SelfWealth Trading

wfdTamar said:

Why not open a SelfWealth account and have a go with a smaller amount? You could see how you go without risking very much money. Say you did it with 100 shares how much of a share price rise would you need to cover $19 brokers fees (a Buy and a Sell)? 19 cents per share? On Friday there was about a 60 cent range. Easy peasy

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Actually, my brokerage is $6 or 6 basis points max. Even so, I'm not confident, because ...

... it's a very seductive idea to buy when it's a bargain and to wait till it's gone up a bit. I know that you haven't back-tested it over past data, but I have, FWIW. Like I said before, it's not impossible to make it work, but it's surprisingly difficult to outperform buy-and-hold with the banks (I know, it's not an ETF).


Anyway, it would not be particularly helpful to list what could go wrong. You might dismiss it, consider it unlikely or maybe able to live with it. Remember, I didn't predict dire consequences, only that your efforts would underperform the index in the long term.

Let me explain my situation - up till couple of years ago, I had lived a very frugal life (still do) on a very modest income. Never earned much more than $40,000 and only anywhere near that for the previous 10-15 years or so. I can live on very little (like well under $20,000). I have no dependants, own outright a very modest house in Tassie (has an outside dunny). Being half Scottish and a quarter Jewish I am a born tightwad and canny shopper

Then my mum pops her clogs and I inherited a big wad of moolah about a year ago (all but about $50,000 of what I'm investing now). That changed everything. I am now officially a lucky b**tard. I don't have loads more than you can tell I'm investing. I know, I know - diversify investments. I intended buying a better house for a start and have been looking for a year or two (I'm fussy).

In the meantime I was trading shares with ETrade and doing pretty well. Added on average $10,000 per month to the pot (about 15-16% p.a.). The trading income is now virtually all the income I have (I do some IT Support work locally, but scaling that down now to 'nice' clients).

Found SelfWealth, opened an account and promptly got diagnosed with cancer late January. Good prognosis though, but still - all plans on hold. I've only been trading in Selfwealth in March - while having chemo - actually in the hospital bed

I don't mind any of you judging how I trade. I'm the first to admit I don't know everything and have a lot to learn, so fire away. I won't take anything any of you say as gospel (just in case you're full of it). I have a brain in my head - I just don't yet know it all about trading. Welcome all advice and criticism.

How long can I hold on if the market dives while I'm holding? Indefinitely really, because I can live off the dividends. I held for two years a few years ago (on a much smaller investment that I wasn't living off though). Even just the dividends is more than I used to have as an income. If I got really desperate I could sell some stock, but it wouldn't need to be much and that would be in a severe recession or worse situation. I would think between any event like that I could add enough to weather those storms. At the moment I can cover my annual living costs in two weeks trading.

But hurt? $10,000 frustrating but no big deal, $50,000 would be nasty and I'd be kicking myself. $500,000 (what would that be, another depression? I mean that would mean the ASX200 losing 60%), jeez that'd be a big hurtie I reckon I think that might have me reconsidering my investment strategy for sure

Habakkuk said:

Actually, my brokerage is $6 or 6 basis points max. .....

... ...I know that you haven't back-tested it over past data, but I have, FWIW. ......


Anyway, it would not be particularly helpful to list what could go wrong. ...

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That $6 - is that with Interactive Brokers? If so that's only on smaller amounts right? I had a look and it seems to be 0.08% on large amounts. So about $650 on my trades.

Not sure what you mean by 'back tested it'. Does that mean looking back at past price history over the years? I do look at charts going back as long as the stock has existed. The 3 year chart is very different to the 1 year chart. You can see some patterns, but nothing is guaranteed and to infer a pattern will continue is a recipe for disaster.

As I've said, I value opinions and greater knowledge. That's what's great about forums like this. Otherwise you might have to go and pay some oik financial advisor (puke). I'll consider anything said while not treating it as 'the word' (so no need to worry about me blaming you if it goes wrong) Some people know what they're talking about, some don't, and a whole range of knowledge in between.

Let me make a prediction
From the very little I know about you there is quite a lot you have told us.

(1) by self admittion you aren't used to handling much money $40k
(2) your a Scrooge.
(3) you live frugally

You have some interesting comments much like " top this"
(1) inheritance
(2) $10000 a month
(3) cancer
(4) trade in $500k leveraged lots.

Prediction
If your actually trading.

You won't take a loss of more than a couple of grand
You will live by the adage that until you liquidate a loss you haven't made a loss.
You will hold till it hurts in fact I think leveraged as you are you'll very likely lose the lot.

Whatever the lot is
Good luck in all aspects of your life
Looks like you could do with as much as you can get!

tech/a said:

Let me make a prediction
From the very little I know about you there is quite a lot you have told us.
................................
Whatever the lot is
Good luck in all aspects of your life
Looks like you could do with as much as you can get!

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Woah! Did you intend that to sound rude? Perhaps I misread it Sorry if I have bud.

I've told you a lot to ward off the speculation that I am a multimillionaire messing about with play money. I'm a person that has had it hard, have it ok now and yes, I am trading. Really no different to any of you, just perhaps the amounts are a bit different. I'm 52. I don't know how many years I have left now. I explained my living style and financial situation to get over the fact that I can perhaps afford to take more risks than most.

However I don't consider what I'm doing much more risky than a standard share investment, its just fast tracked/faster paced. Any share you're investing in can dive. Why would an ETF covering the ASX200 be a bad bet?

Are the principals of handling money any different the larger the amount (except maybe for tax)? I am extremely good at managing money.

'Top this', no absolutely not. I'm not bragging. For all I know everyone here is doing far bigger amounts and rolling in multimillions. Do you really think I'd want anyone to 'top' cancer? I only mentioned that as it's so ironic. If you want to check if I'm 'actually trading' (WTF would I make it up?) check out STW for lots about 15300-15400 in size. That'll be me.

If the price goes down I'm losing and feel it, but I don't panic and sell. I don't need to and yes until I HAVE to liquidate (and I won't need to) I wont have made a loss. I just won't be making a profit.

Lose the lot? So you think the ASX200 is bound to crash to zero value? Would that be when Trump starts a nuclear war?

No, I think it's just your very abbreviated posting style can come off as a bit terse. No offence taken

If the price goes down I'm losing and feel it, but I don't panic and sell. I don't need to and yes until I HAVE to liquidate (and I won't need to) I wont have made a loss. I just won't be making a profit.

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This shows without a shadow of a doubt where you are at.
It also shows where you'll end up.

Offence has now been taken. Stop now because you really are rude and insulting. I'm not sure if you mean to be, but that sure is how it reads. You have a high post count and have been on here for years. How many people have you managed to rub up the wrong way rather than help I wonder? Perhaps you're a bit jaded by it all and need to retire gracefully from the forum because you're not adding to a useful discussion.

I welcome helpful criticism and comments, not nasty digs. I try to be friendly and light hearted in my posting. That does not mean I take investment in a light hearted manner. It is now my livelihood after all.

So to those of you that have a downer on what I'm doing, what's your return on your investments? How are youz doing?

If you are holding a loss you've made that loss
The liquidated value of your holding is what it's worth.
If you hold a stock with a $50k drawdown at that point in time
You've lost $50 k.

If you think I'm rude the market will prove to be brutal
With no emotion

You may learn what you need to
But right now your not ready.

Good luck

tech/a said:

(4) trade in $500k leveraged lots.

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Where do you get that from?

What leverage?

Do I need to go over this again? Perhaps you've not read my posts properly? I have mentioned that I can hold the stock through a downturn (so shoot me if I don't use the correct terminology). The stock I trade in is extremely unlikely to tank, so I can wait till it comes back. Yes, in theory, that would be a loss while it's down, but one I will never have to fulfil (undertake?), partake of. It is only a true loss if you actually have to sell the stock.

You may want to teach what you know, but I don't think you'll ever have what it takes to actually teach in a manner that can be learnt.

I had to google leverage. Yes, I'm not using any leverage. This is all my own money. I understand that using leverage puts you at greater risk if the share goes down, but I'm not. Jeez, if necessary I could hold on till it went down to $1 a share (no way is it). I thought he didn't read my posts properly. Hasn't got a clue what I'm doing. Annoying. The rest of you I can talk with fine. Not him. I'm over him. Can you tell?

Go away now tech/a there's a good fella. Go bother someone else.

Anyway this thread has got way off track. It's only supposed to be about SelfWealth, not my friggin' stupid investment strategy. Sheesh! I'll shut my pie hole and go away too.

wfdTamar said:

That $6 - is that with Interactive Brokers? If so that's only on smaller amounts right? I had a look and it seems to be 0.08% on large amounts. So about $650 on my trades.

Not sure what you mean by 'back tested it'. Does that mean looking back at past price history over the years? I do look at charts going back as long as the stock has existed. The 3 year chart is very different to the 1 year chart. You can see some patterns, but nothing is guaranteed and to infer a pattern will continue is a recipe for disaster.

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I'm not with IB. My brokerage is $6 or 0.06%, so about $480 on your trade size. But I would never trade anywhere near that.

Back testing is running through a series of hypothetical trades over a past period to see what 'might have been'. You need to have clear objective, quantifyable rules that you can apply systematically. To do that by hand is tedious and unnecessary. There is software available that makes it a breeze. But it's very easy to be fooled. Not just by the fact that past results are not predictive of future results, but that there will be very likely unrealistic prices used in a back test that give you too rosy a picture because those prices might not have been achieved if your orders had been in the market at the time. Especially at your trade size.

Furthermore, it is very easy and tempting to make things fit with hindsight, again causing nasty surprises when trading for real.

I'm not suggesting that you should learn about this because it will probably take you years to get useful results. This is not in any way belittling your ability. It's what I have learnt from my own experience and that of others. Although if you were interested, I wouldn't discourage you.

We're well and truly off-topic now and maybe I should stop.

If I may make a suggestion it would be this: trade with smaller amounts, pay more in brokerage and keep statistics of all your trades so that you can get an idea of how your numbers are shaping up, i.e. win percentage, average winning amount, average losing, etc. If after a year or even 6 months you find that you have done not much better than simply holding STW, you should reconsider your approach.
As you say, you don't really need to maximise your income so to lower your risk might be a good idea. I can tell you that tomorrow there will surely be somebody pointing out to you that you are taking an enormous risk putting virtually all your money in one trade.

It is clear to me that you have no edge as such. Don't be offended. There are very, very few people on this forum who have an edge. Very, very few. But they all wish they did.

It is possible that you have a natural talent for trading. If so you should do all right. But I wouldn't bet on it.
I hope I haven't upset you with my bluntness. Seriously, I'm just trying to help.

What I could do is invest in a few more stocks, rather than just the one. I do keep track of how I'm going, but more over a time period (like week, or month). Per trade makes sense. I definitely should trounce holding. Even with etrade I was doing that or at least equaling it ( I need to look at that more thoroughly).

Yes, I have no edge or talent. I don't think anyone has. There are always going to be people that do well that think they are special. Thanks.

If you are making $23000 a month ( on average )
Once your brokerage is $9.50

Your return will be over $250k a year.

Just keep doing what your doing .

wfdTamar said:

Let me explain my situation - up till couple of years ago, I had lived a very frugal life (still do) on a very modest income. Never earned much more than $40,000 and only anywhere near that for the previous 10-15 years or so. I can live on very little (like well under $20,000). I have no dependants, own outright a very modest house in Tassie (has an outside dunny). Being half Scottish and a quarter Jewish I am a born tightwad and canny shopper

Then my mum pops her clogs and I inherited a big wad of moolah about a year ago (all but about $50,000 of what I'm investing now). That changed everything. I am now officially a lucky b**tard. I don't have loads more than you can tell I'm investing. I know, I know - diversify investments. I intended buying a better house for a start and have been looking for a year or two (I'm fussy).

In the meantime I was trading shares with ETrade and doing pretty well. Added on average $10,000 per month to the pot (about 15-16% p.a.). The trading income is now virtually all the income I have (I do some IT Support work locally, but scaling that down now to 'nice' clients).

Found SelfWealth, opened an account and promptly got diagnosed with cancer late January. Good prognosis though, but still - all plans on hold. I've only been trading in Selfwealth in March - while having chemo - actually in the hospital bed

I don't mind any of you judging how I trade. I'm the first to admit I don't know everything and have a lot to learn, so fire away. I won't take anything any of you say as gospel (just in case you're full of it). I have a brain in my head - I just don't yet know it all about trading. Welcome all advice and criticism.

How long can I hold on if the market dives while I'm holding? Indefinitely really, because I can live off the dividends. I held for two years a few years ago (on a much smaller investment that I wasn't living off though). Even just the dividends is more than I used to have as an income. If I got really desperate I could sell some stock, but it wouldn't need to be much and that would be in a severe recession or worse situation. I would think between any event like that I could add enough to weather those storms. At the moment I can cover my annual living costs in two weeks trading.

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Hi wfd,
Im new to trading and aussie stock forums, I enjoyed reading your blog or whatever its called.
Id like to chat with you more about your trading style. It sound quite interesting.

Hi

I am interested to know the views of anyone using the SelfWealth trading platform.

I am aware that it’s a bit limited there is no stop-loss feature for example, but it does offer flat fee brokerage which is very appealing.

So for example a $100,000 share trade with Commsec would cost $120 to buy and $120 to sell. Compared to $9.50 buy and $9.50 sell with SelfWealth. Having low trading costs makes it a lot quicker to get in and out of positions on smaller rises or falls in the stocks value.

Thanks