Umbhali Oqavile

  To succeed in the market you need to have a trading (or investing) system. System =  A set of rules What to buy How much to buy When to exit; profitable and losing trades Design a system that is in line with your personality, and time allocation for trading purposes. Don't design a system that uses H1 time-frame when you have other commitments during trading hours. Don't design a fundamental analysis system when you don't understand the information presented in financial statements. Can't read a chart, forget about technical analysis based systems! After you've designed your system, it's time to test it (or back test it if you're an advanced Trader), you can use a demo account but I prefer to use a small, reasonable, real cash account (you can't back test emotions on a demo account). If the system is profitable, and you're emotionally ready to trade it, use it in 10, 50, and 100 trades. Check the numbers. Win rate, percentage of winners vs losers

  You buy a stock, for whatever reason. Then it starts to trade lower and lower, you're now not sure if you should exit or not. It doesn't matter whether the buy decision was good or bad , the assumption is that you had conviction on the buy. You have two option; exit or keep the position. I don't recommend changing from being a Trader to being a (value) Investor at this point. Exit You take a loss, hopefully a small loss (< 2% of your total portfolio, position sizing ) and move on with your life. You could be wrong and the market start to reverse, but heck you'll sleep better from now on. Your account will also recover quicker. Stay The market continue to fall, that initial -10% is now -35%. You don't want to exit now because the loss is bigger. You continue to stay, down another 10%. You can no longer handle the loss emotionally, and there's an amateur who keeps on saying "you only lose when you sell." One day your emotions will be too strong for

 It's been over a year since the stock market humbled me but I still get PTSD thinking about that incident. Once again, let me share my story. The emergence of Coronavirus disease (COVID-19) interrupted life as we know it. Equally, the securities markets were affected. In the beginning of 2020, South Africa was yet to feel the wrath of the virus, but on February 24 the dominoes started to fall in the Johannesburg Security Exchange (JSE). As a Systematic Trend Follower I have an obligation to adhere to the set parameters, particularly stop levels, and to bend with the market. Majority of my positions started to hit stop losses, I sold ALL my shares in order to either take a loss or lock in whatever small profit I had. In the end I was down -20%, phew. I stayed in cash position for 2 weeks before I started getting buy signals again. Despite the signals, the risk of ruin table paints a grim picture. In addition to working twice as much to break-even, trading costs also begin to be sig

  Preparation is key if you want to have an ounce of success in the securities markets. More often than not people are drawn by the possible riches of the market, then they neglect the most important aspect of trading. A trading plan . In this Blog I want us to discuss "A Trading Plan". A trading plan consist of three components; the "strategy" and risk management. The third component of a trading plan is the Traders mindset. All these components contributes to the Trader's success, you can't leave one at the door. The Strategy There are various ways to trade the markets. Without going into more details; the two common ways are derived from fundamental analysis, where a large of pool of people uses  Value Investing , or technical analysis. Fundamental analysis, for the sake of simplicity we'll take as if value investing is the only way to do fundamental analysis, is the art of diving into company financial statements to diagnose the state of the company

  This of course isn't a financial advice . Due to my Science background, I have a tendency to call "finance" stuff the way I understand them so don't be alarmed if some of the terms don't make sense, they make sense to me. I find stocks to buy by browsing charts, but thanks to stock screener I now screen for stocks that meet the set criteria. More on this here:  Systematic Trend Following Cheat Sheet . Around September/October 2020 I started to get a lot of property & financial stocks, not much from the mineral sector except for platinum group metals (PGMs). At that time I had a gold long position which was in the money but struggling to break to new highs. It then hit me, what if there's a "sector rotation?". I missed the bull run in the commodity cycle due to my then limited knowledge, a story of another day. I certainly didn't want to miss another sectoral bullish cycle, I began to shortlist buy candidates.  Problem : I got over 10 proper

  In this Blog we will introduce beginners to  Forex  trading. Please note that this is  not a financial advice , just an informative Blog. Introduction Currency trading , also know as Forex, is the process of buying and selling currency pairs through a  broker . All the transactions go though an  exchange  that facilitates these transactions. In the exchange, at least in the 1980's, the transactions are carried out using United States dollars (USD), even though you can trade pairs like EUR/JPY. There are pairs known as  Major Pairs , these are the mostly traded currency pairs in the world. The FX market is  liquid  but these pairs are the most liquid pairs as they contribute a large amount of volume linked to economic transactions. Major Pairs: EUR/USD GBP/USD USD/JPY USD/CHF These "major" pairs are known as commodity currency pairs: USD/CAD , AUD/USD , and NZD/USD Laws of Supply and Demand Currency pairs are free-floating, meaning that their prices are governed by laws

  The securities markets offer endless possibilities to create wealth. I use securities instead of stock because there are many tradable  securities in the market, not just stocks , although stocks is what people are familiar with. There's a confusion between risk and volatility, and if your're confused, you're not the only one. I first came to a clear definition of risk and volatility in Michael Covel's book Trend Following Risk = possibility of a loss Volatility = Rate of change, in markets' context, price All investments carry risk ; that is, there's a possibility that you may lose your invested capital. Therefore, it is important to understand this before you venture into investing. Various asset classes have varying volatility; cryptocurrency is currently the most volatile assets classes whereas bonds have the least volatility. High volatility doesn't necessarily imply high risk; if the average volatility of a Rand is 20 cents, although it's 20% o