- 20 Most Common Trading Mistakes – new book release
- Current market update
- How did you perform in the market over the last financial year
- My financial year trading results including my best and worst trade for the year
- Watch my trade continue to progress
| 20 Most Common Trading Mistakes (Available 30 July) |
A trading buddy of mine, Kel Butcher, has just released his second book, that includes an interview with me and 17 other world renowned traders. It reveals market mishaps from some of the biggest names in trading that every trader can learn from. Below is an overview of what the book is about:
Trading is portrayed as being a life of glamour, fast cars, leisure and luxury. That is until you start and then you discover that it can be brutally difficult. If you play the trading game you are going to make mistakes – maybe even some like these:
- agonising endlessly over when to enter or exit a trade
- trading like a maverick, risking too much of your capital
- beating yourself up when a trade goes against you
- losing $1 million in a single trade
- clicking the “buy” instead of “sell”
- buying 10,000 units when you only meant to purchase 1,000
- failing to take the time to document a trading plan
You can pre-order your copy now so that you receive it as soon as it is released, simply click on this web link:
| Market Update |
The market has been a mixed bag of late and has been trending sideways for the past few months. It has developed a short-term support level at 3700 and has tried to surpass the 4000 point level a few times now, but has failed to remain above it. It closed Friday right on 4000. If it can take out its June highs this will be a good sign, but if it fails and falls back below 3700 it could then retest its March lows.
Daily chart of the ASX 200 as at 17 July 2009
Over the May/June period I built into some nice long trades with my daily CFD trading system, only to be stopped out of 80% of them by mid June when the market fell back below 4000. I am pleased to say that all these trades were in profit when their exits were hit. It was my first run of profitable trades in a while and I had tightened my stops on many of them when the market surged upwards. Currently I have a few trades still open, but I am no longer fully invested and I am awaiting signs of a market breakout and strong signals from my trading system.
For those traders that are part of my Smart Traders Teleconference program, I will be keeping you updated on all my trading activity over the next couple of months.
| How Did You Perform in the Market Over the 2009 Financial Year? |
It is official, the ASX 200 dropped a total of 24% in value over the 2009 financial year. The US S&P500 dropped a total of 28.5% and the London FTSE100 dropped 22.5% in value. And this will be the result of the return of most people’s superannuation funds.
My goal as a trader is to always outperform the ASX200 index. If this index rises by a set percentage I want to do better than that. As I also short sell I also want to outperform the drop and I am pleased to say that this financial year I did exactly that with a return over 32%*.
My daily trading system undertook a total of 124 trades and here is a run down of my statistics for the 2009 financial year:
- I returned an amazing 32.83%* for the financial year on my total trading capital (this is without margin)
- 45% of my trades were winning trades with an average hold time of 39 days
- 55% of my trades were losing trades with an average hold time of 19 days
- My average win to loss ratio was 2.39, which means my winning trades were more than double my losing trades
- It was 9 key trades that generated my return for the year (4 long trades and 5 short trades)
- In total I lost my full 1% risk on 7 trades (3 of these were long trades and 4 were short trades)
- In total 53 of my trades were long and 71 trades were short in direction
| The Best & the Worst |
Below are charts of my top winning and losing trades over the past financial year:
- My top winning trade in percentage terms was a long trade on Biota (BTA), that generated a 134%* return on the total trade size.
Daily chart of my trade on Biota
- My top winning trade in percentage terms on the short side of the market was on Babcock Brown (BNB), that generated a 77%* return on the total trade size.
Daily chart of my trade on Babcock Brown
- My top losing trade in percentage terms was a long trade on Kagara Zinc (KZL). When I open a trade I position size it with an initial stop loss risking 1% of my total trading capital. I lost my full 1% risk on this trade as the share did not make a higher high since I entered it and my initial stop loss was hit.
Daily chart of my trade on Kagara Zinc
Trading is all about consistency, a clear and concise trading plan with strict money management rules that aim to keep your losses small and your wins large. I share all my trading systems, rules and strategies in my Smart Trading Plan & System Development Course. If you would like to learn more about my trading systems and strategies, this is the course for you.
Click here for more information on this exclusive online course.
The course is also available in a range of training packages, which you can find out more about by visiting this web link: www.smarttrading.com.au/index.php?q=stock-market-training.html
Watch My Trade Continue to Progress
Last newsletter I shared a trade I had recently opened that I labeled XYZ and I will provide details of the share name once I have exited the trade.
I am pleased to tell you that this trade is still open and active. It has not moved much in price, but as my stop loss has not been hit, I am still in the trade and you can view a chart of this current trade below:
Daily chart of XYZ share as at 17 July
Just to summarise, this share came to my attention end of April, early May when my daily system scan started to bring it up, you can see this by the blue arrows that appear in the above chart. The share had clearly been trending down in the past and had fallen to lows around $2, where it found support and trended sideways in a base between $2 and $4. It then moved significantly and broke through the $4 resistance level rising right up to $5 very quickly, which is where my system identified it.
The share then developed a nice support at $4, and when it pulled back and bounced off this level, I entered with a CFD trade on this share on 29 May, buying it at $4.70. The share is currently trading above $5.30 and my stop loss is sitting in profit.
I will continue to keep you updated on its progress in the next newsletter. Until then, enjoy, learn, grow and prosper. The market will be your biggest teacher of all :-)
Cheerio
Justine Pollard
Author, Private Trader & Trading Mentor
'Discover the Smarter way to trade'
www.smarttrading.com.au
justine@smarttrading.com.au
Smart Trading Pty Ltd is a Corporate Authorised Representative of CDM Pacific Pty Ltd AFSL 223682The returns reported are provided for information purposes only. Results of past performance are no guarantee of future returns. No assurance is given that you will incur any profits or losses in your own trading and it should not be assumed that you will experience results comparable to those as reported. Any trade examples listed within this website or associated material are either ficticious or historical and in no way should be interpreted as a recommendation to invest in any particular stock, CFD or investment. Smart Trading Pty Ltd as Authorised Representative No.336312 of CDM Pacific Pty Ltd AFSL 223682 assumes no responsibility for your trading and investment decisions or subsequent results. There is a high degree of risk involved in trading and as such we always recommend that you seek independent financial advice by a licensed professional prior to making any investment decision.
