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Turning 5,000 dollars into 50,000 dollars

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insider said:
I'm not a trader... I'm an investor who watches the market very closely and If I have to I will push the eject button... there hasn't been any reason to yet...

I'm fortunate to have invested in MTN because when I did I only knew a fraction of what I know of them... I had plans to knock them off after $3.00 but It's because of my research IMO it'd be better to hold... It's works and gives strong results... When the market changes then so will my strategy...
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That's EXACTLY why you need a trading plan for your "strategy".

Hell, if you like, you can call it an "investing" plan, works both way to me. :)

You invested in MTN, but surely you have some sort of "criterias" for investing in such company. This is when to buy plan.

Now how long were you planning to hold, and what are your exit criterias? You planned to exit at $3.00 but it hasn't reached that point yet. What happens if it doesn't reach it? What happens if it dropped back below your original purchase value? You need to have a plan to prepare for all this and you just cannot ASSUME anything wouldn't happen just because your research skills into the fundamentals of the company tell you so. Anything could happen and there is NO EXCUSES not to plan ahead.

From what you have written so far, you only barely covered both concepts above and almost did it subconciously. (i.e. I will buy this share, hold it until $3.00 and get out if something happens.)

You completely ignored your position sizing, that is, how much of your capital are you willing to risk to get that $3.00 price share profit. Are you willing to risk 50% of your $5000? 20%? 10%?

What about the next "investment" you are going to make? Are you going to use the same strategy or going to change it? Are you sure the same strategy will work in the next 20 investments? Have you tested such strategies on paper before you commit your real money into it?

Do you think you can assume that your next 20 investments will be ALL profitable, that is, you exit at a profit? Are you prepared to accept a losing investment if your research fails? And if so, how much lost per investment? How many lost in a row can you accept before you lose your entire investment capital? Yes, you can change your strategy if a particular strategy does not work, but are you sure your next strategy is going to work, and wouldn't produce a lost too?

In my opinion, all investors should learn all the basic concept of successful trading, even if they admit they are just "long term investors". That's why I said there is no such thing as long term investor, unless you plan to invest like Warren Buffet where he almost never sell anything he brought.

Like I said, sell your holdings now and be very very happy with the profit you've just made. At least like A/tech said, you did a great job at letting profit run. Most "investors/traders" would have been satisfied and exit with a 100% profit on their holdings.
 
Insider - Temjin has just summarised just about all the requirements needed to trade successfully.
You would be wise to take note of these.
 
nizar said:
Insider - Temjin has just summarised just about all the requirements needed to trade successfully.
You would be wise to take note of these.
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He's not a trader, Nizar. He's an investor:confused: , but i agree he should protect his investment with a stop at least....at the breakeven point as a minimum. I'd probably sell and get th 5k back. Anyway good on ya Insider.

Just curious, CGT is paid at marginal rate, Insider wouldn't have much CGT to pay would he?

Cheers,
 
Temjin said:
That's EXACTLY why you need a trading plan for your "strategy".

Hell, if you like, you can call it an "investing" plan, works both way to me. :)

You invested in MTN, but surely you have some sort of "criterias" for investing in such company. This is when to buy plan.

Now how long were you planning to hold, and what are your exit criterias? You planned to exit at $3.00 but it hasn't reached that point yet. What happens if it doesn't reach it? What happens if it dropped back below your original purchase value? You need to have a plan to prepare for all this and you just cannot ASSUME anything wouldn't happen just because your research skills into the fundamentals of the company tell you so. Anything could happen and there is NO EXCUSES not to plan ahead.

From what you have written so far, you only barely covered both concepts above and almost did it subconciously. (i.e. I will buy this share, hold it until $3.00 and get out if something happens.)

You completely ignored your position sizing, that is, how much of your capital are you willing to risk to get that $3.00 price share profit. Are you willing to risk 50% of your $5000? 20%? 10%?

What about the next "investment" you are going to make? Are you going to use the same strategy or going to change it? Are you sure the same strategy will work in the next 20 investments? Have you tested such strategies on paper before you commit your real money into it?

Do you think you can assume that your next 20 investments will be ALL profitable, that is, you exit at a profit? Are you prepared to accept a losing investment if your research fails? And if so, how much lost per investment? How many lost in a row can you accept before you lose your entire investment capital? Yes, you can change your strategy if a particular strategy does not work, but are you sure your next strategy is going to work, and wouldn't produce a lost too?

In my opinion, all investors should learn all the basic concept of successful trading, even if they admit they are just "long term investors". That's why I said there is no such thing as long term investor, unless you plan to invest like Warren Buffet where he almost never sell anything he brought.

Like I said, sell your holdings now and be very very happy with the profit you've just made. At least like A/tech said, you did a great job at letting profit run. Most "investors/traders" would have been satisfied and exit with a 100% profit on their holdings.
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Thanks a lot Temjin for your efforts in posting... This is what the purpose of this thread was... With the initial 5000 dollar investment I was planning to buy and hold until I'd stick my head out of the ground because of my frustration with my losses to EXT (I hate those people... Bloody thieves)... essentially my capital was diminishing and 5000 dollars was where I started again... I followed suggestions from some people from the forum and researched DYL... I was happy with them as some results were due... I should've let profits run because they went to 45 cents when but I sold them at 27.5 cents I think... I was happy to get my money back plus more after EXT...

Understand $5,000 really isn't much to lose... and it's not enough to diversify IMO. (A bit of luck but I made the mistake of not letting Profits run again)... I've done this mistake with AGS, UXA, and others...

after selling DYL I bought MTN... I had about $9200... I bought 9000 shares and kept $200 aside so in case my portfolio fell by 200 I 'd sell and still have 9000... I was confident in MTN... I researched more... the price went up... I was thinking of jumping onto UXA and I did research on UXA and I was not impressed and I put them in the pretenders list... And I held ever since because they are consistent and extremely Cheap!!!

I research other companies on the side in the mean time incase MTN goes belly up so I always have a backup... PNN, EME, CAV and WMT are my picks other than MTN... They are all having amazing gains...

I hold onto MTN more so for tax reasons and the fact they're good.. anyway I gotta go ciao
 
CanOz said:
He's not a trader, Nizar. He's an investor:confused: , but i agree he should protect his investment with a stop at least....at the breakeven point as a minimum. I'd probably sell and get th 5k back. Anyway good on ya Insider.

Just curious, CGT is paid at marginal rate, Insider wouldn't have much CGT to pay would he?

Cheers,
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Can,

Investor/trader it doesnt matter.
Its fine if you pick your entries from fundamental analysis, but that doesnt mean you should completely ignore position sizing and exits.

Those that look at fundamentals for entries but have stringent risk/money management and have exits PROVEN to have worked over time, do very well in the markets, actually not much better than random entry, but still, because of their money management and exits, they outperform big time.
 
nizar said:
Can,

Investor/trader it doesnt matter.
Its fine if you pick your entries from fundamental analysis, but that doesnt mean you should completely ignore position sizing and exits.

Those that look at fundamentals for entries but have stringent risk/money management and have exits PROVEN to have worked over time, do very well in the markets, actually not much better than random entry, but still, because of their money management and exits, they outperform big time.
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Agree totally. Many i believe, call themselves an 'investor' after failing to do the above.

Cheers,
 
Let it run, not worth selling these uranium stocks as they always make new 52 week highs. Not to mention the rerating to actual production is quite high(paladin?)
 
nizar said:
Those that look at fundamentals for entries but have stringent risk/money management and have exits PROVEN to have worked over time, do very well in the markets, actually not much better than random entry, but still, because of their money management and exits, they outperform big time.
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What's the evidence? Most studies I've seen suggest active management, ceteris paribus, decreases returns.
 
stoxclimber said:
What's the evidence? Most studies I've seen suggest active management, ceteris paribus, decreases returns.
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You are mistakening "active management" from traditional managed funds verse money management theories in system trading.

Traditional managed funds cannot and will NEVER be able to apply the same type of money management techniques that all successful traders can freely execute. This is largely due to the ways their money are managed where they almost always are in long positions, are in large amount, almost always 100% invested and cannot liquidate their positions as easily as individual traders. Private traders are far more flexible when it comes to applying effective money management and they do not have any obligations to the management levels.

You will get better ideas when you read more into the topic of "money management" for traders.



Insider,

Glad you took the time to read them and do hope you learn something from it.

I really do not want to pick out individual parts of your story and go through some of the common mistakes that most investors/traders do. But just by reading it, it's obvious you never had a plan in place when you decide to pursue "investing" in all these cheap, speculative stocks.

My final advice is to STOP what you are doing all together now! Stop trying to make back the profit you've lost before and ask yourself if you are REALLY going to commit yourself to share trading. If you are treating it as a hobby, then you better get out now as it is probably one of the most expensive and painful hobby in the world.

If you are committed, then please go and grab a copy of Dr. Van Tharp's Trade Your Way To Financial Freedom and read it through several times. After that, then rethink what you have done in the past and you will get why I am trying to save you here.


Maybe I should ask myself why I am bothering posting all these stuff anyway? It's not my money. :rolleyes: heh Good luck anyway.
 
Temjin said:
Maybe I should ask myself why I am bothering posting all these stuff anyway? It's not my money. :rolleyes: heh Good luck anyway.
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Temjin

Don't have reservations about trying to help someone else. That should be part of what a forum is about. You've offered Insider really good advice which hopefully he will consider.

Insider
Remember how your spirits sank when MTN dropped significantly with many others amongst the recent correction. Perhaps it might be good to think about how you'd be feeling now if it had not recovered?
Sometimes we "fall in love" with stocks to the extent that we simply can't imagine them letting us down.

Good luck and good management

Julia
 
This has been a greatly entertaining and revealing thread. Don't buy a motorbike and move out of home - start a new thread titled "turning 50,000 dollars into 500,000 dollars"...:eek:
 
misterS said:
This has been a greatly entertaining and revealing thread. Don't buy a motorbike and move out of home - start a new thread titled "turning 50,000 dollars into 500,000 dollars"...:eek:
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Tend to agree.
It would be fun to watch.
 
Julia said:
Temjin

Don't have reservations about trying to help someone else. That should be part of what a forum is about. You've offered Insider really good advice which hopefully he will consider.


Julia
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I agree with you Julia. I've also got a lot from your posts Temjin.

Thanks
 
...and let's face it the guy is currently red-hot - even picked ppn in the tipping comp.

But don't let me start cheer-squadding Insider into blowing what is now a sizeable chunk of cash that resulted from what the experienced people consider a pretty unusual result.

You seem pretty switched-on, but share market success can have exactly that lovely gambling-bug kind of effect on otherwise sensible people - it isn't just mugs - that any gambling has. I'm sure many will protest that for them it is nigh on a science, and not gambling at all, the way they do it, but it generally engages the same kind of response.

As you are a student, maybe you should see what kind of work in the fund game is open to you (unless you are studying for a Doctorate of Divinity) Sure as hell, this thread would make a fair CV for a start.
 
Julia said:
Temjin

Don't have reservations about trying to help someone else. That should be part of what a forum is about. You've offered Insider really good advice which hopefully he will consider.

Insider
Remember how your spirits sank when MTN dropped significantly with many others amongst the recent correction. Perhaps it might be good to think about how you'd be feeling now if it had not recovered?
Sometimes we "fall in love" with stocks to the extent that we simply can't imagine them letting us down.

Good luck and good management

Julia
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Thanks Julia. :) I think the reasons why I am more concerned about this post is I want to prevent others from being hurt in the market by thinking they could do the same too and attempt to follow insider's "success" in his one off gamble style trading.

Very good comment on the psychology part too. Alot of people are not aware of how they could serious psychology could impair one's ability to trade/invest.

Rule of the day, never have loyalty for any stocks you invest/trade in. The price of any stock is not NEVER driven completely by the fundamentals of the company. Short term, or even long term movement of a stock price is driven by the overall psychology of the market in which no single person has control or predict. Mass greed/fear can pull fundamentals out of the window all together in the short term. And because of this fear, stock prices can drop much faster than it can go up regardless of how good the company's fundamentals are.


nomore4s said:
I agree with you Julia. I've also got a lot from your posts Temjin.

Thanks
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Thanks too, glad you took the time to read it.


stoxclimber said:
Is he a system trader? I rest my case.
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Does it matter?
 
:bananasmi :bananasmi :bananasmi :bananasmi :bananasmi

Job done insider

Best of luck holding for CGT relief in Nov.
Congrats
 
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