It may seem obvious that if you take a 5% loss, you'll need just over 5% return to recover your portfolio.
But as you lose more, you'll need to recover exponentially more than the actual percentage lost.
Traders call this series of consecutive losses – the drawdown.
Many traders just don’t think about what they’ll need to recover during a losing period.
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In early July this year,
I announced the demise of the South African rand. At that time, the currency was trading at R13.00 per US Dollar.
With the economy shrinking 0.7%, the petrol price jumping to R17.00 per liter and added pressure to emerging currencies led by the Turkish Lira and Argentina Peso, the rand has been hit hard.
Today it will cost you R14.40 for j... ››› more
It is every trader's goal to be able to accurately predict where markets are heading.
And it's been my mission this year to find a reliable indicator that can predict where the JSE ALSI Top 40 is headed.
After plotting a whole bunch of indicators, relative strength oscillators and indices, I think I've done it.
And it's all thanks to Japan.
Today I'll discuss this predictor, wh... ››› more
Q “First of all, a bladdy well done on the accurate Brent Crude prediction article Timon… It hit the $80 in just a matter of two weeks.
I missed the entry as I was already holding a number of stocks but I can't wait for the next prediction. Where do you think the Brent Crude price will move from here?”
A. The target was simply based on the falling wedge analysis. Basically, when there ... ››› more
For the past 16 years I've followed a strategy that's yielded a 60% win/rate on average.
This means every 10 trades I take, I can expect to bank 6 winners.
This year, it's been different.
In fact, it's been one of the most difficult years to profit from the JSE as the market has remained inside a tight sideways range.
Last week, it got to the point where I started to worry about m... ››› more
For the first time in 19 years, Africa's biggest grocer (Shoprite) reported its first annual earnings decline.
With the Listeria outbreak, the higher fuel prices, the increased VAT, the ongoing strikes, 489 armed robberies and the ever-weakening rand this decline was inevitable.
Even Chief Executive Pieter Engelbrecht mentioned “the toughest (year) that I can recall”.
In term... ››› more
For the last four years, this index has been sitting in my “TBTT” (Too Boring To Trade) list.
It's done absolutely nothing but consolidate in a sideways trend since 2014.
Until last month… where it broke out of its chains and started an entirely new trend - up!
This is now one index that's no longer too boring to trade- I see some significant profit opportunities lining up.
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Take a look at this chart...
See the big fat flat red line – that means the JSE is going nowhere fast. There is no strong rise or fall. In fact, you might say its flat lining.
For a trader, we call this a sideways market and this is the perfect picture.
Above is the daily JSE All Share Top 40 Index chart since January 2018!
Anyone... ››› more
Whenever I hear a trader uses the averaging down strategy, I cringe.
Averaging down for a trader means they'll buy more shares at a lower cost to drop the average price per share in the belief that ‘when' the share price rises they'll make more money.
The problem with this is when the share price keeps on falling, the trader stands to make a much bigger loss if it keeps moving against h... ››› more
So far, we have covered two out of the three ingredients McDonald's uses to remain one of the most successful companies in the world.
If you missed them – Click here for article #1: Simple
Click here for article #2: Consistent
In today’s article, we’ll go into more detail about the third ingredient to their success.
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In the last article I told you that McDonald's used three main ingredients to become one of the most successful and profitable companies in the world.
Simple, Consistent and Profitable.
If you missed the first ingredient to success article – click here to catch up.
In today’s article, we’ll go into more detail about the second ingredient to their success.
*... ››› more
37,000 stores in over 120 countries. Now that's a success story.
To think that McDonald's started with two humble brothers, creating a one simple but revolutionary concept.
The Speedy Service System - to have food orders ready in 30 seconds rather than 30 minutes.
This took the world by a storm.
The beauty about McDonald’s trading success can be summed up in three words:
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If you're serious about making a consistent income trading the markets, you're going to need this.
This year, I have already given you trading strategies, money management rules and high profitable trades you can use when you trade.
But no matter how many tools, rules and strategies I give you, without this one formula you won't succeed as a trader.
I'm talking about…
... ››› more
Q. “I want to manage my money correctly with every trade I take with Red Hot Storm Trader. Timon can you briefly tell me what your most important money management rules are when you trade?”
A. For the past decade, I’ve followed the same three rules to make sure I protect my portfolio from going bust and to maximize my profits.
Rule #1: Never risk any money you can't af... ››› more
Once a year I see, what I call, a free-money opportunity.
I’ve seen three of these ’Free money’ trades, since 2016.
The first ‘free-money’ trade came in 2016. You could have bought the stock at R61.18 on 25 January 2016 and closed it at R70.00 on the 16th of May for a 144% return.
Then came 2017, where the same stock brought about the same ‘Free-mone... ››› more
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