KarlR
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- Joined
- May 11, 2013
- Messages
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Hey all,
Just wanted to ask you all about this strategy I've come up with for trading and see what you think,and if it would be worth a try?
Please keep in mind,im pretty new to trading and am just trying to get my footing and figure out my plans.
Anyways after getting into trading and reading books on it,the very basic rules i follow when picking shares is:
-a company thats share price has been steadily rising over the past year or two.
-its dividends and profits have been rising.
-the stock chart shows the price rising in a steady like 45 degree angle with no sudden dips or such.
-make sure it has no bad debt.
-it has a positive outlook and theres no problems with the market it is in.
(obviously theres much more to look for,but those are the very basics i check out.)
oh,and the one rule i read about in my first trading book which i try to always stick by is,aim to sell when you make 30% or sell it if it drops more than 10%(as it will most likely keep falling).
so,from what Ive learned,is if a company is steadily rising,it is likely to keep rising unless something significant happens and if a company's share price drops alot,it is most likely to keep dropping.
Soooo i followed all rules and invested in 4 different company's and heres how my portfolio looks:
Stock A: + 31%
Stock B: - 6%
Stock C: + 13%
Stock D: - 11% (I am getting rid of this as we speak)
Which at first looks like a decent profit,27%...but heres where i screwed up..i completely staggered the amount of money in each company ...stock D had 5000euro in it....Stock A had 500....
Annnnyways!(sorry for rambling guys) but heres the strategy i am thinking of doing in the future..
what if...i picked say...10 company's,who look good under all the rules i stated above and invested an equal amount in each one..lets say 1000?
so now i just follow the rules that i get rid of any shares that drop below 10%,but hold onto the others till they are up about 30%?
So under this strategy id never lose more than 10% on each company,and hopefuly make about 30% on the others..
I know its kinda turning the whole thing into a game of roulette!but if i used this strategy alongside with my other rules,would i be alot more likely to make money?
I mean say invest 1000euro in 10 different companys that all look good,and 7 of them drop to below 10% and only 3 make it to over 30%,youd still make a 20% profit right?and wouldnt it be more like for company whos profits are rising,that they would continue to rise?would it not be realistic to say that at least half of the company's would rise another 30%?
Well thanks for reading guys!!let me know what you think and please go easy on me im only new to trading! 😀
Thanks again!looking forward to hearing your replys!
-Karl
Just wanted to ask you all about this strategy I've come up with for trading and see what you think,and if it would be worth a try?
Please keep in mind,im pretty new to trading and am just trying to get my footing and figure out my plans.
Anyways after getting into trading and reading books on it,the very basic rules i follow when picking shares is:
-a company thats share price has been steadily rising over the past year or two.
-its dividends and profits have been rising.
-the stock chart shows the price rising in a steady like 45 degree angle with no sudden dips or such.
-make sure it has no bad debt.
-it has a positive outlook and theres no problems with the market it is in.
(obviously theres much more to look for,but those are the very basics i check out.)
oh,and the one rule i read about in my first trading book which i try to always stick by is,aim to sell when you make 30% or sell it if it drops more than 10%(as it will most likely keep falling).
so,from what Ive learned,is if a company is steadily rising,it is likely to keep rising unless something significant happens and if a company's share price drops alot,it is most likely to keep dropping.
Soooo i followed all rules and invested in 4 different company's and heres how my portfolio looks:
Stock A: + 31%
Stock B: - 6%
Stock C: + 13%
Stock D: - 11% (I am getting rid of this as we speak)
Which at first looks like a decent profit,27%...but heres where i screwed up..i completely staggered the amount of money in each company ...stock D had 5000euro in it....Stock A had 500....
Annnnyways!(sorry for rambling guys) but heres the strategy i am thinking of doing in the future..
what if...i picked say...10 company's,who look good under all the rules i stated above and invested an equal amount in each one..lets say 1000?
so now i just follow the rules that i get rid of any shares that drop below 10%,but hold onto the others till they are up about 30%?
So under this strategy id never lose more than 10% on each company,and hopefuly make about 30% on the others..
I know its kinda turning the whole thing into a game of roulette!but if i used this strategy alongside with my other rules,would i be alot more likely to make money?
I mean say invest 1000euro in 10 different companys that all look good,and 7 of them drop to below 10% and only 3 make it to over 30%,youd still make a 20% profit right?and wouldnt it be more like for company whos profits are rising,that they would continue to rise?would it not be realistic to say that at least half of the company's would rise another 30%?
Well thanks for reading guys!!let me know what you think and please go easy on me im only new to trading! 😀
Thanks again!looking forward to hearing your replys!
-Karl
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