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~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 15 June 2006 Table of Contents (1) Quote on Persistence (one of my favourites) (2) Article - Let Your Profits Run (3) Traders and Investors Expo - Melbourne (16/17 June) (4) Coming Soon ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Stay up to date with all that is happening at Trading Plan, by subscribing to our 'Trading Blog' (no email address necessary). I am continually adding content and every update of this site is announced here, including minor content updates, page additions, and product releases. So stay plugged in by subscribing to this site's RSS feed. Copy and paste the address below into your RSS reader to receive the Trading Plan RSS feed... http://www.trading-plan.com/Trading-Plan.xml Not sure what RSS is? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ -- 1 -- Quote on Persistence "Nothing in the world can take the place of Persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan 'Press On' has solved and always will solve the problems of the human race." Calvin Coolidge (1872 - 1933). -- 2 -- Let your Profits Run I have spoken to several traders groups over the last 12 months and I always comment about how strong the Australian equities market has been. Notwithstanding the falls over the last month, the market has performed considerably well with many companies recording very significant price gains. I never quote exact numbers to them but for the purposes of this text, I will give you some idea - to be precise, a quick scan of market data will tell you that over the last 11 months or so, no less than 190 companies have enjoyed a capital gain of in excess of 100% (from a market of approx 1700 companies). 23 of those 190 or so had gains of more than 400%. Staggering numbers by anyone's standards. Now the reason why I quote these numbers is to illustrate a point. It is amazing how many people are very intrigued to hear me quote such staggering numbers - understandably so. Interestingly, there is always someone who will ask about how they find these types of companies that experience such staggering growth. "Stuart, excuse me, I was wondering how do I find those companies?", someone asks. The rest of the gathering normally laugh quietly thinking, 'yes, I would like to know that too'. I admit that sometimes I have to prompt them to ask, but once I do, the question comes pretty quickly :-) My answer is simple however, and probably not what they were after. The reality is you don't find them. You really can't. I guess people want me to tell them a specific mix of indicators (with parameters set) and chart patterns that will find the perfect setup for them. When you buy anything, you rarely have little idea of where it is going, let alone knowing it is going to appreciate 100% over the next X months. This is where the focus of many people is wrong. Too many traders focus on the wrong things. Too many traders focus on the entry and not enough on the exits. I go on to add that one of the most important trading rules is to let your profits run. It is widely accepted that cutting losses is hard however I believe that letting your profits run is certainly not easy. This is why having a strict, mechanical approach to trailing the price with our exit is very advantageous. It does as much as it can to reducing the emotions associated with the decision. Back to the group of traders, rather than asking about what indicators or chart patterns they could use to identify a trading opportunity with such potential, they should be asking about what type of exit strategy they could use to ensure they are in the trade long enough to enjoy such a gain, and therefore to let their profit run. Furthermore, once they have asked that question, then they could ask how they prepare themselves mentally to stay in with a trade for such an extended period of time when it is going so well, and to resist the temptation to sell and realise the profit.In this particular scenario, these are the keys to success. So focus on the right things and in this case, do everything you can and provide your trade every opportunity, to let your profits run. Then reward yourself when you do.
-- 3 -- Trader's Expo - Melbourne (16/17 June) The Traders and Investors Expo makes its next stop in Melbourne this weekend on 16 and 17 June 2006. The expo will be held at the Melbourne Exhibition Centre, 2 Clarendon Street, Southbank. Entry is $15. I will be presenting a 1 hour seminar on both days and my topic will be 'Developing your Trading Plan'. If you can't make it to either presentation (they are $35), then I will also be at the Trader's Journal booth during the expo. Please come and say hello if you are around, as I would love the opportunity to have a chat with you. The official website is http://www.tradersexpo.com.au/traders&investors/mel_home.htm -- 4 -- Coming Soon In the upcoming weeks, the technical analysis section is going to be developed so keep an eye out for that. This new section is going to include numerous parts but will start with the basics of charts and trends and then move onto chart patterns and indicators. If there is anything you want to learn about specifically in technical analysis, do not hesitate to contact me. Contact details are at http://www.trading-plan.com/contact_us.html ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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