What Kind of Trader/ Investor Are You? - A Trader’s Experience

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To figure that out one has to throw an awful lot of mud at the wall and that can result in losses.  I don’t think the process has a shortcut; you just have to do the time and hope that you find, chance-upon, discover a method that works for you and makes you money.

With regards to me, I started investing in New Share Issues in the 90’s and for a while that’s all I did. I can’t remember why I stopped but that sort of fizzled out, perhaps wrongly.

I got into techs and learned some hard lessons.

Then I flirted with ‘blue-sky’ - oh I don’t even want to go there and nor should you, unless you’ve got bags of money and bags of time. TDM, MDX, algorithms for sirens and even deck-chairs. Oh, brings back bad memories…purge purge purge.

Then I started buying value but I didn’t have the gold touch, nor did I have patience or conviction so I tended to buy high and sell low. Doh.  Not a happy time.
Then I leaned towards growth because it’s so tangible you can almost touch it.  Is it hard to find a winning sector and winning stocks within a sector…it’s not.

Along the way I got caught up with technical analysis, allowing myself to be convinced that there was a black-box solution to the trading challenge (I wanted to say problem but that would have been so 1980’s).  But I found no such solution and, like Richard Farleigh, I have yet to meet a wealthy chartist. Well that’s not true, I’ve met plenty but they all sell their services via newsletters/seminars and the like.

Did you know that The Society of Technical Analysts has ALL their money in cash and doesn’t trade it!? Laughable or what. I digress. So I settled for a simple use of charts: to confirm a trend and to give me advance warning where the hoi polloi might enter and exit. Add to that a dollop of moving averages and the RSI (I have no idea, I just try and not buy a share when the RSI is less than 50) and that’s as much use as I can find for them.  Cycle man determined to convert me so I remain open-minded.

So in the time-line we’ve gone from 1990’s to May 2006 (I started this for real in Aug 2005).
And after much messing around I was left with a chart with a trendline and a liking for growth stocks. Hello momentum. And that light came on about July 2006.

Then I happened to have a long discussion with some nice chaps about market-maker stocks and that got me thinking about how one could sway the odds of trading in one’s favour.
…and so I became a momentum trader of small-cap stocks.

Well…that was until small-cap stocks stopped moving.
But that hasn’t been a problem because I just took a deep breath and started looking for things that are breaking out.  I’ve posted re CAB.

And as soon as I am sure we are in a bear market I will start to short but I really need to see that downwards trendline confirmed first because I don’t want to get caught up in all those short-closing rally thingies.  So I suppose my trading style is sort of evolved and continually evolving.

So I would say that everyone has to find his own path.  To figure out what sort of trader/investor you are you need to throw an awful lot of mud at the wall and that can result in losses.  I don’t think the process has a shortcut, you just have to do the time and hope that you find, chance-upon, discover a method that works for you and makes you money.

Read more on Andy’s spread betting journal at http://www.financial-spread-betting.com/

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