Robbie Burn’s Trading Diary
The company also seemed to be saying it was unlikely it supplied much else horse flavoured stuff. So. in essence, withdrawal of the sauce meant little to the company’s overall performance. 30% fall? Way too much, I reasoned, and I bought tons and tons on spread bets with various companies in the 80s and some for the ISA too. I figured at the very worst a quid would be a fair price, but actually no reason why the price shouldn’t at some point head back up towards its highs again in time. The price gradually lifted up and it’s back to around a quid as I write this. Profits? Around ten grand. Though I haven’t banked them yet as I write. However, the next thing to do is raise the stop loss up and over break even at the very least, maybe into profit, so stops up to 90p, carry on raising if the price keeps going. On the initial bets in the early 80s I placed stops at 78p - worst came to worst I knew I would then only lose small amounts if the price kept falling and I could start again. Amount of work I did to make these paper profits? Well, very little really. In fact it was all just a bit of common sense. No complex technical analysis etc. needed.
If the price heads back up to the highs of 115 I will probably bank most of the profits and… erm… cheer myself hoarse... So, moral of the story is that with good discipline, bad news can make you serious money. But give yourself rules and boundaries. Make sure you understand the company and are sure as you can be that it has been oversold. The good news is these days bad news companies almost always bounce back because nearly everyone uses stops and they get hit. If you buy the bad news share and it keeps falling, set a tight stop, try again lower. You must make sure you are not catching a falling knife which continues to fall. If you got in near the bottom and it goes up, raise your stop under the price. Keep buying as it heads up. Keep raising the stop. Right, nuff from me for this month, I’m starving — I fancy a steak... nice and rare ... ** Robbie offers Spreadbet Mag readers who have not yet booked a seminar with him a £50 discount on either of his next two seminars, March 1st or April 26th. Email robbie for details at robbiethetrader@aol.com with “SB mag offer” in the subject line. ** The seminars involve spending a whole day with live markets with Robbie and are suitable for beginners and improvers. **
March 2013
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