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Pyramiding

PyramidingPreface: This article has been designed and optimized for the The Chartist's Growth Portfolio. The principles contained herein are effective for any trend following strategy of any time frame, but all references will be directly related to the The Chartist's Growth Portfolio.

The term ‘pyramiding’ refers to the adding of positions to an existing holding as the share price moves in the direction of the current trend. For pyramiding in bullish market environments this means adding positions as the price continue to rise. It does not refer to adding to positions as price falls. Adding to losing positions is a quick way to the poor house. The simple concept of trend following is to buy strength; buy high and sell higher. The key benefit of pyramiding is that a clean and sustainable trend will allow excessive gains to be made with minimal additional risk taken. It could be argued that one single clean and sustainable trend can double or even triple a non-pyramided account return in any given year. Obviously there are downsides as well that we will discuss later in more depth.

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Trend Following – An Effective Strategy for your SMSF?

trend followingA recent release from The Industry Super Network (ISN) – the umbrella organization for industry super funds here in Australia, suggests that high embedded fees, including commissions to financial planners, is the main cause for the poor performance of for-profit retail super funds. And, according to Australian Prudential Regulatory Authority (APRA) data, the average return for retail funds over the last 13-years has been 3.6% and 5.5% for industry funds. Is it possible for retail investors to navigate their way around these funds and take control of their direct SMSF equity investments for themselves and in doing so reduce these excessive fees and possibly generate better returns? The answer is emphatically yes.

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Interview with Nick Radge (by student2trader.com)

Nick RadgeNick, tell us a bit about your history as a trader?
I originally got the bug after watching someone else plot a 5 and 10 day moving average crossover system by hand. I could see how and why the strategy worked, at least in its simplest form. From there I simply progressed through the ranks of working at various banks, both here in Australia and overseas, and taking on the passion. I have now been trading for 25-years, from the trading floor of the SFE to dealing rooms in London and Singapore. I have a passion and work hard at it every day.

You run a service today called ‘The Chartist’, can you tell us more about it?
The Chartist is a technical analysis newsletter and trading system portal. It’s all very good to read books that show picture perfect trades where 100% hindsight has been used, but to see the patterns on the hard right edge, to put a strategy around that and then manage the trade is what we do. The Chartist covers many facets of trading but the underlying pretext is always technical analysis. We now run four systematic trading models that I also personally trade alongside subscribers. The Chartist offers something for everyone interested in active trading without hindsight.

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Share Traders - Your Top 5 Questions Answered

iStock 000007651615 261An insightful conversation with The Chartist's very own Nick Radge

1. How do I identify a list of stocks to work with? It can be done through riding with the clean and sustainable trends. Money can be made by following big swings or trends that lasts six to twelve months in time. This is similar to 2009 trend which are very profitable. Trading for the high beta stocks is also a good strategy. Know that clean and sustainable trends tend to be found to the ASX 100 through 300. Generally stocks under the ASX 100 are too institutionalized. They also tend to become quite choppy and back fill and does not show very sustainable trend. Above ASX 300 tend to become too volatile and illiquid and so you have to be balanced. Those trending stocks tend to occur in small ordinaries. And it's actually getting those newly-establish companies.

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Bang-For-Buck Trade Management Strategy

money blogNick Radge from The Chartist, a stock market newsletter, has been designing stock trading systems for 25 years. During this time he developed the Bang for Buck trade management strategy. In this article, Nick Radge explains why he developed the Bang for Buck and how you can use it to help choose which trades to take.

In the late 1990s, before the days of CFDs, when the market was extremely bullish on the coat tail of the U.S. technology boom I came across the problem of having too many trading signals and not enough capital to trade them all. I needed some type of filter that allowed me to have an educated guess as to which of the stocks might be a better performer should they both be winners. I named the filter Bang-for-Buck and it eventually found its way into the Metastock User Guide as well as several published trading books.

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Women and Financial Money Management

Trish RadgeWhilst it may be a generalisation, too many women leave the family finances to their husband to manage. As a result, if a couple split up, the woman often does not know how to access funds, how much money or assets they hold or if she has adequate superannuation, if any. Whilst no one plans to get divorced, with the Australian divorce rate currently standing at 40% it is wise for woman to play a role in managing the family finances.

If you are in a relationship where finances are shared then it is your responsibility to know what you own, where it is held and the names or entity it is held in. If you allow your partner to manage your affairs, at least get regular updates on your financial position - monthly when the statements come in is a good
time.

Ask questions. Keep a list of all accounts, assets etc in a safety deposit box or a safe, including how to access these if something should happen to your partner.

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Stock Market Training

How much should you pay for a stock market newsletter?Important points to consider if you are going to sign up to a stock market newsletter, advisory service or training course: Value for money. Whilst everyone deserves to be paid for quality services, if a product or service sounds too expensive, then it is. If you spend too much on trading advice, education or training you will erode your trading capital – i.e. your trading account. If a company uses a hard sell approach, you may want to question their validity as well. A quality trading newsletter or trading education service will only need to use word of mouth to get you on board. If their clients are happy they will tell their friends. There is a difference between trading and gambling. Which one are you being taught? Trading comes down to a few very simple rules – you make money when the market is going up, you lose money when it is going down.

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