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In an uptrend, all along the way, demand is greater than supply. As long as the demand is greater than the supply, the uptrend will continue.

When people are optimistic, they become overly optimistic and they will overbuy. That’s why we have overbought situations. When the market is overbought, it does not mean that it will immediately fall. It may continue to be overbought for a long time.

When demand slows down and supply increases. The uptrend will be halted. As the supply becomes more and more and demand less and less, the trend turns down.

 Those who are smart will sense the situation and start to unload their holdings. Profiting takings follow suit and soon supply greatly exceeds demands. Fear takes over; the situation becomes worse. The speed of the downtrend gathers momentum. The uptrend may lose up to 90% of the gain.

 You may alter the rivers and the mountains but not human nature. That’s why those who do not study history are bound to repeat it.

 Understand the movements of the market, and you will become a better trader or investor.

 Good Luck.

Short-term gain is long-term pain
Short-term pain is long-term gain

 Pain is very useful. No pain, no gain; so goes the saying. Pain flags us that something is wrong. When we are physically or mentally hurt we feel the pain. Physical pain and mental pain are quite different from each other. The latter is much more difficult to heal than the former. Anyone with a broken romance will feel the mental pain.

 When you take a small profit, you feel elated. As the stock which you sold goes up and up, your short-term gain becomes a long-term pain. On the contrary, if you cut your losses quickly, and the share price comes down and down, your short-term pain becomes your long-term gain.

 A trend in motion is likely to continue in the same direction. This is important. You will do well to commit it to memory. Let your profits run. Never kill the golden goose when you have one. People say, “don’t be greedy”. What’s the use of making pennies? You’ll never grow rich making pennies. Think big and plan big and someday you will be rich. 

Money for value you must insist. Invest wisely.

Good luck and all the best.

Share prices are comparable to the movements of the sea. In the sea, we have the tides, the waves and the ripples. In stocks, we have the primary trend, the secondary trend and the minor intraday trend.

 A long- term investor is not concerned with the intraday movements. But a trader is different. He tries to benefit from the minor moves. Intraday trends, like the ripples of the sea, are extremely unreliable and hard to follow. As a general rule of thumb, weekly charts are more reliable than daily charts and daily charts are more reliable than hourly charts.

 With modern technology, we are now able to have half- hourly charts or even quarter-hourly charts. These charts are created to encourage more speculation activities and business for the broker firms. How many have made money using these charts? I think for every successful man, there may well be over a hundred failures.

 No matter how good a system is, if you can’t win from it, quit using it. I have yet to come across someone who can consistently make money out of trading. If you think you can, think again.

 Good luck.