Chapter 6Planning, monitoring and reviewing online
Now you've investigated the online brokers available in Australia, made your choice of the one (or ones) you'll use and organised all the details, you'll no doubt be itching to start trading. Before you do so I strongly recommend you develop a trading plan. In this chapter I discuss how you might go about this and what factors you need to cover in your plan.
An essential part of your planning is to consider how you will monitor (or keep tabs on) your trades and the performance of your portfolio. In this chapter I discuss how you can monitor online and hopefully improve your performance so you can make more profit from share investing as time goes on.
Methods of online trading
There are essentially two methods of online trading, which may be termed ‘impulse’ and ‘planned’.
Impulse trading
The impulse (or ad-hoc) trading method is as follows:
- You receive a trading stimulus that may come from a number of sources, such as an article you've read on a website or in a paper or magazine; the advice of an adviser, friend or associate; a tweet, blog or chat room message; or a media news report.
- You consider this stimulus to decide whether or not you'll act on it. The amount of consideration you give it could vary from almost none to a thorough investigation of the stimulus using fundamental and/or technical analysis.
- You act on the stimulus by placing a trade order with your online broker.
Planned trading
In the planned method ...
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