With over ten years of experience in stock trading (at the same time, I believe that this is a relatively short period, since trends can last indefinitely, an example of this is the decline in the Japanese stock market from 1990 to 2008 year), I would like to share with you my observations and thoughts.
Many people belittle or completely deny this or that approach, especially often on the Internet you can see disputes on the effectiveness of technical / fundamental analysis. I think this is pointless, and here’s why:
By and large, most strategies imply a retrospective analysis, that is, we strive to draw a conclusion based on the fact that has already happened or was in history, in other words, we look in the “rear-view mirror”. For example, when analyzing financial statements, someone plans to find an investment object with a potentially high yield, calculating various financial ratios or expected dividend yield, but at the same time forgetting the fact that soon the situation may change dramatically, due to a possible changing situation as in a single company, and in the whole world. If you do not admit that you are wrong in time, you can get stuck in a negative deal for a long time or even lose your investment. From which it follows, in my subjective opinion, the conclusion that the main thing is to limit the loss in time and strive to hold a profitable trade as long as possible! What many already know about, but not so easy to do from a psychological point of view. Exactly psychological factor is one of the key in exchange trading, and in order to minimize it, you need to have a specific decision-making system (determining the volume in a deal, choosing a specific instrument, opening / closing a deal and much more)
About diversification… in fact, the wider the diversification, the lower the portfolio risk profile, but thus the potential profit is also limited. Many people do not correctly interpret this term, since they add assets to the portfolio that are similar in properties / direction, and miss the point that in the correct distribution of assets, it is important not only the number of instruments, but also the correctly selected correlation (inverse or completely lacking as such) between them.
In general, I think that it doesn’t matter what strategy / approach you use, I respect any method in trading. If you manage to take profit from the market at a distance, then you are doing everything right. It’s like in medicine, it is difficult to be a professional in all areas, and there are a lot of them, so doctors, as a rule, are determined with a specific narrow specialization!
As for me and my current view of the market, I can say that the main stake this year has been made on commodity assets. The silver deal has already brought multiple profit on the invested amount, as I have already published here earlier. I continue to hold the silver, expecting an update of historical highs in the future 1-2 years. Also, the natural gas deal has already brought 80% of the profit since the opening of the deal in April, this idea was published in his telegram channel.
Good luck to everyone and a passing trend!