You Shouldn’t Invest A Cent Without A Verified Statistical Edge…
In last week’s article, I explained why timing the market is a strategy that, if set up and executed correctly, has the greatest potential to get you long-term market-beating returns. And when I talked about the must-have elements for creating such a strategy, I mentioned the “Statistical Edge.” In fact, I said that without a […]
7 Essential Elements for an Outperforming Stock Market Portfolio
Let me start by being blunt: You can’t add these 7 elements to your portfolio overnight. Doing that requires serious dedication and a “strategy before tactics” approach. So, if you’re expecting tips that’ll instantly transform your portfolio into a market beater… Best don’t read at all. You’ll be wasting your time. On the other hand, […]
The 6% Rule
This week’s journal posting is a response to a comment by ‘fastbucks’ last week when the following question was posed: “Another related rule is the 6% rule, i.e. you cannot have a total risk in your positions at any one time greater than 6%. I don’t suppose you have any comments on that?” The 6% […]
Busting the Myth of the 2% rule
The art of trading is not about winning as much as it is about not losing. Like a business needs to control its costs, a trader needs to be able to minimise and withstand losses so that they are ready and able to take advantage of profitable opportunities. This comes down to managing risk at […]
Luck, randomness and skill…….
One of our long standing customers forwarded this article to me last year. It touches on a number of important topics that I believe are strongly related to active investing and are well worth being aware of to help put your trading endeavours into perspective. http://www.smh.com.au/executive-style/culture/luck-of-the-draw-20120829-250hc.html I’m sure that as you read this article all […]
Open Letter
The following Open Letter was sent to me by Mike Cullen as a comment to last week’s blog. It contains an interesting way of viewing trading, which I obviously agree with. I felt it deserved it’s own limelight as a posting all on its own. The context is Mike visiting a friend, Bill, who has been […]
What is an edge?
So what is a researched EDGE and why is it important to have one when trading and investing? An edge is a researched set of entry and exit criteria that deliver profit trades that are sufficiently large enough to cover costs and loss trades over a large number of trading events. The biggest strength of […]
Charting your portfolio performance
An often overlooked technique by many traders, investors, and unfortunately even some investment professionals is that of charting the equity changes that occurs in a portfolio. Most tend to review the net changes that occur in a list but few go to the trouble of reviewing a mark to market equity curve of the portfolios […]
The bottlenose dolphin and its edge
This week we take a light-hearted yet serious look at what it means to have an ‘edge’. In the natural world animals develop skills and characteristics that allow them to prosper and survive often under strange and adverse conditions. This process of evolution gives those that develop these skills a survival advantage over those that […]
What is a good enough edge?
For those building a system I can only commend you for taking on such a challenging and potentially rewarding task. It must be said that it is not for everyone as the skills and focus required for developing an edge are somewhat specialised and niche. The 4000 plus hours I invested into SPA3 has taught […]