On this page is everything you need to know about how we invest and trade. It is one page, it is simple.
If you wonder if our strategy works, download and check our trade history in our mobile application.
1We are not Forex or Day Traders! We trade indexes like S&P500, HK50, and invest in stocks. We like to trade indexes in particular because they are more predictable for us, move regularly, and historically seen in the long run, indexes move always up. We are passionate about investing and trading but we see it as a side income. It is a hobby for us, a very profitable one. We do not do technical analysis, market predictions, we do not search for stocks to trade every day, because none of these will make you successful. And btw, we trade just on the mobile phone.
2We use a regular investment bank account and a CFD platform for trading. The CFD platform allows us to use leverage but it is not required. Some tradings we practice works best with a CFD platform and we tag these assets in the app. You could leverage day trading brokers or platforms that allows you to trade or invest the same indexes and stocks, as long as your broker does not require high fees. If your broker requires high fees or high overnight holding costs, the way we trade and invest may not fit well for you. We cannot recommend options, as we buy and sell very frequently and eventually hold positions for a long time to result in profit. Additionally, most brokers today provide demo accounts with play money, take advantage of these and see if trading is for you without losing real money.
3We never overuse leverage. For example, if you trade with 1K capital with leverage 1:10, it would allow you to open positions up to 10K. A single position with a 100$ margin would be 1000$ value. If you open a position with your max leverage 10K, you don’t have the room to open new positions in case the market turns in a different direction, and it would not allow you to hold the position for a longer period. We trade already for 10+ years, our accounts are bigger. It allows us to put higher leverage on a single position without risk of our account. This should not discourage you, we also started small. We just had the patient to grow the account. It took us 5 years to make the first 100K. Once you develop endurance the more money you make on your account, the more leverage you could use, the quicker it will grow. Better start small and see if trading is for you, instead of big and losing everything. Note that for our stock picks we never use leverage.
4Never borrow money to trade and generally we do not use more than 10% of our available cash capital. If you have 10K cash in the bank, you should use max 1k for trading. If you have 100K, use 10K for trading. From the available 10% capital, use only 50% to start trading. For example, if your available 10% cash is 10K to start trading, use 5K and hold the rest of the money for margin calls if required, to not lose open positions. Nobody can predict the market and nobody knows what could happen, it may be required to hold some of the positions for longer. Lastly consider that money spend, distance yourself, to learn to control your emotions. When it comes to our stock investments, our general rule is to never put more than 20-25% of the available net worth in single company. We divide the capital and invest it overtime to take advantage of the dollar cost averaging (DCA).
5We never use Stop Loss. We decide when to close our positions. To be able to trade successfully you have to be ready to hold your bet. Trading is betting, if you are not ready for that better don’t trade. Honestly, why do you want to put a Stop Loss on S&P500 long position? This is the most secure type of trade you could execute to date, as long as you don’t overuse your leverage and hold the position, whatever it takes. In the long run, the S&P500 long position should result in profit. Notice already 40%+ from all investments are passive ETF S&P500 Funds (as of 2019). As long as this type of investment exists, it will result in a higher S&P500 index. When it comes to our stock investments, we purchase them usually around resistance levels, and if we decide to invest in a company, we never get out until our investment is not profitable by a good margin. For that reason we try to make sure that we invest it stable value companies most of the time, preferably dividend paying.
6We don’t do technical analysis and other “technicalities” that you probably by now know that most don’t work. For commodity, stocks and indexes trading, the most important factors are: N1- news, N2 – monetary policy, N3 – company earnings, N4 – trends/hypes, N5 – be patient with your bet positions. In general, learn to wait for the market reaction. It is not what you believe, it is about the market to decide.
7We try to never make general market predictions and we do not do daily stock picking. Absolutely nobody can tell you when the market will fall or rise, see section 6. We are not different, we just follow our rules strictly, this is what makes us successful. The only market prediction we could give you: if the market gets too greedy, there is gonna be correction, soon or later. If the market falls, people will see a buying opportunity and there is gonna be pullback up. When it comes to stock picking, there are few people in the world that are successfully doing this and there is a good reason for that. They have connections, have deep knowledge about the business models they are buying, can buy stocks on special preferable conditions and they can hold the stock whatever it takes. We try to learn from them, reverse engineer what they do, understand their actions and see if there is value for us. This information is mostly public.
8Our short positions are speculative. This means they render a high risk to not be profitable. It is a risk we are ready to take, and we hold them as long as it takes to close on profit or with a small loss. If you are not that risk type trader, consider more secure assets, like SPX (S&P500 – aka US500) long positions. If you don’t overuse your leverage, control your emotions and hold your positions, these positions will turn to be one day profitable even if you bought in a bear market. We follow the famous rule: “Buy when there is blood in the streets, even if the blood is your own, sell when everyone is greedy“.
9General rule for all (sell/buy) positions. Our core principle is: we open all our positions in a way that allows us to hold them as long as it takes to close on profit. To date this allowed us to close almost all our positions on profit or with minimal loss. The longest position we ever hold was 1 year. To be able to do so we apply all the rules above strictly. The positions we send in our mobile app are just part of our daily tradings, these are the ones we manage to send quickly, and usually, we consider less risky. Use them for general orientation and as additional sources to make your trade conclusions, but remember we would never be able to promise or guarantee that they will result in a quick profit.
X Risk warning! We will not be liable for any losses sustained while using the services provided on the One Cent Trading applications. This service is not a solicitation to trade signals, nor is the representation is being made that any account will, or is likely to, achieve profits or losses similar to those discussed on the application, services or trade notifications. The past performance of any trading system or methodology is not necessarily indicative of future results.