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Online Share Trading

Engage and learn about markets and trading online

The importance of share selection

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the 2% single stock rule, and 6-10% total capital exposure rule, means that you can only be in 3-6 stocks at any given point of time. How then, do you make sure you have the right 3 stocks? Interested in hearing forumites views
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Super Contributor
I started doing ssf on the sbk recomendations after doing my own research. Doing very good on these at the moment. Will keep adding as the shares re enters their bull trends. Recomendation that Bil and sab is a possible long within the week.
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Super Contributor
i agree,amt hinking of a CALL warrant on BIL and an Installment on SAB.
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Super Contributor
Firstly I look for a stock that is trending. then determine if its on an up leg of the wave, check Botttom bol, check MA, I use the 10, change values for Stoch and MACD to best suite the waves, back test, do a dozen paper trade if in a profit, have the base of an entry system. Then decide on what will kick me out. A few calcs and find your investment amount and you are ready to rock.
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Super Contributor
Skaapjop.. the 6% rule is "6% of capital at risk" so the moment a trades stop is at break even you can buy another share.. it is possible to be 100% invested this way while never putting more than 6% of your capital at risk at any one time... I hope this helps..so as you a trigger comes you trade..after 3 triggers you wait until the stops have moved up to 4% risk then you take your next trigger..
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Super Contributor
another answer is to buy the winners... I did a study and in 2004/2005/2006/2007 there were only a hanful usually less than 5 top 40 shares that took the place of relative best performing share for each year... So when MUR and ARM were on top they stayed on top for almost the entire year... answer use relative strength as an indicator. To qualify that further look at werner compition the guys on top stay on top almost the entire year.
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Valued Contributor
ya, momentum trading/investing .. buy the winners ..
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Agree on buying the winners, i guess my question is how to pick the winners, John, care to share that study you did?
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Just shows how diagonally opposed strategies can make money - my value investment strategy is built on buying cash generative losers, and its done excpetionally well since I started with it.
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Valued Contributor
winners are those with the highest gains over the previous period, what ever that period is ..
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Do u look look for a low PE ratio? if so in what range?
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Valued Contributor
nope .. just biggest mover over the period ..
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