Depending on your account size, these leveraged instruments may actaully help you reduce risk in your portfolio as you can use them to buy into various sectors simultaneously and "hedge" yourself by being more diversified and having both long and short positions. This all hinges on the fact that you need to set clearly defined stop losses for each position and size them according to risk capital. It also allows you to have cash available for opportunities that may arise. I am all for leveraged instruments (when they are used porperly). Read up on trading systems by Van Tharp, Elder, Douglas, Turtle trading, Swing trading, day trading and do it. You will only learn by doing it ultimately. And with real money at risk!
No problem. As a start to developing a complete system (with money management, risk management, entires, exits and setups) check out the complete turtle trading system as well as some background to the experiment on this link https://www.bsp-capital.com/documents/turtlerules.pdf Read this along with Jesse Livermore's story "Reminiscences of a Stock Operator" which was written well over 80 years ago and you will pick up some major similarities in these trend following methods that can reward the patient and disciplined. Happy holidays to you and all the forumites as well!
Hi Ashley - I have been trading shares since 2001 and started to trade SSF and CF a year ago. I started off slowly/conservatively and now have about R 80 000 invested in SSF and CF ( I do this seperate from my shares, but is the same account). For this financial year to date I am about R 40 000 up, so there definitely is money to be made in this area. The only thing is you need to keep a fair amount of cash in your account to cover the daily moves. My best day I was up about R 15 000, but the same can be true in reverse. The important thing is to set yourself strict rules in terms of exit strategies, cos it is definitely worth taking a bit of a knock short term and exiting a bad/losing investment, than staying in and waiting for it to get back to positive territory. So Stop Losses are an absolute must, because the value of the future can move very quickly because of the gearing (in the case of CF it can be around 14 times geared). The other schlep is that you have to put your futures onto the market every day, cos the life of a buy or sell bid is only 1 day, so it takes a bit more admin/involvement than shares. Happy trading if you decide to venture into Futures!
Ashley, i only invest for long term, have worked out a strategy that i only look for very consistent earners, stable businesses, have diversified offshore in US and Canadian markets but believe to really build wealth over time one needs to make sure you minimize risks and slowly but surely increase your capital. So please dont stop the long term portfolio and if you do create it only make it about 10% of the long term one, then never, ever take more cash out of the long term one when the trading doesnt go so well. this only erodes the compounding interest effect. hope this helps.
Hi janne, most days. I generally sell at about a 5-13% increase (but obviously the gearing makes it more). So pretty much once I have bought I put it for sale at my targeted exit/profit price every day until it sells.
Thanks Buzz, your strategy makes sense. Would you be able to exchange some more thoughts on trading, i have some more questions i need answers to. My email is [email protected], pls send me your contact.