Trading Techniques   

Words of Wisdom

  Good discussions.



  Yes, a trading plan is a must and next is the execution. Buying is less tricky. Most can follow their plans. It is selling. When it is up, one will hope to gain more but just to see that it goes down subsequently. When it comes down, human psychology is to believe that it will recover. Some time it does, often it does not or will take a long time. So, your limited financial resources are tied down to non-performing stocks. 



Hence, beside having a plan one also must have the discipline to stick close to your plan. This is my experience.   

 

We all make mistakes and that make us all human. Try to learn from your own mistakes and never to repeat them and over times, you'll make less mistakes (doesn't mean no mistakes)!

We're fear only when things are not certain and thus 'blur' our decisions in things we do. To overcome fear we've to eliminate the uncertainty and decision-making would be clearer. It is noises in the environment that makes ones 'fear' even the decision is correct. Therefore, if you really understand what you're doing you should not be fear of anything you do!

There is no Book in the world that could teach you the EXPERIENCES from Mr Market himself. We all learn from the Market everyday...................................I'm still learning .......

 

There are several ways to conquer your emotions -

(1) Do not put all your eggs in 1 basket so that 1 loss will not wipe out all your money - this also reduces your anxiety level
(2) Plan your stop levels before you buy into a stock
(3) Follow the trend... keep a close watch on the trend using TA
(4) Do not listen to rumours. Trust your own analysis

 

Totally agree Nostradamus,

but sometime it's the psychology area that is hard to control. Emotion usually plays the fool ; and I am still trying to gain self control avainst fear and greed,.. it has been very hard.

 

One must have a trading plan before he/she enters the market. Always think of the following before you buy.

• What to buy?

Do your research first. FA or TA.

• When to buy?

At what price?

• When to sell/take profit?

What price to sell? What percentage gain do I want? Set a realistic goal based on your time frame and market conditions.

• When to cut loss?

At what price or percentage below buying price?

 

thanks ong,

I am guilty of this many time. Still have not learn the lesson.

 

Allan hi,

Thanks.  To discuss Rule 3. Let me use an actual eg today Man Wah. I must declared first am vested today  15 lots. So I have vested interest.

The support is 0.42. Once break out, next major resistence is likely to be at 0.61.  Gain more than 20 cents more than 30%.

What happen if the prediction is wrong? Conventinal wisdom suggest cut-loss at 10%.  Hmmmmmmmm,   not so good a strategy. Another strategy

Use nos of bids down for eg. Depending on your risk taking treshold. 5 bids  down, sell everythings. 

Above is juz a viewpoint.  ...........  Others may have differing opionion. Welcome to share. Regards.

 

Hi, Ong, good post.



Of your three rules, 1 and 2 are easier to identify. How do you ascertain rule 3?

 

OngHuiH is right! If you must go against the trend make sure your data are better and the trend is just a 'shot in the dark' ! Cheers!

 

Haha... everyone is guilty of this at some point or another! This still happens to me sometimes when I let my emotions cloud my logic.

 

Thanks Ong,.. I am guilty as charge.

 

Words of Wisdom on Trading

 

• Don?t Trade Against the Prevailing Trend
• Eg, somebody on 30 Aug 06 jumped in to buy Bio-Treat at .84 ?. Nobody knows how low is low. Our mind tell us that is cheap now, so buy! Resist this temptation.
  
• If a stock I trending up -  Buy.  Or average up. Our mind tell us NOT to buy because is getting expensive. Buy high sell higher! Price often move in the same direction for a period  of time.
  
• If a Stock is trending down ?. Sell it ---  or don?t average downwards
  
• Don?t trade unless a trend exist ?? for long position,
• Rule 1: Buy on uptrend.
• Rule 2: Check the chart to confirm is uptrend
• Rule 3: Buy when the stock has potential for at least 5% gain (lower or higher if you prefer). If not, why take risk?
  
• Identify trends using MA, MACD, etc
  
• Have a clear exit strategy ??either to stop loss or take profit.
  
• Don?t allow yourself to enter into a trade where you ended can?t sleep peacefully!
  
• Finally, Happy making money.