Good Lesson Learnt on My CFD Trading (Shorting)

Disclaimer: The information shared below is not a recommendation to buy or sell. Readers should not copy any strategy here because everyone has different trading psychology, greed and fear threshold, holding time frame, risk tolerance and perception of the market direction.  The information shared below is not a show off and BS that I am a guru. I am just a ordinary retail investor or trader who just started using CFD to short the stock market recently. My portfolio is a snapshot when the profit is the maximum. I have closed some of the positions when I write this post. I have shared what I have done wrong of my past trading and this post is to share what I have done right. I am using this opportunity to document my trading strategy so that I can continuously improve my win rate and consistency.

First time to see my portfolio all green when the stock market is red…. i.e. I am shorting the stocks. (Sell High First, Buy back at low later). What I have done right:

  • Study the stock chart and candlestick everyday after market close. Note: I am not using MACD, RSI, etc technical indicators to time my entry. These Technical indicators are lagging indicator.
  • I pay close attention when the stock price trades close to the resistance level and starts to turn down. I also look at any “gap down” oppportunity to short the stock.
  • Only enter a trade where there is a clear chart pattern or candlestick pattern.
  • Always calculate the profit potential vs loses risk before entering a trade. Profit Potential must be bigger than Losses Risk.
  • I set stop loss for EVERY trade. I get burnt many times when I did not set stop loss in my past trades. Setting stop loss will let the machine takes over my emotion when the stock price does not go towards the direction I am hoping for. I am very disciplined this time to let the machine to “auto-close” my trades.
  • I analyse the chart every day and review my stop loss. I move my stop loss to protect my profit and make sure I don’t lose money as first priority. It is OK not to make money in a trade but never lose money. Always remember Warren Buffet’s Rule #1: Never Lose Money, Rule #2: Don’t forget Rule #1.
  • I set my profit target in every trade but monitor closely everyday if there is trend reversal candlestick. I will close my position immediately if there is a reversal pattern.
  • Be VERY Discipline and follow through trading plan as much as possible.
  • Let trading plan to take over my emotion.
  • It is not possible to 100% get all the trades right. I have learned how to lose small money consistently for wrong trade and make more than 50% profit for right trade.

Welcome for any additional comments to help me to improve my CFD Trading.

Is Warren Buffet Conned by BYD? 比亚迪或已亏损“巴菲特”还能高股价吗?

Interesting article on BYD (a China Stock which Warren Buffet has invested one or two years ago).

作者:荷叶

比亚迪(002294)13日发布半年度业绩预告,公司预计上半年净利润约1.21亿元至3.63亿元,比上年同期下降85%至95%之间。原因解释为:受各业务销售收入下降的影响,公司毛利率有所下降。资料显示,该公司2010年度净利润下滑33.48%,2011年一季度净利润下滑84.35%。比亚迪今年一季度实现净利润为2.67亿元。两个数据对照可知,比亚迪二季度开始或已亏损。

二级市场主要乘用车上市公司股价与市盈率II比较
公司名称     股价     市盈率II【倍】    增长率【%】
上海汽车    18.15          10                             12
一汽轿车    14.53          12                              0
东风汽车    4.55            14                              15
长安汽车    5.21             8                               -20
海马汽车    5.17            15                              20
一汽夏利    8.41           18                               -30
比亚迪     31.51             141                          -80

综合比较不难看出,比亚迪股价高的离谱,3-5元,应该是比亚迪的合理股价。那么,为何能形成如此扭曲的价格呢?因由可能有三。

一 王传福是金融造势的高手。你去汽车市场走一走便知,比亚迪充其量不过是个三流汽车厂商,无论从历史、质量、外观、性价比等等,它的车普普通通的三流车。而它吹的最响的就是研发新能源电动车,只要稍稍动脑袋想一想便知,国内外著名的汽车厂家,那家不在研究新能源汽车呀?而实际产品几乎都比比亚迪强的多!但是,比亚迪叫的响亮,连巴菲特都听见了,国内业界和普通百姓都能耳熟能详。就是它业绩连续跳水至-84%,证监会还是批准它上市。这点,不得不佩服王传福,是个少有的金融造势高手。

 

二 股民盲目崇拜洋股神。美国股神巴菲特投资比亚迪了,中国亿万股民无人不知,无人不晓。甚至谈经据典,必请巴菲特。普通股民更是将其“贡”在大脑中央,事事请示对照。冷静的思考一下,巴菲特是人,不是神。年度平均收率也只有3成多,国内很多高手远远超过他。众人只看到了他成功投资的一面,忽略了他失败的阴暗。巴菲特只是“美国牛市”造出来的英雄而已。应该客观全面认识巴菲特,学其所长,切勿崇拜!

三 市场机构“借尸还魂”。巴菲特一顿饭都能卖个几百万,巴菲特的比亚迪为何不能大赚一把呢?!一顿饭的钱有购买者来支付,购买者的钱和利有市场来买单。说到这里,大家应该明白,这个把戏,都是在玩“借尸还魂”的骗术而已。成就的是“傻瓜遇到骗子”的“小说”。

股海无师市为师,勤奋耕耘收有时;
量变质变规常在,刻舟求剑人成痴。