Trading Techniques   

Common mistakes most investors make

sorry. what is the difference between point 1 and point 2. i tot both are about averaging up?

the problem with averaging is that u incur more brokerage charges than if u buy all in 1 transaction. (minimum $25 per trade)

 

hehe... Point (2) once again reminds me fondly of that great investing dancer Nicolas Darvas, who was a master of the art of averaging up. He kept on buying more and more as the stock goes higher and higher.

 

Good post Livermore!

I agree with points (1) and (3) but not (2) though because that implies averaging and I don't recommend that.

 

As your profit inceases, you can adjust your risk profile upwards.......

 

Just three points on this topic :

1. Stagger Your Purchase 

   It might not be a good idea to buy all your

   shares at one price. Give yourself some "reserves"

   to cover yourself. Let's say you wish to buy

   80 lots, it might be best to "stagger" your 

   buys. Putting all 80 lots at one price, and you

   become very "vulnerable". Just like going to war,

   you don't know how many enemies is lurking in

   front of you, so use your "bullets" wisely. Fire

   all your bullets and you cannot "protect"    

   yourself later. So "test water" first at the

   "right price" (tricky) and if the stock behaves as

   you like it,  then gradually "average up" But

   "averaging up" can be tricky too. In some case

   though you know you have the confidence to buy at

   a higher price as your earlier lots are already  

   "covered" (in profit).

2. Protect Your Profit/Capital

   Let's say you have made $5000 profit, it might 

   not be wise to take up a position  where

   you could lose that profit and worse incur a loss.

   For instance, put in 100 lots at one price. You

   can eventually buy up to 100 lots,

   but it can be done in steps if your stock pick is

   right.

3. Switch Stocks

   If you are holding to a stock that just does not

   seem to move or find it was a wrong buy, you can

   consider selling it at a loss and transfer that

   money to buy something else that will help yu

   recover your loss faster. If you sell share A

   and use that amount to buy share B,

   in effect it is just a "transfer" of money from A

   to B but you just lose the brokerage fees. However

   not many people are willingly to do that as

   they see that as a loss if they do the "transfer".

 

 

When a resource is common to all, we tend to be extravagant in the way we use it for our own enjoyment & benefit. At some point when the common resource has depleted, everyone feels the diminishing benefits.......thus the collapse..........

The limits of the Market is something like adding acid to alkali; you get salt and water. Let say you've a certan amount of alakli and you want some salt, you start adding acid to the alkali, you'll get some salt. If you add a bit more acid, you probably get more salt. But if you keep adding more acid, there'll come a time when the alkali is depleted and more acid will not give you salt. The amount of alkali limits the amont of salt you can get! Not only you'll get salt, it can explode.... 'POP'!

GROW YOUR CASH COW, DON'T MILK IT DRY!!! Cheers.

 

...And slightly previous to that, the mere mention of the Dow ever reaching 3500 will evoke cute scorn, lolling and rolling laughter and sceptism among the 'balloon' crowd... :) 

 

Burst???



Anyone remember that the Dow was at 7000 only 3 years ago?



aND

 

Greed is inherent in all humans. That's why you'll find long Q @ cheap sales and freebies! For me, I trade 'cos I want to have more money in my bank a/cs and of course the more the merrier., and I'm not ashame of my 'greeds' -and I worked for it.Therefore it is OK to be 'greedy' as long as it doesn't hurt anyone achieving them.

Traders are never contented (Players know that) and that's the reason for the STI to keep moving up and up till it bursts. It is good to ride the tide only if you know exactly what you're doing and get it right - not very often such opportunity comes knockings. I've to say it one more time " It is not how many times you get it right or wrong, it is how big is your bet when you're right or wrong that counts! " Cheers!

 

No worries teeth53, most probably there will be a rebound tomorrow for this counter. Then, u will need to choose to bail out of the roller coaster or sit thru it to greater heights.

Current at this point, its just the beginning.

 

Greed and more greed, many of them neber learn from their very own mistaken, i am the 1st to admit myself, can win 9 out of 10 count, then lose to the final 1, (life is just like that). Any one lose on Gen Int'l ??. thru pure speculation or punting...

 

I've trim a little of my holdings in SPC warrants and realise a portion of the losses.(1K plus) The remaining still paper losses. (6K plus).

looking forward to its financial reporting out soon for guidence on what to do next

 

Hey giantlow,

Sorry to hear about your SPC. Don't let others affect your trading. Their style and method may not be suitable for you.

 

experiencing the pain now with my SPC. was too eager to enter the mkt then. I got greedy cos my friend made more than 30K with Capland warrants while I got not zero profits to show.

sigh...

sure. sure. gandalf, if u are reading this post, u are invited to join the Fellowship. pls register at the Shire. haha 

 

keke, giantlow, i presume you, like me, learnt that through experience eh? ;)

btw, i noticed a gandalf somewhere. wonder if we can induce him/her to join the Fellowship. haha. :P

 

elf made a very good point here. dun get caught up in current sentiment, always make your own mind up. cos at the end of the day, nobody is going to help share your losses if u lose money.

 

hi febregas,

TA = technical analysis. ie, using all those charts and indicators (like chaikin oscillator, accumulation/distribution, RSI, MACD) to try and predict the movement of a stock based on its trend. It's more of a mathematical picture of a stock.

FA= financial analysis. ie, prediction of a stock performance based more on its actual fundamentals--like its net tangible assets (NTA), net asset value (NAV) etc.



But there's a fine line between the two, really. note that sometimes FA and TA will clash, in which case, you need to decide buy or sell.



margin--i'm assuming you mean margin accounts? if so, they're what let you leverage a greater amt to invest in, and to short counters. If you mean margin of profit (haha), then it's entirely what you're comfortable with when selling or buying a stock. :)



how to do TA: read singaporegal's article on the home pg. Also, the research section in sharejunction; they'll give you a good initial guide. the rest can be picked up from courses, books or plain ol' experience. good luck! btw, don't get caught up in current sentiment. Always make your own mind up. :)  

 

Hi ppl:

May i know whats TA, FA, and how does things like huge margin got to do with them? yup, i have been reading the post and do not understand. Always when i buy shares i just hear the announcements and not do those analysis, can u all please teach me?

 

Hi ppl:

May i know whats TA, FA, and how does things like huge margin got to do with them? yup, i have been reading the post and do not understand. Always when i buy shares i just hear the announcements and not do those analysis, can u all please teach me?

 

whee...ipunter's back! missed ya. :)

nope, no professional. just a 'beginner' like bunbun. Just trying to make a living. haha. wanna hit financial independence by 35...