• Australian (ASX) Stock Market Forum

Hello and welcome to Aussie Stock Forums!

To gain full access you must register. Registration is free and takes only a few seconds to complete.

Already a member? Log in here.

Dump it Here

Discussion in 'Beginner's Lounge' started by Skate, Dec 17, 2018.

sentifi.com

Aussie Stock Forum Sentifi Top themes and market attention on:

  1. Skate

    Skate

    Posts:
    1,367
    Likes Received:
    5,296
    Joined:
    Dec 28, 2013
    You need to know.
    Investing is a ‘risky’ business and if you decide to invest you need to understand both risk and reward. To the average investor the rewards are low but the risk of failure is very high. Unfortunately, it seems that people are more familiar with the expected returns of an investment, and less aware of the risks required to generate those returns. This is like investing with a blindfold on.

    Dividend stock
    To accurately assess risk, you need to understand the payoffs from all possible outcomes, chasing high dividend stock is a strategy worth pursuing as long as you consider your income will be adversely affected if there is a drop in the share price when you sell.

    Skate.
     
  2. Skate

    Skate

    Posts:
    1,367
    Likes Received:
    5,296
    Joined:
    Dec 28, 2013
    Accept & have faith
    Accept what is, let go of what was & have faith in what will be. It doesn’t matter what system you are trading the best way to handle is to just accept it.

    Experience can be dangerous
    Always be sceptical about your own beliefs as experience can create a closed attitude preventing us from seeing when circumstances with our trading position have changed.

    Skate.
     
    JimmyJames80, Trav. and Darc Knight like this.
  3. Skate

    Skate

    Posts:
    1,367
    Likes Received:
    5,296
    Joined:
    Dec 28, 2013
    Worth remembering
    Far more money has been lost buying into bad ideas than missing out on great opportunities.

    Preserve your capital
    Avoiding losses is essential to preserving your capital, which is the prerequisite when trading. Knowing what not to buy is more important than knowing what to buy.

    Fine tuning
    This is where we need to set boundaries, come up with a sturdy trading plan, think in terms of filters, filters for fine tuning. We don’t need more information, we need a better way to think, we need better tools in our trading tool box (we need good filters).

    We need tools
    Filters will separate the "wheat from the chaff" by isolating the good signals & eliminating the noise from the market.

    Skate.
     
    Saqeeb and JimmyJames80 like this.
  4. greggles

    greggles I'll be back!

    Posts:
    2,421
    Likes Received:
    1,189
    Joined:
    Jul 28, 2004
    Here are some quotes on adversity to help you get through the difficult times:

    "The beauty of the soul shines out when a man bears with composure one heavy mischance after another, not because he does not feel them, but because he is a man of high and heroic temper." - Aristotle

    "Adversity introduces a man to himself." - Albert Einstein

    "It is your reaction to adversity, not the adversity itself, that determines how your life’s story will develop." - Dieter F. Uchtdorf

    "There is no better than adversity. Every defeat, every heartbreak, every loss, contains its own seed, its own lesson on how to improve your performance the next time." - Malcolm X

    "Strength does not come from winning. Your struggles develop your strengths. When you go through hardships and decide not to surrender, that is strength." - Mahatma Gandhi

    "All the adversity I’ve had in my life, all my troubles and obstacles, have strengthened me. You may not realize it when it happens, but a kick in the teeth may be the best thing in the world for you." - Walt Disney

    "Hang in there. Trust that those winds of adversity are blowing away what’s not needed while making you stronger." - Anonymous

    "There is no education like adversity." - Benjamin Disraeli
     
    JimmyJames80, Skate and Darc Knight like this.
  5. Darc Knight

    Darc Knight Investor not Trader

    Posts:
    1,211
    Likes Received:
    590
    Joined:
    Feb 28, 2015
    "If you're going through Hell, keep going!"
    Winston Churchill.
     
  6. Gringotts Bank

    Gringotts Bank

    Posts:
    6,162
    Likes Received:
    575
    Joined:
    Jun 30, 2007
    Psychedelics are at the ground floor of a huge uptrend. A 'tipping point' you might say. Why dump it here? Because your level of consciousness determines your success.

     
    JimmyJames80 and Skate like this.
  7. Skate

    Skate

    Posts:
    1,367
    Likes Received:
    5,296
    Joined:
    Dec 28, 2013
    greggles, I was with you till Walt Disney made his stupid remark (I hope Walt meant a "metaphorical" kick in the mouth)

    Some quotes are helpful, others not so much
    From one who has been kicked in the mouth, it definitely wasn't 'the best thing' that has happened to me, far from it. I didn't even enjoy the stitches, let alone the dentist visit.

    Lets recap
    "You may not realize it when it happens, but a kick in the teeth may be the best thing in the world for you"

    Nope, I still don't agree !

    Skate.
     
    Saqeeb and JimmyJames80 like this.
  8. greggles

    greggles I'll be back!

    Posts:
    2,421
    Likes Received:
    1,189
    Joined:
    Jul 28, 2004
    I think he did. A literal kick in the teeth will only result in unnecessary pain and dental bills. But I suppose that is adversity also? Not sure what it can teach you though.

    Sorry to hear about your literal kick in the teeth.
     
    Skate likes this.
  9. Skate

    Skate

    Posts:
    1,367
    Likes Received:
    5,296
    Joined:
    Dec 28, 2013

    Gringotts Bank, you are absolutely right when you say "your level of consciousness determines your success" I have not had time to view the video, by you using the word "success" now gives me an opportunity to say a few words on the subject & relate success to trading.

    Failure and incompetence

    Trading it is not about being right or wrong its about having a go, it is about making decision, good decisions. We hesitate to buy for one reason or another & often become reluctant to sell losing positions because we equate it as failure and incompetence.

    Outcomes the stories
    Deciding to hold that sucker a little longer is where we start to make up stories in our head - "lets give it a little bit more wriggle room" which is totally the wrong mind set.

    Defending poor decisions
    Poor decision-making process creeps into your mind all the time, we start to have an opinion on just about everything. You defend your poor decision instead of making the right decision & cut that sucker 'lose'. Traders always confused net-worth with self-worth.

    So always ask: ‘do I want to be a loser for holding a loser ?’

    Skate.
     
    Saqeeb and JimmyJames80 like this.
  10. Skate

    Skate

    Posts:
    1,367
    Likes Received:
    5,296
    Joined:
    Dec 28, 2013
    greggles, nothing to worry about its was all part of a job I once had & the some of the people I had to deal with were the scum of the earth.

    Skate.
     
    JimmyJames80 likes this.
  11. Skate

    Skate

    Posts:
    1,367
    Likes Received:
    5,296
    Joined:
    Dec 28, 2013

    Gringotts Bank, consciousness is open-mindedness or mindfulness (mindfulness is an exciting topic)

    Consciousness

    Having consciousness means you don’t have an opinion on everything, it create open-mindedness, it gives you a chance to listen to the other side of a story, by listening your decision quality goes up because you don’t buy into bad ideas.

    Now I'll relate the above passage to trading
    Having a trading plan prevents you from changing your story to suit the market condition & before entering a position, have an exit plan, be open minded, don't be married to an idea or a stock and before making a trading decision take time to check that you are in the state of mindfulness so you can have confidence in your decision.

    Skate
     
  12. Skate

    Skate

    Posts:
    1,367
    Likes Received:
    5,296
    Joined:
    Dec 28, 2013
    Let me give you some short & snappy advice

    "Always challenge your own thinking and stay within your circle of competence when trading"

    Skate.
     
    Saqeeb and JimmyJames80 like this.
  13. Gringotts Bank

    Gringotts Bank

    Posts:
    6,162
    Likes Received:
    575
    Joined:
    Jun 30, 2007
    Opinions certainly get in the way of gaining access to higher levels of consciousness.

    Seng-ts’an: "Do not seek the truth; only cease to cherish opinions". Good advice for me.
     
    JimmyJames80 and Skate like this.
  14. tech/a

    tech/a No Ordinary Duck

    Posts:
    18,959
    Likes Received:
    2,699
    Joined:
    Oct 14, 2004
    We all rise to our level of incompetence!

    Think about it!
     
    JimmyJames80 and Skate like this.
  15. Skate

    Skate

    Posts:
    1,367
    Likes Received:
    5,296
    Joined:
    Dec 28, 2013
    Risk and the rewards
    Defining the risks and the rewards in the share market is far more intensive than it first appears and it’s vital to understand intimate details of a company’s operations and all external forces that may impact its earnings.

    Playing Pool
    Risk is like playing pool, when a pool player lines up to take the first shot, they may only hit one ball but hitting that one ball scatters so many other balls on the table, and risk is the same, risk has the ability to effect other indexes and it can flow onto individual securities.

    Skate.
     
    Saqeeb and JimmyJames80 like this.
  16. Skate

    Skate

    Posts:
    1,367
    Likes Received:
    5,296
    Joined:
    Dec 28, 2013
    The world is your oyster
    Trading is not limited to the Australian Securities Exchange (ASX) as the world is your oyster, trading is not limited to the country of your residence.Trading in different countries adds complexities due to their taxation and capital gains laws and how they are appropriated.

    Tax treaties
    Most western countries have reciprocal Investment and tax treaties between participating governments assuring investors don’t circumvent their financial obligations in regard to meeting those taxation requirements.

    Skate.
     
    Saqeeb and JimmyJames80 like this.
  17. Skate

    Skate

    Posts:
    1,367
    Likes Received:
    5,296
    Joined:
    Dec 28, 2013
    Within the Australian market how do I choose which Index to trade?
    If you decide to invest locally in the ASX you need to evaluate the level of risk that you are willing to absorb to determine which index or combination of indexes that are suitable for you to trade.

    Volatility is a traders friend
    To make money in the stock market you need volatility to shift the share price in conjunction with company performance and capital growth. Rock solid companies being less volatile are suitable for those who have a low tolerance to risk.

    For the low risk traders
    Bluechip companies have been traditionally traded by low risk traders, these investors find comfort trading these companies because the emotional roller coaster is a lot less scary than other indexes.

    Skate.
     
    Saqeeb and JimmyJames80 like this.
  18. Skate

    Skate

    Posts:
    1,367
    Likes Received:
    5,296
    Joined:
    Dec 28, 2013
    Australian Securities Exchange Indexes

    The ASX 20
    Comprises all the big Australian Banks and when the banks do poorly so does this index.

    The ASX 100
    Comprises the largest 100 companies, being the ASX 20 as well as the next 80 companies by market cap. Investors who are a looking for larger returns on their investments may trade this index.

    The ASX 200
    This is the market that professional traders use as their benchmark. The ASX 200 comprises the largest 200 companies by market cap, being inclusive of the ASX 20, 50, 100 and the next top 100 companies. The ASX 200 is much riskier index to trade but the rewards can increase because of the increased volatility of the companies that make up this index.

    If you can accept more risk the rewards can increase as well.

    Skate.
     
    Saqeeb and JimmyJames80 like this.
  19. Skate

    Skate

    Posts:
    1,367
    Likes Received:
    5,296
    Joined:
    Dec 28, 2013
    Within the market how do I choose which Index to trade ?
    The All Ordinaries (ASX: XAO) comprises of the top 500 companies by market cap and it has a mix of safe, stable and aggressive companies that enjoys more volatility than all the indexes listed before this post.

    The right risk/reward combination
    The All Ordinaries for me has the right risk/reward combination for good growth, the volatility is a bit of a roller coaster but the rewards are larger with the corresponding disadvantage of higher risk.

    Nail biting volatility
    Indexes above the All Ordinaries have nail biting volatility and it’s akin to hanging on to a cliffs edge just by your fingertips, meaning trading an Index above the All Ordinaries you’ll require nerves of steel or at the very least you need to be a very hardened punter.

    Skate.
     
    Saqeeb and JimmyJames80 like this.
  20. Skate

    Skate

    Posts:
    1,367
    Likes Received:
    5,296
    Joined:
    Dec 28, 2013
    When is it safe to trade?
    The market has three states of movements, trending upward, trending downward or trending sideways.

    Ideal time to trading
    The ideal time to trading is when the Index you are trading is trending upward.

    Index filters are very common in trading
    An Index filter is the most common way to gauge if the market index is moving higher or lower and the filter comprises of a simple moving average set against the index and time frame you are trading.

    Skate.
     
    Saqeeb and JimmyJames80 like this.
Loading...

Share This Page