April 17th, 2009 by Damian Papworth

One of the things I have noticed during the 20 years I have spent either actively investing in various strategies, or trialing them, is that the ones which make logical sense usually are the ones which work best in real life.

There are so many strategies I’ve tried, I have lost count. And there are at least as many which I’ve let go without trying. There are just too many. I found a quick fire way though which helps disregard the strategies which are useless, so you can trial the ones which are worth trialing. Its logic. Look at the logic of your trading strategy and see if there are holes in it. You’ll be amazed by the number of strategies with big logical holes.

Its quite possible that these strategies, in their wholeness work quite well. But the problem is that if you are trading a strategy which has holes in it, at some stage you’ll come up against a real life situation where the strategy has no answer. Then you’ll be on your own and you’ll need to make a decision outside the strategy. This can be an educated guess, to an intuitive judgment call, to a flip of a coin.

Personally I think that making decisions like this, decisions which are outside the logic of an investment or trading strategy, is gambling. Its not a good situation. Sure you may make money with this gamble, but you could lose it too. Its no different than blackjack. A robust and complete trading strategy should take these gambles away from you. There should be no guesses. You should just plan the trade and then trade the plan.

Also, the point about trialing a strategy is that you are finding out whether it will make consistent returns over the fullness of time. The point about trading a strategy is that you know it makes consistent returns over the fullness of time. If you have had a guess mid way through the strategy, you cannot be confident its the strategy or your guess which is making the money. You will need to start again.

So if you have a new strategy which looks promising, apply your logic to it first. Try to understand all the trading scenarios you may face and ensure the strategy stands up to all of them and deals with them. This simple piece of advice could save you thousands.

And once you have covered off every situation you can think of, always remember to execute a preliminary trading exercise without putting money down. Spend a few months running the strategy in spreadsheets before you trade with money. You’ll be amazed at the real life situations which come your way which you’d never have dreamed of. And you will thank your stars you resolved these issues when you had nothing on the line.

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March 4th, 2009 by India Moon

Do you ever think about what a life without debt would be like? How would you manage with out credit cards, with a paid off mortgage and without any debts at all? How would you deal with hiring a car, booking a hotel room or buying tickets to a concert?

When the financial worries of the global economy continues to be foremost on our TV news each day, it can become really worrying. The recession is continuously blamed for many jobs losses, family homes being foreclosed on, businesses crumbling and people are becoming more and more stressed. The share market has already claimed many victims and for those of you who lost money or life savings there, then you already know what it feels like.

Are you sick of thinking negatively? It only makes our stress greater and drains our energy. How about some positive energy. What can we do? How would it feel if you made a goal to start today living without debt? Would that give you something positive to get stuck into? Would you know how to begin? If not, I can help you with some good ideas

Cut up the credit cards now. Then get into your bank or look online for the best deal in debit cards. With a debit card you can only spend the money that is already in your account. If there is no money in there, then you can’t spend it. Debit Cards are the wonderful no debt way that you can pay for your hotel reservations, you can pay for your rental car with them and you can also pay for necessities with them.

Yes I know you still owe lots of money on your credit cards, its time now to start paying them off. The quickest way to do that is, pay the minimum amount owing on all the cards except for the one with the lowest amount owing. That one you need to pay extra, as much as possible above the minimum. Do this until you have paid the credit card off. Now add the money you have been paying off this card to the minimum on the next lowest balance owing card and pay that one off. Keep doing this till all your credit cards are paid off completely.

Construct a workable budget and stick to it. Pay for things with cash or your debit card only. Save an emergency fund and have goals and save for the things you need.

Living without debt will be so very wonderful for you. It takes away all the stress. It gives you feelings of security, knowing that you are rowing your own boat and are not owing anyone money. You will never be vulnerable again in times of boom or bust financial markets. It becomes a way of life that is so great that I don’t think you would ever want to go back. Enjoy!

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