Trading Techniques   

Trading Mistakes

Ahhh... :)

I find these last few posts by both mirage and ten4one really good stuff...

It is good to bookmark this section for future reference and benefit...

This is where you may find your secret of stock market success!.

 

ten4one,

I agree with you, 7 of 10 decisions you are right, does not necessary mean you will win, provided in terms of monetary terms you win a substantial amount. It depends whether they are big wins or small wins, but I am sure it is better than you lose 7 of 10 decisions.

 

ten4one,

I agree with you, 7 of 10 decisions you are right, does not necessary mean you will win, provided in terms of monetary terms you win a substantial amount. It depends whether they are big wins or small wins, but I am sure it is better than you lose 7 of 10 decisions.

 

Mirage, When you're right 7of10 in your decisions, you're 70% right and that doesn't mean that your're Winner 70% in monetary term! Your winning depends on how big is your bet when you're right and same goes with when you're wrong. You may end up poorer even you're right 7 out of 10 times.

I'm very very happy if I could manage a 6/10 correct decision. A 50-50 would be satisfactory. All said , it all depends on your strategy on how you play your hands will finally determine your Win or Loss. Cheers!

 

As I mentioned before, ask yourself how much paper profit you have and what is your share positions now. For instance, if you have $10k profit on share A, and 50 lots in share B at break even price and 50 lots in share C at also break even price.



To me, that is not managing one's risk profile. One market crash and all is gone.  

 

Paper profits may turn to paper loss.

Sell when it had reach your target price or you have made a profit of more than 15%, whichever is earilier, SELL.

Sometimes ppl say ride the profits, but the higher you at the top of the wave, the deeper you fall.  We must have a trading plan.

There's a saying " If you fail to plan, you plan to fail" Just my opinion only.

 

One has to be discipline not to over expose yourself even when you are having paper profit.  I kept repeating the same mistakes. Now to avoid this mistake, I don't buy so many stocks. It is easier to focus.



I learnt something recently. I was in paper profit during and after the market crash but I still got a margin call. Now I learn that even if my leverage increases as my profit grows, I cannot overbuy.

 

The first part to learning from mistakes are to acknowledge that you made a mistake.

Many people, including myself, are sometimes unwilling to belief that they made a wrong decision in a trade. This kind of stubborn pride costs you money!

 

Hi IPunter,

Hey no problems:). You have mastered the TA part and if you can try to find at least one good stock to hold for long term, I think you will make more profits.....  

 

Livermore...

Thank you for the valuable insights... :)

 

Hi IPunter,

Yes, one has to pick the right stock. A lot of hardwork has gone into reading about companies etc. No shortcut to success for me. But I think hope you will at least keep one stock for long term.


The funny thing about the stock market is we tell ourselves "learn from our mistakes" but sometimes it is not as easy as it seems. I kept repeating some mistakes and after a while, I got it right:).



There are patterns in the market. Some can see it after some years of experience but some still may not see it after years in the market.



As Jesse Livermore once said that the patterns repeat itself over and over again because human behaviour do not change

 

Mirage...

I agree with you on that... :)

 

Hi iPunter, Sir,

Of course, if ppl treat the stock market as a "casino" (gambling), either DOUBLE or NOTHING, then, once they make a "mistake" then, they will be 'financially handicapped'.

I am talking about "investors in the stock market". We are learning everyday, when we make decisions about our investment, either buy or sell. Many SJ forumers are learning through this forum. If you make the right decisions 7 out of 10 decisions, you are a WINNER (70%).

Many ppl don't "punt" in the stock markets, they only "punt" in casinos. This my personal opinion only.

 

Livermore, sir... :)

You are quite right that one can at least hold a stock that one has bought cheaply eg. when it is consolidating on an uptrend phase. In this regard, one has to be a good stock picker too to pick the right stock that will go up without a major correction along the way.

As for the comments raised by others about needing to make mistakes to learn...

it is my opinion that once one is financially handicapped, it can be for life... very similar to the resulting permanent humiliation one gets when physically handicapped.

 

The biggest mistake is not making any MISTAKES in the first place! Cheers!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Nonsensical but very true! hahaha!!!!! YumSeng!!!!

 

The greatest mistakes is "we didn't learn from our mistakes"

We must consider " what are the lessons we can learn from these mistakes, and make effort never to make the same mistakes over again and again. "

What are the lesson learnt. !!!!!!!!!!!!!

Failures (mistakes) are the stepping stones to success.

 

The biggest mistake is not making any MISTAKES in the first place! Cheers!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

 

I mentioned that managing one's risk profile is one of the most important thing in share investment. Someone who uses a leverage tool like margin trading may not neccesarily mean he is not managing his risk profile. In fact, a person who trades in margin can even manage his risk profile better than someone who pays all his shares in full....



Think about it........ 

 

Hi IPunter,

In my earlier posts I mentioned one should try to establish the buys with the stock coming from a consolidation phase. The risk is much less. Once you have established your buys, and it "takes off" you just hold it for long term for stocks you think have potential growth in the future.



I know you are a TA person. But maybe you can least hold one stock for the long term. For the rest, you can continue with your TA. The rewards will be much better.

 

It is very true to say that money is almost guaranteed to be made if one is a long-term investor in a particular stock, since in the long run almost any stock rises in price terms.

But in saying or thinking so, one does not take into consideration the reality (ie. in the real world) of holding stocks as a long-term investor. In other words, is it really so simple as to  just hold a stock  for a long, long time? What about during the periods of downtrends? Is it so easy to live though them. In the reality of living life (which concurrently includes the activity of share holding), it is much easier said than done, due to the many variables in life one has to deal with.