The Art of Investment Trading
If you are having good results with your trading portfolio should you consider using the same techniques with your superannuation fund? What about calculating your stops? Do you do that differently with your super fund than you do with your trading fund?
Stuart: I appreciate where that person is coming from, but to me they are so different, two completely different aspects of investment trading. Probably the biggest difference between the two is the amount of money in both. I have a lot more money in my super fund than my day to day trading fund. The purpose of both those funds is so different.
If you were to suffer extreme losses in your investment trading fund, you wouldn’t be happy, but it shouldn’t ruin you financially. However, when it comes to your super fund, the last thing you ever want to do is lose it because it holds your financial future. You should take a conservative and defense approach to managing it. The amount of money in your investment accounts plays a big role in how you handle the accounts. While the basic rules of investing apply such as cutting losses and running profits, you must adapt your approach to protect your account and reap the maximum benefits.
You want your superfund to continue to grow so that when you are able to finally tap into it, all of the money will be there and you will be financially secure.
The same thinking applies to your stops. You want to nip your losses and let profits run but you approach the two investment methods very differently. The way you apply stops to your trading fund just wouldn’t work for your super fund.
David: Are you using the same method of calculation on your super fund as your CFD trading fund? Obviously the width is going to be different, but are you going to be using the same method of calculation?
Once again, your superfund is handled differently. You probably want to use a technical stop for your short term trades and a volatility base for your super fund. Long term trading and short term trading need to be handled differently in order for the long term fund to be profitable over time and to meet your individual circumstances.
Category: Finance
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