This is the Second Part in a Blog Series of just the pair, and you can read Part 1 here:
http://wheeliedealer.weebly.com/blog/the-diminishing-problem-part-1-of-2 Averaging Down and what it means for The Diminishing Problem As we have established, when you have a Stock in your Portfolio which is going ‘wrong’ and the Share Price is on the slide, it is a ‘Diminishing Problem’ in that as it drops the impact on your Overall Portfolio reduces. Now the opposite effect is in play when you have a Good Stock which is going up - as it grows in Relative Size as a Proportion of your Portfolio, then the Positive Impact increases over time. These combined effects are extremely useful and another of the rare ‘Free Lunches’ that the Stockmarket gives us.
2 Comments
This is yet another Blog that I have had conceptually parked in the WheelieBrain for perhaps even as much as a few Years but I never seemed to get around to writing it until now. It is without doubt part of the infamous ‘Stoploss Debate’ and funnily enough a couple of Weeks ago I innocently put out a Tweet saying that I had decided to write a Draft on this very subject over the coming Weekend and simply by sending out that Tweet I then sparked off a massive discussion on Twitter about whether or not to use Stoplosses and we even got a Poll going where something like 58% or so did not use them (bear in mind this was a Self-Selecting Poll though and most of my Followers are probably more at the ‘Investor‘ end of things than the ‘Trader‘ end).
Anyway, Stoplosses are the subject of many more debates to come I am sure and no doubt I will be writing in my Blogs about them for many Years to come and I have already indulged in this subject area many a time in previous Blogs and I will include some Links at the bottom of Part 2 to some of those earlier scribblings.
I probably didn’t hear it - I have had some sort of problem with my Left Ear for a while and I have been shoving that Earex Olive Oil stuff in it for about a Week and now I am at the stage where I am still partially deaf but I am not sure if the Ear is the problem or if it is because it is full of Oil !! I think it is time to stop pouring Mazola into my lughole.
Stoplosses are such a funny subject area - there is nothing like it to provoke a heated and busy discussion on Twitter and I merely mentioned that I was thinking of writing a Blog related to this and it kicked off a torrent of Tweets on Friday !! Anyway, I have produced a decent Draft of the Blog and I will mention that more in a bit.
This is the Final Part of a 3 Blog Series produced by @vilage_idoit with a focus on Short Term Trading and how to make Money consistently from Junky AIM Stocks - the sort of stuff you find in the WheelieBin. If you haven’t read Parts 1 and 2 then you can find them here:
http://wheeliedealer.weebly.com/blog/guest-blog-on-short-term-trading-by-michael-vilage_idoit-part-2-of-3 http://wheeliedealer.weebly.com/blog/guest-blog-on-short-term-trading-by-michael-vilage_idoit-part-1-of-3 Please note at the time of publishing this Guest Blog on the 17th August 2018 the Books that are under the ‘Recommended Reading’ bit of this Blog are not yet in Wheelie’s Bookshop - my intention is to shove them in their over the next few days. However, all the Books he mentions in the Bibliography are in the Bookshop. Thanks again to Michael for producing this excellent work. Cheers, WD.
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.
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). |
'Educational' WheelieBlogsWelcome to my Educational Blog Page - I have another 'Stocks & Markets' Blog Page which you can access via a Button on the top of the Homepage. Archives
January 2021
Categories
All
Please see the Full Range of Book Ideas in Wheelie's Bookshop.
|