The last time Oil was in my portfolio was when I shorted it when price fell from $100 to $30 back in 2014 to 2016. Since then, I have stood aside with price whipsawing within a range.
I prefer not to get caught up with the name of an asset. Gold, Oil, the EURUSD and Tesla (NASDAQ:TSLA) are examples of asset names that people build unhealthy attachments to which leads to losses and disappointment.
Instead, I have a scanning, analysis and checklist system that filters out the very best high-probability assets regardless of name.
The goal as an investor is not to be right but to make profit, a concept that people often overlook resulting in a poorly performing or underperforming portfolio.
It is still very much early days and I am not quite ready to take a position. This is to avoid the potential of a fake breakout and to minimise losses on my account.
Patience is very much a virtue.
Once price has confirmed a bull trend continuation above the 2018 resistance as support, I will then take a small position. My risk is typically no more than 0.5% to 2%. If price continues in my favour, I will then strategically buy more Black Gold. This is known as compounding and how I keep my losses small and insignificant and the upside exponentially higher. I then follow price with a well-placed trailing stoploss which removes all the guesswork out of exiting. This is how you build a portfolio slowly and safely over time but be rewarded with the power of compound growth. As the saying goes, cut your losers short and let your winners run.
I will be applying patience for now until oil meets my checklist.
Zaheer Anwari - Co-founder of Sublime Trading
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