Trading Techniques   

Common mistakes most investors make

You like counters that you can also drink when you are thirsty? hehe.... :)

 

Hi rickytan,

I like counters that are very liquid. This means that there is lots of interest in it. Interest can come from a large number of retail investors or the big boys like you mentioned.

 

Hi singaporegal, thank you for your response. Am I right to say that most of the counters you buy are played by the big boys then ?  Also, does big boys refer to manipulators or including Fund Managers ?

 

tabbycat...

I like to joke... so if you can't stand jokes, I can get lost from here forever.

Do you want me to get lost? 



Coz ... I believe if there's no harmony, it's time to move on. 

 

tabbycat...



If you can't stand jokes you should cut it out...



I was only joking with "Giantlow" being a big boy because his name suggests he is a big boy in size...  :(

No one is suggesting the big boys will come here to waste their time?

 

Hi rickytan,

You'll know when big boys are playing when large movements in volume happen. I have seen some trades where large volumes are transacted with small price changes. The price changes happen only later on.

The Accumulation/Distribution chart takes into account both volume and price changes. Its the number 1 chart I consult on trading decisions.

 

thank you nos, giantlow, ipunter etc. For beginner and novice, how would we know that the big boys are in play of a certain counter ?

 

iPunter, big boys will not have the time to participate in this forum. Hope u understand this. We are here to learn from each others. Please skip the sarcasm.

Cheers

 

iPunter. i am only a small player, not some big boy.

only managing my personal funds

bunbun and analing00, being new brings about fresh perspective, adding a new ideas to the discussions. i am sure we all welcome that

 

hi analing, im also new in here and a 'blur blur' novice in trading. we can all definitely learn from the gurus here.



ipunter: discipline is so much more more difficult to practise when you have the element of greed in it. but having said that, i agree w you (and others) that discipline is important. but it's ever so hard to really practise it, especially when the counter u have went down, and u are holding it 'coz u believe it will shoot up again (then u can break-even or even profit from it). these are usually lousy excuses why it's difficult for me to cut loss.

 

hi everyone..I'm new & must say that I'm quite impressed with the quality of some of the posts in this forum. Hv leant much. thanks! I'm more into FA, so i tend to be cautious when I see prices shoot up without strong basis. Then again, the risk-taking part of me also want to reap it while its hot...(like everyone else.. hehe).  I totally agree that discipline is impt. It all boils down to how much you can stomach.... :)

 

hehe... You are talking about 'market dynamics'... :)

This market action has been existing since the stock market began...

But I believe there are so many big boys (not to mention big gals ;) in the market, albeit of various sizes. (you being one of them... hehe...)

 

I agree that stop loss is important but please beware of market manipulation by the big boys. let me explain

the big boys wants to buy Stock A, but the price resistance is $4.04. and they expect most stop loss orders to be placed at $4. therefore they delibrately sell a couple of lots at $4 or even $3.98. once that happens, a lot of stop loss orders will be triggered. then the big boys happily buy Stock A at a cheaper price. that why u sometimes see a strong rebound without any apparent reason.

like i said before volume is very important when making decisions too

 

You should cut loss when the big boys decide not to ramp it up.

 

It is all too common a fact that many stock market players, even the  seasoned ones, have at one time or another bought a stock only to find it drops immediately. They then exercise their 'discipline' and sell it to save themselves from further loss. But immediately after they sold, the stock goes up. And seeing the stock rise, and feeling that good profits will be missed, they buy in again. Of course, the stock falls again and they sell again in panic onlhy to see it zoom to the sky.!



This is not a joke but something that actually happens again and again as long as there is a stock market.  Studying and following the rules of technical analysis is the only way to overcome such emotional responses.

 

rickytan. basically for penny stocks. the focus is more FA rather than TA. therefore, u should cut loss when the company fundamentals or market conditions change. not when the share price drops 10% or even 20% 

 

Hi All...



You may wish to check out this hardcover book :-



Technical Analysis of Stock Trends



It's a real whopper as it contains the work of three different authors who are pros working in collaboration. This is a gem of a tome any stock market player can't do without.

 

Thanks, Notradamus for the advice.  Actually, a lot of factors come into play. If you pick the wrong stocks and cut loss 10% each time, very soon all your investments would be wiped out. Discipline and skillful trading is the key.

 

Very good post by Nostradamus!

Stop loss is very important for both TA and FA people.

 

Ricky...

For penny stocks which is invariably highly leveraged ie. you buy a lot of it because the unit price is low, it is even tougher to cut loss for the simple reason that the loss is much, much greater than a normal higher priced stock.

Well, if you can't take the potentially big and scary losses, you should avoid penny stocks.