Tuesday, March 24, 2009

Learning the Rules of a Capitalist Society

I'm so sick of LOSING! It's not who I am, and I will not and cannot accept it!

2008 wasn't such a great year for me in various speculating and investing activities - I had lost over 20k in playing poker, over 40k in realised loss in trading cfds and currently a unrealised loss of 55k from one bad stock tip.

I've decided to make amends for such erratic decision making and this blog is one of the tools that will help achieve a better framework for decision making.

My goals for this blog are as follows:

Goal
To make 5000 "trades"; capital risk transactions which can include trading/investments/speculations/bets in any markets, asset classes or capital gain or income producing activities. The goal is to not lose this initial capital and to analyse and capture as much positive expected value trades as possible - i.e not go broke.

Starting Capital
5,000AUD

Strategy
- Preparation and Framework: Intense study in all types of theory of investments/speculations: with a key focus on technicals and macro analysis for trades and fundamentals for investments

- Money management: apply a consistent management of risk to each trade, not risking more than 10% of capital in any trade

- Execution: before execution, to carefully detail the assumptions and hypothesis of each trade

- Commentary: to analyse each trade and to comment on my discipline for each process and the outcome

Psychology
The key to this exercise is not because I want to make money but to become a more disciplined and thoughtful capitalist and to broaden my knowledge of all capital markets and provide a better BS filter for all the media and outdated investing methodology.

The conviction I have is that through 5000 trades, the application of discipline, preparation and execution will be the 3 key areas of development whilst searching for and maintaining an open mind to all areas of capital accumulating opportunities.