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things every retail investor/trader should know

 

You can see some stocks that were around 60+ cents past few weeks have not moved down as fast as those above $1. 

 

Livermore is right... :)


When small losses turn big, the person becomes even more angry at the market...

And thus wants to 'take revenge' on the market by holding until it goes up.

This is a natural  emotional response... one that is not easy for the average person to eliminate. 

 

Yes, reading from the posts here, when your losses become big, it is hard to cut loss. Then the loss gets bigger and bigger 

 

hahaha..

 

Can traders buy at bottoms and sell at tops?

 

LOL

 

I said stocks 'go up an down' till eternity... not trade sideways...

You already understand the concept of cycles...

 

agree, will fall back, no choice, cycle ma.... but each peak is higher then before =) thus, rebuking ur earlier statement that stocks trade sideways until "eternity" =)

waste of life or not, hard to say, dun think buffet is wasting his life....

ur last statement is pretty true to some types of ppl....

iPunter      ( Date: 11-Sep-2008 17:00) Posted: You are making the mistake of thinking that getting to a higher peak a few years later equates with it remaining at a high price... The fact is that it may rise to a higher peak than before. But after it has achieved that higher-than-before peak, in all probability it will fall back to a very low level in the ensuing bear phase... Thus to spend one's life riding the market roller coaster is a waste of life... And since no one can predict the future, it is better to reward ourselves when a good fat profit is already achieved in a specific time-frame...

 

You are making the mistake of thinking that getting to a higher peak a few years later equates with it remaining at a high price...

The fact is that it may rise to a higher peak than before. But after it has achieved that higher-than-before peak, in all probability it will fall back to a very low level in the ensuing bear phase...

Thus to spend one's life riding the market roller coaster is a waste of life...

And since no one can predict the future, it is better to reward ourselves when a good fat profit is already achieved in a specific time-frame...

 

i think for the average person, most prob can outlive a 5-6 10year cycle (wha if u dun have then very sad leh). sounds pretty good to me =)

investing is adopting a long term view anyway... speculation is a whole diff story...


pretty contradicting yourself (to me), you say stocks move sideways on a long term basis, yet u agree that stocks do rise over long term periods (just that ppl might not be willingly to wait that long)...

 

You are getting the idea... :)

How many 30-year periods do we have in our lifetime? Or for that matter, 10 years.

People can wait that long, but they definitely won't be very happy or cheerful while they wait...

 

i guess your version of the STI trends sideways when u view it in 10-30 years time frame ?

iPunter      ( Date: 11-Sep-2008 16:04) Posted: Thus it is obvious to me that people still argue emotionally that stocks can only go up... I mean, there's no need to be emotional about anything... It is a simple fact the stocks go up and down ...  until 'eternity'...

 

Thus it is obvious to me that people still argue emotionally that stocks can only go up...

I mean, there's no need to be emotional about anything...

It is a simple fact the stocks go up and down ...  until 'eternity'...

 

Hihi,

Can help to prepare me for SPC and Ezra ? ( Shocked till no feeling already )   =D

elfinchilde      ( Date: 11-Sep-2008 15:11) Posted: btw, who needs support levels for counters, just lemme know. if nothing else, at least one can be psychologically prepared for lows rather than being shocked each time. (pls don't give a list of 10+ counters tho. haha). cheers!

 

Elfin... :)

I suspect you only play one side of the market ie. only buying, and then take the loss when it goes down.

Thus I can't understand why you choose only to bear the pain but not experience the joys when the  stocks go down. For a senior player market veteran player like you, it really puzzles me why you only play long all the time when beautiful opportunities downward are in abundance all this while (already about 6 months) ! ...

 

There is no need to cut if your time frame is 3 yrs or so. Buy progressively over time with proper money management.  Buy good ones like capland, singtel, smrt, comfort etc. and sit tight for the harvest few years down the road. You can sleep well!! Remember you need to put aside emergency cash as well (typically 6 times  your income).

You can only do short term trading if you are full-time. (I suppose many in this forum are actually full time, looking at the way you all trade...LOL). Well, i'm not and need to go long term. Even if i want, my pockets are not deep enough. I suppose need quite a lot of bullets to cushion any lossess... scary for me.

 

btw, who needs support levels for counters, just lemme know. if nothing else, at least one can be psychologically prepared for lows rather than being shocked each time. (pls don't give a list of 10+ counters tho. haha).

cheers!

 

yah. in a way, although the $$ loss is a lot, as investors we should be thankful for the lessons learnt. if the market had just been a bull throughout, how many of us will learn proper money management, and risk management, and about ourselves: what loss we can really afford to take, as opposed to just *thinking* about it.

more often than not, what i realised is this: most people will say that they can take loss, but when real loss hits them, they can't. and they hold on. that's how big losses happen.

So for the punts that i had called (both died, of course.) but you can see how the s/l saves, which was why i had repeatedly emphasised that make sure you can take the loss first, and that the s/l was the most impt.

Anyway, since we're here:

logic for the two scalps, and why one calls those levels:

NOL: because its NAV is US$1.38, and its 66% temasek backed. 202 was also the lowest it had dipped to. so compared to other prices, it was a 'safer' level to buy for a long. And likewise, a cut was entailed at below that, 1.98, since it'd mean support broken. Trade was scuttled today because UBS is the BB shorting this counter today. But we'd cut anyway, because never go against a foreign BB.

YL: because 1.34 is its Nov 06 support. ie, there was a probability of rebound from there, and because the s/l is tight, if you had played it, your losses is only in the hundreds. Risk reward was about 1: 1. So that's ok.

Longer term: It's right now hovering 1.26 or so because this is the second of its supports dated from Sept 06. Final support is 1.08, from its Jul 06. Longer term still shows downtrend intact. if you're waiting to average in, you may like to wait longer. be psychologically prepared for a low $1 level though. note yl has a backer. i don't know who, but they have one.

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oh believe me, during this past year, i've cut loss like nobody's business. it hurts each time. but now, when i look back, i can only be glad that i've cut. some of them have dived more than 50% from my cut. at least now, when things are finally done bottoming (whenever that occurs), i'd still have capital to go in.

 

 

hihi..

that's really lots of valuable information here.. being a newbie, i really learnt a lot of stuff from this thread...  i am also trying to fine-tune my own investment strategy... made a few mistakes here and there... guess that's how we learn??  

still stuck with Yanlord... now almost 50% loss of capital... keep asking myself whether to cut or not.. i think the main problem with me is dunno when to cut loss... haiz... 

elf, can i ask for your advice... what's your view for Yanlord?  i am a noob with TA so i really dunno how's the chart for tis...