Hi there!
What have I learned this week on my journey to financial freedom?
Let's focus on the stock market.
Having done Marcus de Maria's course, I would like to stress that there are many, many techniques for making money on the Stock market. Just learn one or two, and stick to those - and stick to the rules!
This week I really learned of the power of the trailing stop loss. If you look at the Bigcharts site (http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=hlys) and put in "pot" as the symbol or keyword (on interactive charts - these allow you to plot the support and resistance), you will see the amazing vertical rolling stock for Potash Corporation.
Using my virtual account on Options express (https://www.optionsxpress.eu/login.asp) I bought into these shares in March at $150.07 per share. They are now valued at $181.9.
Now to use the technique that I learned with Marcus (click on the link to Investment Mastery to find out more), you start setting a stop loss below the low of that period - in this case it started at $104.46. If I hadn't been moving the stop loss up with the share price every few days, then I could have lost all those gains if there was a sudden drop in the market. It could still happen, but I have just reset the stop loss at $178.53, so should retain some of the gain.
With the technique that I have learned, we trade on the US stock market, where there is no stamp duty to pay. It is best to trade with a minimum of $2000 for each share, as each transaction carries with it a $14.95 fee (virtual money too at present)...
This trade has risen by $445.62 on an initial investment of $2100.98 - a ROI of 21.2% in 4 weeks! Beats the bank rates, doesn't it! This is an unusual stock though...
I'll tell you next week of my adventures with CORS - Corus Bankshares Inc - where I invested without following the rules! Just too keen to get practising (but I wouldn't have done so if it had not been a virtual account!).
Have fun with your investments! I am!
KR
Alison
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