Stock Trading System-PLAN To Succeed…

By Dale Gillham

One of my early mentors recently asked me to speak on the secrets to share market success for the Geelong Central Rotary Club on the 14th October. Besides my excitement about being able to speak in my home town, the topic was also very exciting to me as I find most people investing and trading in the share market do not have a stock trading system or even any form of system.

Investing simply and profitably in order to have a good lifestyle is something many may aspire to achieve, however statistics indicate that few actually do. When I first heard this many years ago I wanted to know why so few achieve success and how I could help change it. After countless hours observing successful investors, along with those who tried and failed, what I discovered really surprised me. One of my findings I will share with you now.

Those who were successful had a plan (or in others words a successful stock trading system), and those who failed didn’t. Investing is about managing risk and those who failed had a tendency to make decisions based on a knee-jerk reaction to news and information. Their way of investing was in complete contrast to the successful investors. Investing greats such as Warren Buffett advises to do the exact opposite of the masses, meaning get the knowledge and follow a plan.

So the secret I will talk about next month for Rotary is that research has shown me how time and again that long term success requires a strategy, complete with a step by step approach to making decisions and managing risk.

Want to learn how to buy and sell shares at the right time? Looking for a successful stock trading system? Check out the Your Trading Mentor video lessons

So what do we expect in the market?

This week the Australian share market continued to fall below short term support at 5500 points to around 5400 points. History shows how the Australian share market typically falls for between four and six weeks into its yearly low before finding support. Since the peak in August, the market has only fallen for a period of four weeks and therefore I believe the next one to two weeks could see the market continue slightly lower before buyers return to take advantage of cheaper prices. This decline does not change my 2014 target of between 5800 to 6000 points for our market, however, it does signal a time to exercise a little more caution.

Interestingly, lower share prices have seen the Price to Earnings ratio (PE) for many companies also fall. Currently the market average is at around 15, well below the level where our market may typically correct. Stocks in sectors such as Materials, Retail and Financials are moving into undervalued territory and suggesting there is some good buying to come.

all ordinaries index image 19-09-14

To your profitable trading,

Dale Gillham Chief Analyst Wealth Within

Dale Gillham, ‘one of the country’s most respected analysts’ (Wealth Creator Magazine, Nov/Dec 2004), sought after key note speaker and author of the best selling book ‘How to Beat the Managed Funds by 20%’. Dale has assisted thousands of traders and investors to learn to trade shares and become confident and profitable in their direct share investments. Tired of an industry saturated by quick fix gimmicks and expensive short-courses, Dale co-founded Wealth Within to provide ‘ real education and ongoing personalised support’, as well as independent investment advice to traders and investors who have become disillusioned by the market for one reason or another. As testament to this, Wealth Within launched Australia’s first and only nationally accredited Diploma of Share Trading and Investment.