BLY Trade

BLY (Boart Longyear)is a current open trade in the SMSF portfolio. I really like the look of this trade. Notice how after my buy signal prices pulled back for 4 or 5 weeks but volume decreased. As prices have moved up, volume has picked up. I also like the large saucer bottom prices have made over the last 10 months or so. Open profit of 45% is good, but it is nice to get a few 100% gains as these are the ones that make for a good year. Having said all that, I know anything can happen!
Fundamentally, the reason for the price rising appears to be the fact that Borat(I mean Boart) has secured funding from the banks and won't actually go broke. Small comfort if you bought in at $2.50+ as it currently is trading at 44 cents.
I am not going to post any performance figures yet, as the SMSF portfolio is too new. Total 8 open positions, nothing stopped out since portfolio started in early June.

Why do my trading systems work?

LNC (Linc Energy) represents the good, the bad and the ugly in terms of what can happen when you get involved in the markets.

All you super experienced share traders can turn off now - the following is a basic explanation of what all share traders are trying to achieve.

For the buy and hold investor it has been a roller coaster over the last two years and at the end of the day you have lost a lot of hair but made nothing from holding LNC except the lost opportunity cost of your cash.

My system has had two buys/sells in this period - you can see the signals on the chart above. Each bar on the chart represents one weeks trading, so there is no screaming hurry - unlike the emotive images that share trading conjures up. The first was a profit of about 110% in 10 weeks and second was a loss of 35% in 8 weeks. This actually illustrates exactly why trend-following systems work.

It is a matter of capturing a few big winners and limiting the losers and being able to withstand those periods in the market where there is no trend direction. Historically most of my systems have winners that are 4 times the size of the losers and with about a 50% win rate. It's like having a coin that pays $4 for a head and 1$ for a tail.

That's it! Not quite because you have to find the keys to the kingdom first and then have the patience, perseverance and risk tolerance to see it through.