This blog is geared towards improving my trading knowledge and recording my trades. I am not licensed to give financial advice. Trade at your own risk. It is your fault for losing in this money game.
Monday, June 20, 2016
Financial Farmer
Lately I have been thinking about how I like to enter fairly long trades which may last a few years or so. To me it is like growing trees. I plant a seed or branch and wait. I may water and nourish it for a while to get it going but at some point it will look like it is growing well. This is like the period when Im buying low. Eventually i may dig it up and sell the whole tree but if I have several trees growing they will be sold at different times. This is like me having several trades going. That is basically my diversification and it would create a fairly stable capital gain income. I want to plant a row of trees and eventually I will expect to sell a different one each year. Right now I only have two trades going but I may enter a third trade next year depending on if China starts moving up. If China does go up overall, then I will stop buying DFEMX and just wait to sell it. At that time I could buy something else that is down. I have heard of a trader comparing their style to being a farmer. I am not sure if it exactly how I am looking at it. Over time I will look forward to adding more and more trades. I should get to the point where I am always about to enter something new and exit something old. I am not there yet. I am still just buying more and more of one thing until I am forced to buy something else. That probably won't happen again. I have two trees on my farm. My choice of seeds are limited but I may look into opening a Traditional IRA if it would let me buy a better variety of seeds/industries. I will worry about that a little later. It will be a nice problem to have.
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