Umbhali Oqavile

We all use different approaches in the markets, the good news is that there is no wrong way, just your way.  I use Systematic Trend Following to trade the markets. It is an approach that I learnt from Traders who mostly trade other securities besides stocks. It is a technical analysis approach that is based on moving averages. It works well across many instruments, at different time frames. It is a good approach for indices and commodities. Whilst it is applicable to forex and stocks, it has some limitations, especially with stocks, at least in a short time frame, below 1-day. Even though I joined the markets with the intention of becoming an (a stock) investor, over the years I have evolved into a stock trader. At first I was just a kid who wanted to invest for his future self; unit trusts (I know hey) there and couple of stocks there. Eventually I caught the wind of "trading" and I wanted in. I realised that I needed a strategy, unlike buying index tracking unit trusts or

 Is that even possible, yes. Can I do it, yes. The Stock Market. The Market of Stocks Beating the stock market is probably the main goal for every DIY investor. I mean if I was not obsessed with beating the market I would just delegate the investing task to the professionals and get whatever returns they can manage to get annually. By beating the stock market I mean generating alpha, have higher returns than the market. If the JSE All Share Index return 14% in the year, return more than 14%. Foundation of beating the market The first and major component is having a strategy that has a proven edge. Edge is described as the probability of one thing happening over another, in this case you need to have more profit than losses. However, your win rate does not mean much, it is the size of your wins/losses that matter, the trick is in asymmetric risk-to-reward. Your wins must dwarf your losses by a broad margin.  I use Trend Following, this approach is known to have a low win rate, a 40% wi

At some point I nearly quit trading, or whatever that I was doing and thought it was trading. I had a strategy, by then I had already read  Trade Like a Stock Market Wizard  and  Trading in the Zone . In theory I was already in the path of consistent profitability but I was still not profitable. Not trusting the System This could be not understanding the System, but I will stick to not trusting the System despite proven results that it works. Systems, set of rules, work in certain markets, they are designed for certain markets and will not work in all markets. A Systematic Trend Following system will only work in a trending market, in a range bound market you will die by multiple cuts as you will be taking a series of stops. If you trade support and resistance levels you need a range bound market. So, the lack of trust often comes from not understanding the system and when it works. It is important to understand any system before you use it. I had a system, the JSE was in a downtrend,