a subliminal message, it was so subliminal that I didn't even realise I was doing it. LOL I thought I was giving a rather overt message about the (sometimes) unreliability of company reports

But while we are on the topic. I do support some degree of diversification of the non correlated kind. I may have 0-5 positions open at any one time, but don't like close correlation of open positions. Hence the reason I like to trade a combination of equities and various commodities. FWIW

Cheers

 

[wayneL]

Hi Waynel,
Gee I did like your post .
Yep the bull sh*t artists on fundermentals , these grubs have sent so many people broke !.
The only TRUTH is on the chart. (real money traded )
As for indicators Ive found most are 50/50 right or wrong, .
I have now developedl my own , You will never see in a book, WHY? simple if it was out there it would cause slipage to such a degree that it would become like all the others a 50/50 indicators.
I'm doing ok now, few duds at last.
Do you see what I'm saying ? the market Knows what going on !.

Good for you Agree standard indicators suck without reference to price action/patterns etc. I use them mainly because of the colours. They make my charts rather pretty

Good Luck out there.
Bob.
Hint: True ratios.--'''

Well my interest is piqued, but being a chartist, and apparently lazy, I doubt I'll ever work this out without more clues

Cheers

 

[Bobby]

Good for you Agree standard indicators suck without reference to price action/patterns etc. I use them mainly because of the colours. They make my charts rather pretty



Well my interest is piqued, but being a chartist, and apparently lazy, I doubt I'll ever work this out without more clues

Cheers

Wayne,
I'll may explain it in the future after I get more $$ But private ok mate .
Hey that word piqued (at first I thought that it ment pissed off ) but after looking it up I like the baffled curiosity bit.
I tried to buy crayfish in your town but its top dollar! still got some but paid for it.
Have Fun I'm off to bed its 4.40am -oops
Bob.

 

[nizar]

As Snake says there is a difference between investing and trading and I grant you that investing on the basis of charting alone is lunacy.

Trading is a different matter of course. A trader can be successful by completely ignoring fundamentals, except, as Happytrader points out on the Pride thread, knowing announcement and ex-div dates.

I've traded as my sole living for over 5 years now and wouldn't know a fundamental if it fell out of a packet of cornflakes. (well actually I do, but I ignore them)

Charting Lazy? Hahahah you betcha, I got better things to do than pour over (possibly fraudulent) numbers. (Unless I want to invest of course)

So nobodies ever been suckered by the fundamentals? ROTFLMAO

Hi Waynel,
Gee I did like your post .
Yep the bull sh*t artists on fundermentals , these grubs have sent so many people broke !.
The only TRUTH is on the chart. (real money traded )
As for indicators Ive found most are 50/50 right or wrong, .
I have now developedl my own , You will never see in a book, WHY? simple if it was out there it would cause slipage to such a degree that it would become like all the others a 50/50 indicators.
I'm doing ok now, few duds at last.
Do you see what I'm saying ? the market Knows what going on !.

Good Luck out there.
Bob.
Hint: True ratios.--'''

funny u say that fundamentals are useless... pls explain 2 me how a chart could have predicted THAT fall in bsl or hsp's recent 30% drop??

Hmmm i dont remember peter lynch or warren buffet using charts....

Each method has their methods. Invest on fundamentals, but trade on charting. The more longer term ur looking, the more that fundamentals are important...

 

[happytrader]

Good for you Agree standard indicators suck without reference to price action/patterns etc. I use them mainly because of the colours. They make my charts rather pretty


Cheers

How amazing Wayne!

I'm another apparently lazy trader who likes pretty colours and nice patterns!

Cheers
Happytrader

 

[It's Snake Pliskin]

Wayne,
I'll may explain it in the future after I get more $$ But private ok mate .
Hey that word piqued (at first I thought that it ment pissed off ) but after looking it up I like the baffled curiosity bit.
I tried to buy crayfish in your town but its top dollar! still got some but paid for it.
Have Fun I'm off to bed its 4.40am -oops
Bob.

Bobby,

I`m interested in your ratios.

Snake

 

[Bobby]

Bobby,

I`m interested in your ratios.

Snake

Thanks Snake, but I must keep my mouth shut for now.
I let that drop with a belly full of beer ( stupid me ). :iamwithst

Bob.

 

[mime]

I read an interesting book about mistakes invests made and one was if you have a stock the doing well and one doing poorly which should you sell?

The answer is the one doing poorly because you can use it to reduce your tax while if you sell the one doing well you increase your tax. Aparently most people make this mistake. They hold the crap stock in hope that it will go up again and don't look at the logical choice to make more money.

There was another bit about why majority of people by high and sell low too.

 

[wayneL]

funny u say that fundamentals are useless... pls explain 2 me how a chart could have predicted THAT fall in bsl or hsp's recent 30% drop??

Did I say fundamentals are useless? No! Please don't surreptitiously add to what I say. Fundamentals are paramount for long term investors. You will indeed see me allude to that in my posts. However they are not infallible.

Charts would NOT have predicted BSL's or HSP's drop. And this is why I say say people misunderstand the use of charts. Charts are not for prediction. They are for calculation.

Hmmm i dont remember peter lynch or warren buffet using charts....

Thats cause they're not traders. However you will see the likes of Bill Dunn and Richard Dennis using charts

Each method has their methods. Invest on fundamentals, but trade on charting. The more longer term ur looking, the more that fundamentals are important...

hmmmm I seem to recall saying the exact same thing...............

 

[RichKid]

Good for you .. I use them mainly because of the colours. They make my charts rather pretty

Yes, I second that, they do look like works of art, that's what attracted me to Wayne's charts in the first place way back when on ASF, I didn't know how to read them properly when I first saw them but they sure did have the razzle dazzle factor!! As mentioned at the time I'm sure we're going to have some sort of "chartists' art" fad starting with colourful charts, in fact I saw a Trader Vic's cookbook the other day, what next!?

Back on topic, in terms of mistakes I find that sometimes analyzing a chart afresh after having tracked a stock for awhile helps ID patterns not seen before, so the mistake is often in drawing a line or pattern and forcing the subsequent price action to fit it. If you start as if you'd just seen the stock today you may find some mistakes from previous attempts. Anyway, that's one of my many mistakes.

 

[Smurf1976]

As for indicators Ive found most are 50/50 right or wrong, .
I have now developedl my own , You will never see in a book, WHY? simple if it was out there it would cause slipage to such a degree that it would become like all the others a 50/50 indicators.

I base some of my forex trading on modifying standard indicators. Basically using different settings and also I use combinations of indicators which, according to the experts, say exactly the same thing. Not necessarily they don't, not in practice anyway. Need to use the right indicator for the right purpose.