Big, Medium or Small Caps?
Every year the list of companies on ASX changes. Companies are added, taken over, revert back to private ownership or go broke. It’s the latter that is of most concern and while usually it is companies at the smaller end of the market that suffer this fate, mid and large capitalisation stocks can also go broke. Over the last 12 months we’ve seen a variety of companies go out of business. The list includes an investment bank, property trusts, mining companies as well as stocks from other industries both big and small. So the size or the sector a stock operates in does not guarantee how a stock will perform.
Different payoffs: While it’s not unusual for a share to double in value over a year or two it’s usually small to mid-sized companies, not large caps that are capable of such moves. The catalyst might be a discovery, a major contract win or being acquired. So the potential for a bigger payoff than a big cap stock attracts investors to lesser known companies.
Your choice as to where you invest or trade will be influenced by a variety of factors. Size of the stock may be one of them but opportunities exist at all ends of the market
Charts, Broker Research, & Trading Rules
How people trade is a personal one. For chartists it’s all in the chart. That is every piece of information that can affect a stock is reflected in its price and therefore a study of the chart is all that matters. Study of charts is well entrenched with its origins dating back a hundred years. Today trading software comes with a variety of charting methodologies that can be overlayed the stock price.
Broker research is usually confined to the top 100 stocks on ASX. It looks at the fundamentals of the company, its markets and valuation. Like charting most trading software also comes with broker or fundamental analysis. And just as there are investors that use charts exclusively there are investors that prefer to read balance sheets or research as the basis for their decision making.
Putting it all together for many share traders means combining both charts & research with their own trading rules. Once again these are many and varied but include rules to do with money management, profit and loss targets, length of time one holds a stock to name a few. |
Mar ’10 - In this episode of Becoming a Successful Trader, Jeff Bryant from HomeTrader details the advanced strategies of Short Selling.
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04/03/2010
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04/03/2010
Mar ’10 - In this episode of Becoming a Successful Trader, Jeff Bryant from HomeTrader details the advanced strategies of Short Selling.
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03/02/2010
Jeff Bryant from HomeTrader shows how to use back-testing to validate the effectiveness of your Trading System before you commit any funds to the market.
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31/12/2009
January '10 - Jeff Bryant explains how the HomeTrader system selects, monitors and closes trades.
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01/12/2009
December 09 - Jeff Bryant from Home Trader explains how to time your exits and increase the average size of your winning trades by locking in profit with a trailing stop loss.
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03/11/2009
November 09 - Jeff Bryant from Home Trader explains how systematic trading is NOT about picking winners - but rather, using the principles of sound risk management & trading arithmetic to deliver positive results.
/get_flv.aspx?media=Edu_HomeTrader_L_031109.flv|Edu_HomeTrader_M_031109.flv|Edu_HomeTrader_H_031109.flv&content_type=Education&date=20091103
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01/10/2009
October 09 - Jeff Bryant from Home Trader talks about what’s involved buying & selling shares - different order types, when and how to use them.
/get_flv.aspx?media=Edu_HT_L_290909.flv|Edu_HT_M_290909.flv|Edu_HT_H_290909.flv&content_type=Education&date=20091001
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01/09/2009
September 09 - Jeff Bryant from Home Trader talks about the criteria a stock should meet before you trade it.
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31/07/2009
August 09 - Jeff Bryant from Home Trader explains the elements involved in creating a successful & effective Shares Trading Plan.
/get_flv.aspx?media=Edu_HT_L_300709.flv|Edu_HT_M_300709.flv|Edu_HT_H_300709.flv&content_type=Education&date=20090731
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01/07/2009
July 09 - Jeff Bryant from HomeTrader uses Nobel prize-winning research into Behavioural Finance to illustrate why we need a Trading Strategy to stop us from cutting profits short.
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01/06/2009
June 09 - Jeff Bryant from HomeTrader provides a brief history lesson on corporate failures of the past and explains why adopting a trading mentality is key to achieving above average results.
http://www.finnewsnetwork.com/asxgen/get_asx.aspx?media=Int_HTrader_290509.wmv&content_type=Education&date=20090601
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