On: June 12, 2015 In: Blog, Columns, Expert Advice, Feature, Most Popular Comments: 0


Get to know your fellow traders. YTE speaks to trader Neville Harris

How and when did you first become interested in the markets?

I first became interested in the markets in the early 1960’s. A fellow student at the time owned shares in Mt Isa Mines, which was going through intense industrial disputation. We shared stories of up and down price gyrations with great interest. Now, it’s nice to look back on a passion that has spanned over 50 years.

And then what happened?

I commenced work as an engineer. In those days I would obtain the closing prices from the evening newspaper and hand draw the price movement onto foolscap graph paper. I did this for approximately 10-12 stocks for about 12 months. I was located in a small country town and access to a full service broker was through long distance phone calls from a red PMG telephone box two streets away. At the time, this barrier limited my ability to place trades, although I continued to chart stocks as an interest.

The only investment during these early years was in the Company Staff Superannuation scheme, where a compulsory 5per cent of salary was deducted. This 5 per cent contribution was matched by the employer. (Note: It was a time when junior officers did not have a telephone on their desk. Also, calculations were done by logarithms, slide rule, and occasional access to a manual or electric Facit calculating machine).In the early 1970’s, Poseidon Nickel discovered a large deposit and the price of nickel skyrocketed. Other companies in the area went up in sympathy.

Being in a capital city, I started buying these miners and followed the “bubble”. Fortunately I sold before the crash. This was a complete fluke, and on reflection I concluded that it was not the way to risk my “life savings”. I also had some more passive investments back then. I found a “fee for service” advisor who recommended a number of managed funds in local and international shares, property and fixed interest.

How were you able to learn and educate yourself about the markets?

Newspapers were the main source of information with a little help from the public library. In the 1960’s I bought Edwards and Magee’s Technical Analysis of Stock Trends 5th Edition. At the time it was extremely expensive and cost $16.50. I see today that Edwards and Magee sells for $165.00 per copy. As my market knowledge improved, I came to the realisation that fund managers were not in my best interest so I became a trader in my own right.

Did you make mistakes when first starting out?

Absolutely. I made many mistakes in the early stages of learning. Although, even today I still make what I call ‘trading errors’, fortunately the frequency has reduced greatly.

Would you define yourself as a discretionary or mechanical trader, or a combination of both?

In recent years I have become more of a mechanical trader. This is a direct result of executing Share Wealth Systems, SPA3 trading system.

Can you give us a brief overview of your trading style?

I have been completely focussed towards trading shares on the ASX and NASDAQ and I use the SPA3 Trading System to guide my decision-making. SPA3 is a technical analysis rules based trading system that has been exhaustively researched by Share Wealth Systems. I have been a customer of Share Wealth Systems since 1998 and I’m a strong supporter of Gary Stone and his team.

Is there any one trade (win or loss) that had a profound effect on your development as a trader? If so, what did you learn from the trade?

Once The SPA3 system told me to SELL. However, I didn’t and it resulted in a 75 per cent loss. This trade has had the most profound effect and taught me the biggest lesson. Now I exit when the SPA3 tells me to. I have also traded options in the past. I realised that it was greedy and costly to not close a weekly option position when it was prudent.

Can you tell us about your best and worst trades? Lessons learnt?

I mentioned the worst trades above. The best trade was a beauty. I executed a SPA3 trade on the NASDAQ that returned a 150 percent profit in just 15 days. Such a large return in a single trade is rare but it’s the reason I use SPA3 because it finds stocks that I otherwise would not.

Would you classify yourself as a short term or long term trader? What advice would you offer to people getting started as traders on the relative merits or otherwise of each?

I was an options trader for many years and I would classify that as short term. My equity trading is more medium term. I would encourage new people starting out to find a trading system, formulate a trading plan, and follow your rules.

What markets do you trade and which markets do you prefer? Do you have a favourite and why?

I currently trade the ASX and NASDAQ although I am about to abandon the ASX because there is a much broader scope of opportunity in the NASDAQ market. I’m also mindful that my NASDAQ returns have been performing much better than my ASX returns.

What makes your trading style different from others? What sets you apart from other traders?

I’m not sure. I am a systems trader so I simply follow the rules of my system. I also decided to buy a system from a reputable vendor rather than building my own. I think these are the two main choices for system traders.

Do you have a favourite rule?

All the rules are important, however, the most important one is managing the risk of the trade once it is open. So nowadays I focus on following the rules and when the system says sell, I sell.

Ed Sakota says, “Everybody gets what they want from the markets.” What do you get from the markets?”

Besides being a passion and hobby, trading has also provided me with a retirement income, for which I am grateful. I can only hope that my passion helps me in retirement for many years to come.

Has trading affected your lifestyle?

Generally, yes it has. Not so much my ASX trading, which is executed during the day but I tend to rise early in the morning to see the close of NASDAQ.

What books, seminars and courses have you read and attended and which would you recommend?

Over the years I have purchased books from Weinstein, Pring, Van Tharp, Douglas, Guppy, Bedford, O’Neil, Nicholson, Tate, Harper,

Cohen, Bernstein, Thomset, Dent, Benklifa and Natenberg. I am also an avid reader of trading and finance articles, which I generally find online. Over the years I have attended many training courses by Gary Stone and Share Wealth Systems. I have also attended courses by Louise Bedford amongst other broker type seminars.

What does the future hold for you?

Hopefully, many more years of learning and applying the knowledge.

I have gained in order to benefit from the markets.

I believe that if I stick to my rules, my pension will continue togrow and allow me to live a comfortable life.