Trading Techniques   

Common mistakes most investors make

US$ 90 abit high, wait till mid 2007, US economic mkt is weakering.

 

Yup... even now its at the US$70 levels..... come winter season, it will cross US$90 ???

 

Crude oil price broke the US$75 barrier. We are still 6 months before year end of the winter season when oil price usually go up

 

Hi Singaporegal,

Hey thanks for your reply:). Hm... Advanced Holdings on down trend huh. Ok, I have to monitor closely now. I wish I could learn some chart analysis from you.

 

Bad habit always have to be learn the hard way and alway neber change, alway make a come back, like greed and dream on hope.

 

Hi Livermore,

Sorry! I don't really use that email very often. I only check it once every few days.

For Advanced Holdings, this is my personal opinion. I think its on a gradual downtrend now. The volume is pretty ok but it doesn't show particular interest in the stock.

 

Hi Singaporegal,

Hey did you receive my e-mail? As I was telling you earlier, I am eyeing Advanced Holdings. I have only one stock in my portfolio and it is Advanced Holdings. How does the chart look like?

SPC is a cheap stock but priced too high. Watch SPC.

 

One not so cheap stock i can think of is interra Res, i think it hit it peak of $0.60 cts where some ppl got stuck here at this px b4 it come down, trade at ur own risk as oil px will remain high and even higher d next round.

 

Bottom fishing seem over liao, now bargain hunter is on going, have a good hunt, pls do ur home work 1st and do be over come by greed.

 

Hey Livermore,

So which oil stocks are you looking at now?

 

Hi Irene,

If you are serious about investing, it would be good to read the business times every day. Sometimes you have company write up or you read articles that can roughly tell you what is going to happen in the future. You just cannot find these articles in the Straits Times. Having more knowledge would be better apart from research reports

  

 

I am most bullish are oil related stocks. Oil price shall stay high until 2010 as new refineries will only come online in that year

 

Thanks for sharing Nostradamus! You've done a great deal by contributing to this forum.

 

Hi IreneL,

Oil prices reached a record high of US$75.40 a barrel. So maybe can buy oil & gas stocks. No doubt they have run up, but should still have 5-10% upside.

 

Trading in Stocks is all about common sense and experiences that money cannot buy!

Never, never put good money into a bad stock that's going from bad to worst even if the px drops 90%. Therefore, it is always better to free-up your capital early and 'bet' on a uptrend stock. Opportunity gains are very important in Trading (no matter how small is the gain). Never go against the trends unless you're a very savvy Trader!!!!!!!

Remember the vast ocean is make up of many tiny drops of water! Cheers!!!!

 

Hi Livermore,

Good point. Thank you for sharing.

 

If you think logically if you sell a stock A and use that money from selling stock A to buy another stock B, it is effectively the same and you are merely "transferring" the money from stock A to B, You just lose the brokerage fee.

This should be done if you are holding on to a losing stock. But somehow some people may not see the logic of this move as they think if they sell a losing stock it is a loss and they continue to hold on.

 

Hi Irene,

George Soros and the greatest stock trader of all time, Jesse Livermore average up. Jesse Livermore never averages down. But I think maybe we can be a bit flexible on this.  Maybe after your first buy and the price drop, have a 10c difference before you average down and only minimal lots of say 5 lots. If you can see the chart and it is near bottom, the share price is "cornered" when you employ this strategy. But if after averaging down one time after a 10c difference and it still drops, then cut loss. I only buy more lots when the price starts to move up more. That's when margin trading comes in useful. But after a stage, I stop averaging up. There is not much risk as my earlier lots are all covered and in "profit region". If for some reason, after averging up the price drops, I can still sell off the earlier lots and not lose money.

My concern is on determining and have a confirmation that the price is moving up.

 

10. Paying too much attention to insider selling



Treat insider selling as a secondary market indicator.
For decades, people have spent endless time and energy searching for an easy way to time the market.



Oscillators, sentiment indicators, and insider selling gauges have all been treated as reliable primary signals to buy and sell at the right time. Yet instead of making investing easier, such methods often complicate matters. Worse, some of them can backfire.



Looking at insider selling trends over 2001-2002 would have led you astray more often than not.



Insider selling refers to selling done by company executives and registered holders with significant percentage of shares. Market pundits often use insider selling data to make market predictions. They interpret light insider selling as bullish and heavy selling as bearish.

 

This method has at times accurately predicted the market's behaviour. The readings appeared as bullish through much of the bear market, especially in late 2001 and most of 2002. Yet the STI plunged during that time. Over the last six months, the ratio has spiked to levels not seen for more than a decade, thanks to continued selling and bone-dry insider buying. Yet the major indexes have all surged during that time.



In the past, if you look at it in conjunction with other indicators, it's worked pretty well. Now, it's murky. The Fed policy, fiscal policy, cash on hand, where we are in the election cycle, all these things indicate a market moving higher, and it has moved higher. Insiders could also be selling to lock-in their profits of shares which they bought at a low price. The insider indicator is flashing a bit of a contrarian signal.



Always let the price-and-volume action of leading stocks and the market itself be your primary guide. Anything short of that should be treated as a secondary indicator at best, worth a heavy dose of scepticism.

 

Hi Livermore

Many thanks for sharing.

It never occured to me in the past, but at least now I am aware of averaging up.