I am a amateur trader living in Toronto, Canada. I've been trading for several years but have only seen consistent progress in the past year or so. In April 2010, my TFSA account dropped to $7,889 from $10,000. That's a 21% loss! Obviously, it sucked big time and my trading methodology had to change. Slowly, I was able to crawl out of the hole I had dug myself and through one trade at a time, several hundred dollars at a time, several percentages points at a time build a better strategy which boasted my confidence. I started to repeat my successful trades and avoided the things that didn't work. I cut my losses fast by using stops, became more patient by waiting for the right setup, and started to plan the trades and trade the plan. So at the end of 2010, my TFSA closed at $12,213! That's a overall 22% gain from my initial investment but almost 55% gain from trough to peak in 8 months. This year, I will add another $5,000 so my starting amount for 2011 is $17,213.
I use mainly technical analysis and do very little fundamental research. I trade mostly junior mining, precious metals, energy, uranium, rare earths stocks on the TSX and TSX Venture. However, I will trade anything if the risk reward is excellent, including ETF's which I sometimes use to short by buying the inverse ETF. Another part of my strategy is to acquire free shares of a stock where I really like the 'fundamentals'. You acquire free shares buy selling your initial investment and keeping the profits in shares. For example, you buy 1000 shares of ABC for $2 ($2000 investment) and it goes to $4, you then sell 500 shares at $4 to get your $2000 back and keep the 500 shares. Therefore even if it goes to zero you still have not lost any money.
I use mainly technical analysis and do very little fundamental research. I trade mostly junior mining, precious metals, energy, uranium, rare earths stocks on the TSX and TSX Venture. However, I will trade anything if the risk reward is excellent, including ETF's which I sometimes use to short by buying the inverse ETF. Another part of my strategy is to acquire free shares of a stock where I really like the 'fundamentals'. You acquire free shares buy selling your initial investment and keeping the profits in shares. For example, you buy 1000 shares of ABC for $2 ($2000 investment) and it goes to $4, you then sell 500 shares at $4 to get your $2000 back and keep the 500 shares. Therefore even if it goes to zero you still have not lost any money.
Why a blog? People only tend to talk about their victories but never admit to their failures. A trader must admit to trades that are not working and quickly take action, this was my biggest lesson. I feel that by posting my trades, it will help me adhere to my rules and plans. The plan is to grow my TFSA account as much and as fast as possible but take the least amount of risk.
I DO NOT recommend you do what I do but please feel free to comment. Right-Click to open charts in new window/tab to get a better enlarged view.
