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.

Business, business;finance, Finance, foreign exchange, FOREX Trading, investing, investment, investment strategies, Investments, money, money management, stock market trading, stocks, trading, trading strategies

December 23rd, 2008 by Damian Papworth

From all of us at The Only Way, we’d like to wish you a very merry christmas.  We hope Santa can bring you what the financial markets didn’t this year.

Lets face it, 2008 has been a disasterous year for all investment markets.  There was nowhere to hide.  So lets hope 2009 will be better.  On our part, we are going to focus on the following topics

• Our FX Trading Strategy -  We are going to start a small portfolio from scratch, trade it solidly for 6 months and offer you the statements for viewing so you can see how it works and the results.
• Stock Market Trading – How do you rebuild your portfolio
• Internet Based Business – Now is a great time to put some extra effort in, bring some extra cash in when you need it most.  We’ll review old startegies and bring you the latest new ones.

Have a great Christmas though, and we look forward to seeing you in the new year.  Its going to be a big one, we fully intend on really working this blog, a minimum of 3 posts a week.  So put it in your favorites

foreign exchange trading, Internet Business, stock market trading