Position sizing

Capital Management – Position Sizing

Today we look at step three of our series on capital management Determine your risk sizing Identify your stop price or where you will exit if the trade goes against you Calculate your position size Examine the risk/reward profile of the trade before entering Calculating your position size is probably the easiest step in the process, but still a…

Identifying your stop price

Capital Management – Identifying Your Stop Price

This article covers Step 2 in the Capital Management process; Determine your risk sizing Identify your stop price or where you will exit if the trade goes against you Calculate your position size Examine the risk/reward profile of the trade before entering When people first come to the market, the biggest question is ‘which stocks to buy’. So much…

Wolf of Wall street

Crap Cars and Impotence

G20 met at the weekend. The headlines included – “Heads of ECB, BOJ, Fed and Eurozone meet at G20. The Bank of Japan has lessons to offer on dangers of low inflation” There is a potentially interesting development at G20. The usual uselessness of overpaid bureaucrats on a junket appears momentarily to have given way…

Why the Stock Market Exists

This is a chart from the Australian Listed Investment Company Cadence Capital (CODE CDA) – the table is a little out of date but they make the point that out of around 2000 Australian stocks only 700 are profitable and that out of that 700 stocks they consider only around 35 are “good” stocks and…

The ASX 100 Made Simple

Let me make the Australian stock market simple for you. There are over 2000 stocks most of which don’t make a profit. But you don’t need to worry about most of the Australian listed stocks and if you are like most investors one of your best ‘quality’ filters, as brainless as it might be, is…

Capital Management

Capital Management – Risk Sizing

Here are the four steps we have outlined previously regarding Capital Management. Below we will cover the first one in more detail. Determine your risk sizing Identify your stop price or where you will exit if the trade goes against you Calculate your position size Examine the risk/reward profile of the trade before entering Capital management is a crucial element…

Travel Troubles

Travel Troubles

Four teenagers, 4 adults and two ‘geriatrics’ in two campervans for two weeks sounds like a recipe for disaster­ but the problems came not from the travelers but from other directions. Our middle son invited us to join him and his family on a trip to New Zealand.  Our youngest son and his family joined…

The tortoise outpacing the dolphin

Tortoises and Dolphins

A lot of my university friends have landed jobs in the health professions. Doctors, physios, paramedics, osteopaths. Not sure why, it’s just dropped that way. Useful for a 25-year old that’s been thrown off their parent’s private health policy. Muscle injuries, sore backs, medical advice, Hepatitis A, B, C. no problem. They are never short…

Rental Tips

I catch the same train to work as two of my colleagues, we walk around 10min from the station to work and often enjoy a good catch up about how the weekend unfolded, who broke up, who went home together, what wholesome activities we got up to? Farmers market, drive down the coast? It’s a…

Discipline and consistency

Consistency and Discipline

For me, consistency and discipline are two closely related character traits that are essential if you are to be a successful trader (or investor). Trading is about analysing data and making decisions. Each time you buy or sell a financial instrument you are making a decision, informed or otherwise, about the prospects for that particular financial…