29 Mar #TradeMyWay: Traders share their secrets to success
In sharing their trading successes, and failures, the winners of the iTrade #TradeMyWay competition reveal the reality of DIY trading which is not about getting rich quickly but a long-term commitment to taking control of your own finances.
Lesson number one: Beware the sales pitch
Any company, course or individual who tells you that they can reveal “the secrets of the market” or make promises of massive returns are lying – the only guarantee is that they are making money out of you. Investor Peter Imrie shares his story of nearly being ‘conned’ by a company selling a computer based trading programme.
Once he started to ask probing questions the salesperson became evasive and dismissive. Unable to provide answers the salesperson eventually fell back on the usual threat that Peter was missing out ‘on an opportunity of a lifetime’ and should stop wasting their time with questions. As Peter reflects “It was at this point that I realized this was some sort of scam and they were more interested in their commission than having my interests at heart”.
Lesson number two: You have a lot to learn
The worst thing that can happen to a new trader is to make a lot of money on their first trade. This can create a false sense of ability rather than accepting that sometimes you just get lucky. Fortunately, trader Derek Bester had no such experience, losing the first R10 000 he invested and then the next R15 000 taught him an important lesson – it is not as easy as it seems and one needs to do some decent research including a lot of reading and creating a trading strategy. He acknowledges that “you will never learn all about the markets in your lifetime” but he has created a free webpage to help young people get into trading www.zoclee.com. Trader Vutomi Chauke writes about her trading successes by keeping up with daily news, research and valuations and committing to watching online videos everyday so that she keeps learning.
Lesson number three: You can practice without using real money
Whilst you are still learning, you can test your skills out in the virtual trading world. Trader Mark Schwartz shares his story of entering the iTrade Fantasy League and how he tested out his technical analysis skills in the virtual competition, winning it in 2013 and then taking third place two years later. This gave him the confidence in his skills to start his own fund and work for himself. Using a virtual trading platform like iTradeGlobal is a great way learn about trading without any financial commitment or protentional losses, and practicing on it is as easy as child play, as this author discovered when she learnt a thing or two from her teenage son.
Lesson number four: It takes discipline and commitment
Like Mark, dentist turned trader, Alok Khadaroo made trading his full time career. However, he acknowledges that it takes discipline and commitment and is not an easy career choice. “Unlike the many unscrupulous gimmicks you hear, I know that trading is certainly not a quick way to make money. The true question is – if it was so easy, then why aren’t there more multibillionaires? The truth is that it is hard work”. Alok believes everyone should create their own trading plan which takes their personality, lifestyle, work commitments, knowledge, skills and family commitments as well as capital into account.
Lesson number five: Don’t live with regret
Alok also writes about how to handle losses and to know when to take a break from trading. But handling losses is also about letting go of the past and the “what if” moments. Investor Tim O’Hagan shares his wonderful story of receiving Naspers shares as an employee and how the profits enabled him to buy a car for his daughter. He is able to celebrate the memory of his daughter’s joy while acknowledging that had he held onto those shares they would be worth R10 million today.
Lesson number six: The rewards are worth the effort
While trading may take discipline, learning and commitment, farmer Andries Helm who started his own retirement fund at the age of 70, shows that building your own portfolio and taking control of your finances can be both financially and emotionally rewarding. Investing R50 000 he grew that quickly to R80 000. Later when he sold his stud farm he was proficient enough to add some of the capital to his own portfolio but also decided to spread his risk by placing some in a managed portfolio. “Although the past two years was not very favourable, my investments did much better than the money I invested in deposits”.
View the original post on Maya’s blog: Maya on Money.