This is the Second Part of a 3 Blog Series produced by @vilage_idoit with a focus on Short Term Trading and how to make Money consistently from those Junky AIM Stocks that we all know and hate. If you haven’t read Part 1 then you can find it here, where you will also find a summary of Michael‘s experience and capabilities:
http://wheeliedealer.weebly.com/blog/guest-blog-on-short-term-trading-by-michael-vilage_idoit-part-1-of-3 This Part really starts to get into the ‘Nuts & Bolts’ of how he does things and once again a huge THANK YOU to Michael for providing this excellent text. Cheers, WD.
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My friend Michael (@vilage_idoit) is a highly skilful and successful Short Term Trader who fights with the Markets on a daily basis to snatch Profits from various situations and often this is around Buying and Selling those horrible Junky, WheelieBin-type, AIM Stocks. Quite often he would only be holding a Position for a few hours or so and I don’t think he holds a Position for many Days although he probably does this occasionally. This is not for the faint hearted and it takes a lot of ability to do it, but if you have the dedication and focus that Michael has then it can be done. One of the most amazing things is that he has only been involved in the Markets this way for a few years but the speed with which he has created an Approach which works and generates a lot of Cash for him shows just how exceptional he is. This is borne out by the fact that Michael does not ‘work’ and has funded his own Living Expenses etc. for several Years now. Bear in mind that I think he is still under 30 as well (ok, he looks young !!).
Even if you have very blunt Eyes, you should have noticed that this is Part 3 of a Blog Series and if you would like to read the other 2 Parts first (which of course is what I would suggest you do !!), then you can find them at these links:
http://wheeliedealer.weebly.com/blog/invest-like-a-shark-part-1-of-3 http://wheeliedealer.weebly.com/blog/invest-like-a-shark-part-2-of-3 Chapter 15 is ‘Digital Dangers’ and goes on about the problems that easy access to Trading Platforms and Bulletin Boards and Social Media etc. can create for you. The message is to understand the drawbacks of such Tools (they can have benefits but these are easily swamped by the downsides) and to be fully in control and not let them take your life over etc. Above all when using any Online Platform it is vital to avoid ‘Noise’ and to be very disciplined about what you are reading and exposing yourself to - it is far too easy to get influenced by stuff that you really should not be reading anyway, and of course you can waste immense amounts of time which you could be using in far more effective ways. Stay disciplined and ‘Cut out the Noise’.
In this Blog Series I am reviewing Robbie Burns, The Naked Trader’s, latest Book, ‘Trade like a Shark’. To try to bring this to life I have gone through the Book picking out some important chunks of Text and then giving my view of what it says and what makes it significant. If you want a copy of the Book you can find it in ‘Wheelie’s Bookshop’ and you can find Part 1 of the Blogs here:
http://wheeliedealer.weebly.com/blog/invest-like-a-shark-part-1-of-3 Chapter 4 is about ‘Trading in Down Markets’ and Robbie particularly talks about Shorting Indexes as a Hedge: ‘The same is needed in trading. If you run it as a business you need to use all the tools at your disposal. And that should include shorting. When Shares tumble, selling up is very costly. Shorting allows you to hold onto your shares, waiting for the turnaround, while making money from the markets going down.’ You know I won’t be arguing with that !! The Book has quite a bit on this and of course it is worth bearing in mind that recently the FTSE100 has not been so useful as a Hedge due to how it moves with the gyrations of the Pound since Brexit and its uneven Weighting which gives the Top 10 Stocks considerable force over how the Index moves. Regular Readers will know that I talk about this sort of thing quite a bit in my Weekend Blogs.
Over the last few Months I have read Robbie Burns, The Naked Trader’s, latest Book ‘Trade like a Shark’ several times. This is supposed to be Robbie’s take on the Psychology of Trading/Investing and to a large extent it is precisely this - although I would add that it is much, much, more than just that.
The first time I read ‘Shark’ I must have thought it was pretty good - otherwise I would not have bothered to read it twice. In fact, I simply can’t remember my initial thoughts but after reading it a second time I was very much of the view that this Book was really something quite special, and I would go so far as to say this is the best thing Robbie has yet written. Normally after reading a Book that I think is significant I will produce a Review of it and shove that with a Link to the Book on ‘Wheelie’s Bookshop’ page; but this time I felt this Book was so excellent it deserved more than that and the structure that fortunately came to my mind was to go through the Book for a third time and to use a Highlighter Pen (once I had actually remembered to buy the rather essential item from Tesco) to mark the bits of text that really stood out to me and then I would type them into a Blog and put some comments with my own view of the point the text was making.
If you are even remotely sharp in the eye department, you will have noticed that this is Part 2. If you haven’t read Part 1 yet, you can find it here:
http://wheeliedealer.weebly.com/blog/the-power-of-patience-the-importance-of-being-idle-part-1-of-2 In Part 1 I was partly going on about where my own reserves of Patience come from and I am pretty sure being a Paraplegic Wheelchair User forces immense Patience upon me. I wasn’t going to say any more on the subject but if you follow me on the Tweets then you might have noticed that I have been doing some Sanding and Painting work on my BMW Z3 to sort out some rusty Aluminium on the leading edge of the Hood - anyway, I have to tell you this because it’s a great example of where Patience is drummed into me and also it is ironically quite funny !! (in a Sod’s Law kind of manner).
It’s a Saturday Night and needless to say there is nothing bearable to watch on TV, so I thought I could spend an hour or so creating a Draft of a new Blog Idea I have had kicking around for a while. As it played out, I looked through my list of possible Blogs to make a start on and nothing was really leaping out at me although I remembered an idea I had recently to do one about the importance of being Patient - and because it is something I profoundly think could help many Readers hugely I decided it would be quite an ‘exciting’ thing to write (that gives you an idea of how dull the garbage on the TV tonight is !!).
I am bemoaning the TV there but in truth I must just sing the praises of that ‘James May’s Toy Stories’ series which was first shown on the Beeb perhaps 3 years ago or around that but it has been recently repeated on something like the Discovery Channel and tonight while I was troffing my Curry they had the one where his team of genius Engineers (basically a chap called ‘Simmy’ really) build a Motorbike and Sidecar out of Meccano and then attempt to ‘race’ it around the Isle of Man TT course (I say “race”, but in truth it only does something like 7 mph). This is all relevant because the ‘Skill’ of Patience is written all over this utterly insane challenge and obviously applies to the painstaking and presumably utterly tedious task of creating the Bike out of thousands of tiny pieces of Meccano and their associated tiny Nuts & Bolts and Washers and stuff but also because so much of it had to be machined to make items like a Final Drive Chain and an incredibly complex Wheel (well, 3 of them in fact).
I often get ideas for Blogs from various chats on Twitter and this one has come about in this way, and it also has the added bonus of being sort of linked to the recent lengthy Blog Series I wrote on ‘Wheelie’s New Improved Index Trading System’.
We were having a debate about what drives Indexes in terms of Price Rises and Falls etc. (I think it was with @Old_Man_Trading who is really hot on the TA stuff and well worth following on the Tweetster) and I put forth the idea that to a large extent we cannot know what is driving them as there are simply too many factors involved. To illustrate this, let me start off by listing things that might be drivers, and note they can probably be broken down into a few Headings:
This is the Final Bit of a Series of Blogs on this Subject which have been very highly praised (up until this one anyway which might be a total let-down) and if you have not read the others there are links to them here:
http://wheeliedealer.weebly.com/blog/evolution-of-an-investor-part-1-of-4 http://wheeliedealer.weebly.com/blog/evolution-of-an-investor-part-2-of-4 http://wheeliedealer.weebly.com/blog/evolution-of-an-investor-part-3-of-5 http://wheeliedealer.weebly.com/blog/evolution-of-an-investor-part-4-of-5 Stage 6 - 2018 Onwards - Where next? I can only write this Section with the thinking I currently have with regards to how my future Learning is going to pan out and to focus on the elements that I am putting my efforts into as we speak or things that I have made a conscious decision to address in the near future. As Readers may have realised from what I have written so far in this Blog Series, there have been several times in my Investing Career where I have flatlined or been unable to instantly find a new direction - but as things turned out something always came up and re-invigorated my motivation and drive to keep on Learning and, more importantly, improving. With what I have just written in mind, here is my current thinking on where my Learning Efforts are going to be focused in coming years, but I am sure the reality will diverge from this somewhat:
Stage 5 - 2015 to 2018 - Well into the Bull Run
Here comes The WheelieDealer. More sophisticated Trading Tricks and focus on Psychology. Enforced Discipline.
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