Managed Funds General advice!

"To be a success at trading you have to get it right 55% of the time and know when to take a loss and move on"

Close enough
To have 5 successful trades out of 10 is enough to make money providing that your risk/reward ratio is 1:3 or higher

 

Thanks for the replies re. trading. I don't have a lot of practical experience as yet, but have been looking into strategies and testing some ideas (with real money).

So, this is a somewhat novice point of view... but I draw a distinction between what I call 'buy & manage' and 'trading'. I'm mainly only thinking in terms of bull market... but going with that for the moment...

- the 'buy & manage' strategy is in essence finding companies trending up at a certain minimum annual rate, buying and monitoring them until they fall below long term trend, then sell and look for next company meeting criteria. Essentially looking for companies that are trending up at rate significantly more than the index (can build in additional objective rules and commit them to a written plan).

I'm still learning... but it seems to make mathematical sense to me. Example, the All Ords is an average of many companies, which means some companies above the average and some below. If you just focus on the ones doing x% above the average (All Ords), by definition have to beat the index (and beat it easily) as far as I can determine. Also, the companies that are beating the index include blue chip companies, so you'd be buying those ones, not small spec stocks. Using this approach I achieved approx. 20% growth over 6 months (with real money) without leverage, this would have been roughly double the All Ords index over same time. Maybe it was just luck, not sure.

- 'trading' to me is a very different strategy, shorter timeframes, different analysis, different criteria for entry/exit etc. Maybe a topic for another time

Anyway, my thoughts for what they're worth... thanks very much for people's input, much appreciated