Podcast: It’s not ok to just be your best

Simon BrownJSE Direct, Latest

Simon Shares

  • Woolies* (JSE code: WHL) update is same old same old. Local food doing great, fashion okay and Australia still under pressure with the refurbishments due to end March 2020.
  • Brait (JSE code: BAT) announces a large recapitalisation with a cR5.5billion rights issue at a 27% discount to the share price and about 60% new shares. This is also a massive discount to net asset value (NAV) which is now 3800c and a share price at decade lows. Christo Wiese will not take up his rights, rather Ethos Capital (JSE code: EPE) will and they’ll become about a c15% shareholder.
  • Transaction Capital (JSE code: TCP) monster results. Very strong, double digit everything. This was one of the stocks Petri Redelinghuys picked on my Small Cap Portfolio show recently (along with Jubilee Metals (JSE code: JBL)).
  • British American Tobacco (JSE code: BTI) update was good in all areas and margins are growing. They do however warn that e-cigarette sales growth to hit low end of target.
  • Charles Schwab is taking over TD Ameritrade. Not surprising after Schwad cut brokerage to zero, and everybody else was forced to follow suit. It’s now a game of size. More clients, more cross selling, more interest turn etc. Bigger is way the way forward for now.
  • Understanding the Krugerrand Custodial Certificate
  • Creating returns in a low growth world
  • Upcoming events;

* I hold ungeared positions.

It’s not ok to just be your best

“It’s not ok to not be the best trader you can be…..it’s NOT OK” Mike Bellafiore

You have to be better than your best. You have to continually be getting better. There is no rest for traders. We have to be always improving. Trading is largely a zero sum game, you have to better than the others.

‘ve often stated that any trader who thinks they have arrived as a trader will swiftly be shown the door by the market. It is a continual process of improvement and caution against believing our own hype.

So, what do you do in order to always be improving? The easy answer is a trading journal that you keep and a constant reviewing of your trades.

  • The journal would include trade details, but also what happened post exit. Your perfect trade score and how the trade felt.
  • It would also include the entry and exit which you’ll be able to review. Did you jump too soon? Is this a frequent problem? If so what are you doing about it?
  • Are exits a problem? Taking profits too soon? Ignoring stops? If so what are you doing about it?

For me personally I have a journal and track my perfect trades. But as I also only trade for about 10-15 minutes after the 8.30am futures open, I’ll often record my screen while trading and I review these videos.

The review is not only checking to see if my entries were good (exits are either at target or stop so automated and not important for this process). Did I get in timeously? Or late or early?

Am I missing information? I am watching the bids/offers and last trades, so not a lot of data. But I can miss data as I move between screens (trade, orders, chart, depth, etc.).What I find at time is that I take a long trade, for example. And it was right, but as I was entering the trade it switches to neutral or even short and I miss that change.

  • It’s almost as if I am rushing, scared of missing out (or paying a higher price). So now I have a process. I set the trade screen. But as I go to click ‘trade’ I run my eyes over the bids/offers a last time to make sure I am on the right side of the trade.
  • My other problem is I flip between the different screens too much. I really only need to watch the depth and last trade screen (which is same block for my platform). But while waiting I get restless so I am flipping around for no real purpose. The solution here is easy.

Close all the tabs/browsers and also get rid of all other data on my trade screen, except what I need – depth and last trades.

Point is alway be improving. Alway be checking in on yourself. Always be striving to be better every day.

My last point is to always remember that trading is like a high wire trapeze artists without a net or safety harness. We get no second chances. We can do 99 perfect trades and then 1 horrid trade gives it all back. As a trader we need to be 100% all the time. Not 100% in terms of profitable trades. 100% in terms of perfect execution every time. Because one slip and our money pile is back at the beginning, or as a trapeze artist, we a pile of broken bones on the floor.

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JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

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