Guaranteed way to make a profit...

Anonymous Guest's picture
Submitted by Anonymous Guest on Wed, 2008-05-28 01:25

I believe I have found what Capitalists have been seeking for centuries, namely, a guaranteed way to make a profit.

One of my major activities is trading the Australian Sharemarket Index, (a delightful activity done more for the adrenaline rush it gives me than anything else), and although known as the ASX200, for futures it is called the SPI200.

Each day the NZ brokers I use post a "SPI report" on their website, and the Sydney Morning Herald also has a similar Sharemarket index report on their website.

The chap who writes the "SPI report", (who will not be named in this post), is a splendid fellow, always great to talk with on the telephone.

He and the Sydney Morning Herald chap have one thing in common....they are always wrong, and therefore the secret to guaranteed profits is to read their reports and do the opposite.

Yesterday the ASX200 closed at 5714.5 points, and the futures at 5733.

Here we have this morning's SPI Report ...."A very low volume day finishing flat. Commodities sold with BHP also down 81c in NY. High AUD with help the inflation picture but commentators are still suggesting the RBA will raise rates another notch soon. So with NAB and SGB yet to ex-dividend one could conclude that we will be pretty range bound around these lower trade levels. A 20 point rally will have us at 5746 which is where we are likely to kick-off. Sell the rally at 5760 but watch BHP as the lead indicator into lunch"

Needless to say, with gold, oil and other resource markets having gone 'tits up' overnight (our time) one wonders who would write such a report?!?!

At about the same time the headline on the Sydney Morning Herald website business section said "Stocks picked to rally" ...which was all I needed to read.

When the market opened at 11:50am NZ time, I unhesitatingly sold the SPI200, to the horror of the broker on the other end of the telephone, and was filled at 5734 and as I write this it is sitting at 5673/74.

Congrats chaps ...this is the 19th day in a row you have gotten it wrong Eye

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I have never traded Forex

Elijah's picture

I have never traded Forex and would not have a clue.

Olivia enjoys that sort of thing and may be able to assist, but with any market you should stick to supply and demand fundamentals rather than going off on 'systems' and tangents.

The problem with trading forex is it is difficult to ascertain supply and demand for currencies ...for instance, the Yen vs Canadian dollar...if you do not live in either country and have never been there, which is why it is an activity I have always avoided.

Bollinger bands' standard deviation

Ptgymatic's picture

As you are so generous in sharing your knowledge of investing, I will venture to ask you if you have an opinion about setting the number of standard deviations on the Bollinger Band indicator, when used in forex trading. I've come across a system called "Dad's Legacy" that recommends using only one standard deviation. What do you think?


Those of you who are

Elijah's picture

Those of you who are regular readers of my weblog will know I include a daily advice post on trading the Australian Sharemarket.

Generally I get things right, and, indeed, there are two people who have emailed this week delighted at how successful they have been in following my suggestions.

In the original post on this thread I included the 'SPI Report' for that particular day to show how you can be certain of profits if you do the opposite, and today is a classic example.

Here is the 'SPI Report' today...(and contrast this moaning minnie nonsense with my own views on the day ahead on my weblog, posted before the market opened)...

"..Quarter end rally as the Banks all had soothing words out of this UBS conference. 4% rallies in that sector took me by surprise so with the events overnight there will be blood in the streets today. With settlements now for July 1st we could see a poor bid tone today. BHP is down 3.4% in NY at $42.45. The banks could easily loose yesterday’s goldilocks rally plus some. Sell rallies of 20 -30 points if we get them. Friday could be ugly at the close should things stay brittle now that we also break perceived support levels. Cash and energy shares/futures are the only two asset classes I wish I owned..."

All I can say to that is..ummmm...XXX..(I promised not to reveal the name of the 'SPI Report' writer)...if you took your hand of your genitals for a minute, and engaged in 'reality' rather than wishful thinking, perhaps you would be a bit more accurate Eye

The market, as I predicted, opened well down and then rallied about 110 points (as I write this) reasoning for predicting that was quite simple: the World is not going to end today...(sorry to disappoint you)

And as for the moaning minnie "I wish I owned energy stocks"  tommy-rot...well...gosh...perhaps you could sell everything else and buy energy stocks? only spend 9 - 10 hours per day in front of a computer, so to do so would only take you all of..ummmm...4 seconds.

It is just astounding as to how much some people get paid, and how some professions (such as sharemarket analysts) are so highly regarded! Sticking out tongue

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