Investing & Online Stock & Share Trading - The Stock & Share Markets are Booming But Be Warned

I had the pleasure of being invited on a friend's yachtthat we must swallow our pride - an admittedly difficult
to sail in a race on Sydney Harbour yesterday. Onfeat for many traders. Grappling with our own motives
board, as one of our motley crew, I met a top rankingamidst the psychological matrix that is the stock
corporate executive from one of Australia's largestmarket is, to say the least, a bewildering struggle.
banks, who we'll call 'Phil' here for the purpose of thisIn an almost paradoxical fashion the stock market can
article. After the race ended and after being told ofcreate whelps out of us through both our losses as
my trading experience, he told me he has a largewell as our victories. We are unnerved when we lose
stock portfolio, many of which are speculativeand must somehow muster the courage to tentatively
resources stocks. He said that he's excited by all there-enter the markets. Yet, potentially even more
money he's making and wondering how long this hasdangerous are the unbridled successes that often
been going on?distort a trader's perception about their ability to
As would be expected, 'Phil' also asked me for someregulate further success - successes that work to
"hot tips" for more stocks to buy. He was surprisedchide the future admission of failure.
with my reply when I told him Daryl Guppy's standardWho would have thought that winning could actually
response of "Tips are for waiters" and that I thoughtbecome a setup for losing - a conundrum of the worst
he was asking the wrong questions. (Daryl Guppy is akind? I know of no other occupation that has the ability
well known Stock Trader and International bestsellingto masquerade as both friend and foe and then make
author - seeyou think that you can tell the difference.
Rather, I explained he should be asking:Your experience is, I believe, a treasure worth perhaps
* How much longer will this last?more than the sum of your losses. It reminds me of
* When it finishes how will I know & what will I do?how the most seaworthy vessels have typically been
* How do I find out about Technical Analysis andknown to be the ones that have weathered the most
Money & Risk Management?devastating storms. Yours is a stellar effort, my friend. I
* What's a Trading Plan and how do I put one togetherwill most certainly be purchasing your book.
and follow it?Thanks also to Daryl and Alan for their assistance and
* How and when do I add to the stocks I alreadyencouragement in helping to mould John's encounter
own?into the best trading tool of all - practical experience..."
* How should I structure my portfolio regardingDuring 2001, not long after losing our home, we made
individual stock risk, sector risk and total portfolio risk?contact with Daryl and I take this opportunity here to
* What's my exit strategy for each stock I own?acknowledge and thank him once again for his wisdom
* What's my exit strategy for my whole portfolio?and support since that time and also to Alan Hull and
* How do I keep accurate records and monitor myDr Van Tharp since then. Daryl subsequently invited
performance?me to write a short article for his regular weekly
* What am I going to do to learn more about myselfnewsletter (Tutorials in Applied Technical Analysis)
and my own psychological weaknesses (many ofwhich became the first of many articles as my wife
which I may not even realise I have) that can make allAngela and I began our search for education.
the difference as to whether I win or lose long term?He made a strong point that by concentrating on the
'Phil' was genuinely surprised that I had taken the windresearch needed to write the articles we would pick
out of his sails - luckily it was after our sailing raceup good habits and through sharing with others, we
together, but hopefully before he loses his ownourselves would be more inclined to stick with the
financial race.discipline involved in the subject being covered.
In January at I issued a worldwide press release toWe have recently collated the articles I have written
caution unprepared novice investors and traders of thefor his newsletter and they are now available as 'The
potential pitfalls ahead in the market. My wife AngelaAtkinson - Guppy Articles - Stock Market Educational
and I lost our waterfront home on Sydney Harbour inOptions for Investing Online & Online Trading -
the 'Tech wreck' of 2000, so we speak from hardOpportunity for a Home Based Business'. Most of
personal experience.these articles deal with concepts and trading skills
As complete novices in the market in 1999, wewhich are still relevant to readers today and include the
doubled on paper a large stock portfolio in only sixfollowing:
months. Then in less than a year we suffered* CONDITIONAL STOP LOSS ORDERS: A real life
catastrophic losses in the tech stock crash of 2000comparison between using two brokers for monitoring
and beyond:stop loss orders - the true cost of slippage
* We were set back more than 15 years financially* DIRECTORS DEALINGS: A snapshot study of the
and emotionallyAustralian share market to determine, if by monitoring
* We were forced to sell our waterfront home - thethe purchases and sales of company directors with
very same house we had set as a goal soon aftertheir own shares, whether it is possible to obtain an
arriving in Australia as new and penniless immigrants ininsight into the future direction of the share price and
1979. We began renting what I called a 'dog box' - ashitch a ride in the right direction - or jump ship with
the housing market then rocketed.them.
* Angela was working as a retail assistant* EXPECTANCY - the net profit or loss that you can
I have a First Class Honors Degree in Civil Engineeringexpect over a large number of single unit trades. A
that didn't help. In fact I have since come to understandseries of articles with thanks to the work of Dr Van
that it actually helped to work against me. With ourTharp, author of 'Trade Your Way to Financial
experience of riding some of the largest waves (upFreedom'
and down) in the market and having lost hundreds of* TAKE-OVERS: A brief overview of some of the
thousands of dollars in the process, we know morestrategies traders apply to take-overs.
than most stock traders in the world of the pitfalls that* AVALANCHE SELLING and KANGAROO TAILS: A
await unsuspecting novice traders and investors.series of articles on the recent phenomenon in the
We have since greatly appreciated being exposed toAustralian share market caused by computerised
the successful methods taught by expert traders Alanautomated conditional stop loss brokers savagely
Hull, Daryl Guppy, Jim Berg, Dr Van Tharp and otherscascading sell orders into the market, with prices often
to trade profitably and with better risk control.rebounding several percent within minutes
The forum for serious investors is the only chatroomThrough my writing articles and through our site, my
where you will find Daryl Guppy. We recently receivedwife Angela and I now aim to provide a 'Road Map of
the following response from a fellow Australian traderDiscovery to the Stock Market' to help new and
Nathan Unger on that site (see below):existing online investors and traders find the trading
"...thank you for sharing. Your comments on this subjecteducation information they need to initially survive the
are very insightful, and rightfully so considering yourpitfalls ahead, then to thrive in the market.
near trading death experience, per se. Failure is alwaysWe wish you every success in 2005 and beyond and
such a difficult moniker to be branded with, for ittrust that if you haven't done so already, you will be
involves us having to acknowledge that we wereseeking out the answers to the questions I offered to
wrong. Of course, acknowledging our mistakes meansmy sailing team member 'Phil'.