For 2006 I have been reasessing my investing ideas to try to be more successful.
Last year I took small profits from a wide range of shares and missed out on some huge rises, made some large losses on the duds by not getting out soon enough-then some recovered!! one or two have gone bust and one or two like NLR have rewarded me well and kept me solvent. However some of you are obviously doing far better than me so I thought I'd change methods--any tips welcome. This year I'm going to look for shares with a smaller spread and limit the number so that I can buy say 50k then move in and out as the sp changes-I don't feel confident with spreadbetting but this seems the buy method closest to it-if it pays off I shall have to pay the CGT without complaining.
Lots of methods coming in
1 Good Stock Selection-research buy and hold. instinct and luck applies here too
2 Capital Preservation-by using stop losses.
3 Instrument selection--CFDs and Spreadbets
4 Buy high risk shares for possible higher rewards.
5 Position sizing- hold enough to trade profitably.
6 Margins--choose shares with a narrowish spread or you wait for a big rise before you make any profits.






Is this a good summary Gausie?

Agree with 1, disagree with 3

>> Gausie

I would not set such a close stop-loss as in your example. After all if you are expecting the market to rise you have to give it a chance. I usually use the 40 day moving average and put the S/L just below this. So let us say the current price is 235, my stop loss is 200 and my trading account is 10K. However for technical reasons I want to get in only at 240. I place an order for 240p. My risk is 40 points. 4% of my trading pot is 400. So i bet 10 per point (40 points x 10) = max loss 400.

I restrict my trades to 12 as a max. So if I lost 12 x 4% I would lose 48% of my account. The idea is that even in the worse case scenario you would lose less than half your money.

regards
gk