Stock trade

Denne artikel er også tilgængelig på dansk.

Stock trade is now for everybody since web banking has become common.

I have traded with stocks and bonds since 1990 but due to limited assets I have only made a very small number of transactions. I made some good deals during the nineties, where I took advantage of the so-called (at least in danish) "elevator effect" which certain kinds of papers exhibit. For instance "Danske Bank" have gone up and down in a more or less predictable pattern, so I bougth when they were low and waited till they were high - pretty basic actually and also low risk in my opinion. In the end of the nineties I was convinced that there were only one way and that was up, so in late 2000 I purchased some telecom and IT stocks through my web bank provider, not at XCSE but at my banks internal reserve. This was a shining exmaple of poor timing combined with a poor trading system so as of the end of march 2001 I have only traded directly on the exchange (through my new bank).

Wiser and poorer.

I lost a bit when the socalled IT-bubble bursted in late 2000 and also after the terrorist attack on september 11th 2001 so I was compelled to define my own set of investment rules to serve as a guideline for future investments:

1. SL is not an option, but a must - I tend to go with 4% (Faith is good in church, but expensive on the exchange!). Define your SL and reevaluate it while going up, but never going down!
2. Low trade costs is a must due to rule #1.
3. Trading directly on the exchange is also a must due to spread and rule #1. (This also support a true image of the market)
4. Spread your risk in several branches, sub branches or companies (if your are in love with a certain branche, split your investment within the brance, for instance IT/TECH are many things, don't go above 33% within each)
5. When in trouble - don't double, Sometimes it works and you save your investment - even with a small plus, but other times it doesn't work a you go down with a hollow thunder (and loose big time).
6. Know yourself and maintain a tight grip - sell on hunces and buy on analysis and thorough contemplations (your own, not others) combined with hunches and rumors.
7. Set a goal for how much you can accept to loose and how much you want to win.

Since my first losses, I have won some back due to these guidelines and a bit of good luck, but since 2002 I haven't had enough time or money to keep up the trading. On the other hand I haven't lost anything since then.

I have build a database in Access where I keep track of my trading and can see the development in profit, which unfortunately still are in red. There are now a number of online services who can do the same thing, among those my current webbank solution and the danish investment community website euroinvestor.dk, so the actual trade data and related "profit" I track in my webbank and I use euroinvestor.dk to simulate trades for fun and learning.

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