Trade My Way covers two short-term, medium-risk share trading strategies that have been well proven over years of application to the Australian stock market. While these strategies have a degree of universality, this book does not cover currency trading, index trading, options, warrants, futures or CFDs. Furthermore, the indicators described in this book have been tuned for trading Australian shares and should not be applied to any other type of financial market or product without very careful adjustment.
Introduction:
Knowledge is valuable. Either someone else passes on knowledge to us or we acquire it for ourselves, the latter approach usually involving some degree of pain. A typical example is sticking your hand in a fire. I know I was told by my father not to stick my hand in the fire or I’d get burnt, but I was (and still am) the type of person who has to discover these sorts of dangers for myself. When speaking publicly, I often say that I’m in possession of what I know today because of the money I have lost in the market, not because of the money I’ve made. I’ve stuck around because I have a fairly high psychological pain threshold and I’m extremely stubborn (psychology is a major aspect of share trading and we therefore discuss it in chapter 13). I have suffered greatly in my life to work out what does work and what doesn’t work, and I’ve found that sticking my hand in a fire will burn my fingers.
The stock market is very much like life in general, where one learns what works by spending a great deal of time and energy working out what doesn’t work. I bought my first share when I was only eight years old, so I’ve spent a very large proportion of my life testing a very wide range of different trading tactics. I’ve tried using tips and rumours, expert analysis from different gurus and media sources, piggybacking the likes of Kerry Packer and Warren Buffett, and even cyclical analysis.
Here’s what I discovered — all these techniques work and don’t work. Their success depends largely on when you use them, so at some point all these different approaches will make you money, but at some point they’ll also take it away again. It’s like the old saying about a broken watch being right twice a day — unless it works all the time, it’s useless. So it is with share trading tactics: either they are universal in their application or they are effectively useless, not to mention costly.
There are a lot of broken watches out there when it comes to share trading, so the first problem any newcomer to the stock market will encounter is the problem of sorting through so many choices when it comes to share trading ideas, philosophies, systems and strategies. To help you deal with all of these distractions and stay focused, I discuss the problem of the noise in the marketplace in chapter 14. Hopefully being aware of the issue will help you to deal with it. To be forewarned is to be forearmed.
Call it a collection of observations, facts and/or truths — the knowledge that I have accumulated in my lifetime has often been obtained at great personal expense. This particularly applies to the knowledge I possess about the stock market. This book is based on my knowledge of the stock market and share trading, namely two key facts that I have come by at great personal expense. I hope that I can pass this knowledge on to you through this book, saving you much of the pain that I have endured at the hands of the stock market.
Contents:
- What is share trading?
- What is charting?
- Modern technical analysis
- Risk management
- Anatomy of a trade
- Introduction to active trading
- Tools of the trade for active trading
- Taking active trading for a test drive
- Introduction to breakout trading
- Tools for breakout trading
- Applying the breakout trading strategy
- Taking breakout trading for a test drive
- The biggest problem is you
- Keep your eye on the ball
- Blue chip share trading
Trade My Way: Share Trading Tactics That Really Work for Novices to Experts By Alan Hull pdf
