The problem for many traders isn’t the market’s direction — it’s the strategies they use. I was talking to an aspiring trader recently. Greg is a leasing broker at a large commercial property firm. He’s good at what he does, but his ambition is to be a stock trader.
In today’s offering, first published on 3 August, your editor Jason McIntosh discusses how a simple trading method could better your portfolio.
What do you think is a trader’s greatest risk? Many people will say it’s a market crash. Others believe the danger lies in putting too much money in the wrong stock, or taking advice from the wrong people.
Suppose you knew that the gold price would rise 90% by 2021. This isn’t speculation, it’s a sure thing. How would you use this information to make the most money possible?
The key benefit of short selling is that it can smooth fluctuations in your portfolio. Shorting allows you to potentially profit from falling prices.
Quant Trader has certainly been put to the test. The last year has been especially challenging, with the market experiencing sharp falls in February and October.
I’m going to give you an update on an indicator I use. I call it the ‘Quant 300’, and it helps me identify where the market is within the bull and bear cycle.
When should you lock in a profit? I’ve seen many traders come and go over the years. One of the biggest reasons they fail is due to a poor exit strategy. Their mistake often comes down to cutting profitable trades too early.
I occasionally get emails from people sceptical about algorithmic trading. Some people simply don’t trust the results. But I can tell you this: algorithmic trading works for me.
Pacing — like trading — is not an exact science. I always lose a portion of my group along the way. Some falter on the hills, while others fade in the final few kilometres.