You may be having great success with your short term trading portfolio and have become comfortable with investment strategies. Now you may wonder if you should apply your successful methods to your superannuation fund. Can you treat your super fund and your trading fund the same? What about calculating stops?

Actually those two types of funds are totally different from each other. They represent different aspects of investment trading. One difference is usually the amount of money in the funds. Your super fund probably is much larger than your trading fund. The purpose of the funds is also different.

Even though you wouldn’t want to, if you did lose your trading fund, it probably wouldn’t ruin you financially. Your superfund is different. It is more like a long term investment and the last thing you want to do is risk losing it. Since these funds are so different, they require totally different approaches when it comes to managing them. Actually, the size of your fund has a big impact upon how you handle it. Of course, the basics still apply such as cutting your losses and ramping up profits but you have to adapt the way you implement your strategies so you have the maximum amount of profits.

You want your superfund to continue to grow so that when you are able to finally tap into it, all of the money will be there and you will be financially secure.

The same thinking applies to your stops. You want to nip your losses and let profits run but you approach the two investment methods very differently. The way you apply stops to your trading fund just wouldn’t work for your super fund.

What about the method of calculation for your super fund? Would you use the same one that you use for your CFD trading fund? The width would be different of course, but is the method the same?

Stuart: The same method, no. I use a volatility base for my super fund and a technical stop for my short term trading. Investment trading often calls for different methods to be profitable. We have to be able to adapt our trading style to match our individual circumstances.

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