Forum Archive Index - March 2002

[Sam and Jerry <samjer@xtra.co.nz>]

Amen to your wise words about focusing what one HAS made on a trade, rather 
than what one COULD have made.  In the rather solitary life of an online 
investor, one can easily develope unrealistic unexpectations of what can be 
achieved  ...

Jerry


Phaedrus wrote:

> Enrique,
>         There are many ways to make money in the sharemarket. One is to buy 
>stocks that have good fundamentals. Another is to buy stocks that are in a 
>long-term uptrend, and hold them for as long as the overall trend is up - 
>perhaps for many years. Another method is to attempt to trade the medium-term 
>trends that make up the long-term trend. This is what I do. The objective is 
>to avoid holding the stock if it is in a secondary correction, perhaps with 
>the view of buying back in when the uptrend resumes. Some people trade the 
>short-term trends that make up the medium-term trend. Some people day-trade. 
>Each of these approaches has its own strengths, weaknesses and 
>characteristics, and thus will appeal to different people. For any given 
>stock, and indeed for any given individual, one of these methods will prove 
>the most profitable.
>  Any medium-term sell point, in a stock that is in a long-term uptrend will 
>ALWAYS be surpassed, sooner or later. This does NOT make the signal "wrong". 
>GPG is not the only instance of this happening with charts I have posted. For 
>example in the ELD chart of 14/11/01 I posted a medium-term Sell signal at 21 
>cents - the latest price is 29 cents. The simple trendline based system giving 
>that exit signal had given an entry at 14 cents. That was a 60% profit in 8 
>weeks. I regard that as a very successful trade - not a failure because as it 
>happened I could have made more by holding on. Overall, I am better off 
>following these signals. You can always buy back in. I have in fact done just 
>that with AIA WHS GPG and ELD. You have to be true to your system. Look at how 
>well the same system got you out of stocks like THL VTL WAM CEN NCH TEL etc. 
>All of these stocks were sold at a profit, and all are now below the posted 
>sell point, by a very substantial amount in some cases.
>  I have attached an updated chart of GPG for you. GPG is still in an uptrend, 
>and we now have a new confirmed trendline. I can assure you that I will be 
>selling when this is broken. If the price then continues to climb further, I 
>will still regard this as a good trade. I do not expect to buy at the bottom. 
>I do not expect to sell at the top. I do not expect every trade to be 
>profitable. For my psychological health, I have found it best to focus on what 
>I make in a trade, rather than what I could have made. With hindsight, any 
>trade could be more profitable.
>
>                     Phaedrus.
>
>
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