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Stock Market
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Written by Ben
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Sunday, 25 November 2007 |
Small showers last long
Sudden storms are short
Once the downtrend starts, nobody knows when it is going to stop. Be on the watchout for any panic sale.
When there is fear in everyboby's face, it's the time to buy.
If volume increases very sharply with very steep drop, it is likely to end there.
Keeping watching.
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Actions Speak Louder than Words |
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Stock Market
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Written by Ben
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Sunday, 18 November 2007 |
Actions speak louder than words.
Should you counter-herd or follow the instinct of the herd?
The
herd instinct in humans can have both positive and negative effects.
Just because the crowd is chasing a particular counter does not mean
you have to join the bandwagon.
Study your charts and follow your own judgment. Always think intelligently.
Charts
are designed to track smart money. If you know how to read correctly,
you can see all the actions. But if you misinterpret, you will have to
bear the pain. It is not easy to become proficient in chart-reading.
You will make many mistakes. Make your bets small initially; the smaller
the better.
Charts are like electricity. If you know how to use them, there are very useful; very good servants but very bad masters.
To
learn how to swim, you must go into the water. There is no other way.
You may have learned everything on paper but you are sure to sink the
first time you go in there. Paper-trade is only at best, a practice. In
real trading, everything is different. Our emotions, fear, hope and
greed all come into play. Experience is the best teacher. Whether charts are useful or not to you, only time will tell. The proof of the pudding is in the eating. Much will depend on how smart you are.
So much for now, and as usual, good luck and all the best.
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All that Glitters is not Gold |
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Stock Market
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Written by Ben
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Wednesday, 14 November 2007 |
All that glitters is not gold
Think carefully before you buy
Don’t leave yourself dry and cold
And bid your money, bye-bye!
Our
stock market is inefficient. Because of this, the value of a share is
not reflected in the price. Overly optimism causes a share to be
overpriced; and overly pessimism causes a share to be underpriced.
Manipulation,
rigging, speculation, rumors, hope, greed and fear are factors causing
shares to be greatly overvalued or undervalued.
A smart investor
has the shrewdness to exploit your emotion, fear and greed. You must
have the knowledge and wisdom to combat them.
Before you are
allowed to drive a car, you must undergo a test to prove your
competency. This is because your mistakes can be fatal to somebody
else. In the stock market you don’t have to undergo any test. If you
have the money, you can just walk into a broker firm, open an account
and start playing the market. In fact, the more stupid and naïve you
are the more welcome you will be because here your mistakes will be
somebody’s gain.
Strive for knowledge. Knowledge is better than gold.
Happy investing.
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There is a Time For Everything |
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Stock Market
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Written by Ben
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Friday, 09 November 2007 |
There is a time to reap
There is a time to sow
There is a time to buy and keep
There is a time stocks must be sold
Timing
is crucial. In a bull market, buy on dips. In a bear market, sell on
rallies. The difficulty is to ascertain that a correction is a
correction and not a reversal. If you read it wrongly, you are in
trouble. Worse still, you may compound your error by averaging down.
And that may end you up with a catastrophe loss that could be
disastrous. A simple stop-loss could have saved the situation.
People
say, “Buy low, sell high; or buy high and sell higher”. But I say it is
better to buy high and sell low. Buy high and sell low! You must be
mad. Rest assured that I am not. Bear with me for awhile and I shall
explain.
Smart monies accumulate at the bottom. Their
accumulation may last from a few weeks to a few months or even a few
years. Once they have got enough, they will push up the price. So the
best time to buy is when there is an upside breakout at low level after
the forming of a good base. That is what I mean by ‘to buy high’.
At
the top, they (smart monies) will start their distributions. Once their
distributions are over, there will be a downside breakout. It is very
difficult to know whether a lateral movement is a distribution or
further accumulation. That’s why you have to wait. When there is a
downside breakout, it means that the distributions are over. And the
downtrend has commenced. It is here that you must sell. This is what I
mean when I say ‘to sell low”. Actually, it is to sell low at high
level. Got it?
The moral: Follow smart money, but be one step ahead of the pack.
Bye now folks, good luck and all the best.
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A Stitch in Time Saves Nine |
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Stock Market
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Written by Ben
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Wednesday, 07 November 2007 |
I like proverbs. They are short popular sayings embodying some familiar
truth or useful thoughts. Much wisdom can be learned form proverbs.
“A stitch in time saves nine”
Your stop-loss, to be useful, must be refined.
It’s
easy to say, “Cut your losses quickly and let your profits run”. It is
imperative that you know exactly where to place your stop-loss. If you
put it at the wrong place, your stop-loss can easily become your
stop-gain.
Because every stock has a personality all it own, you
cannot generalize. A stock which has a great velocity in its price is
different from one that has a low velocity. Therefore, each calls for a
different kind of action. If you want to trade, you must master the use
of the stop-loss; otherwise you will get into all kinds of trouble.
Never drive your car without brakes. Never trade without a stop-loss.
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