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Trading without stop losses
If there’s one thing every trader needs to know, it’s to trade with a stop loss (SL) in place. Stop loss is the limit at which a losing trade would automatically get closed.
“Stop loss protects a trader from losing control on his/her account if and when a trade runs away from them — and, combined with profit taking, it can create far more consistent performanc
Selling winners and holding losers
Investors naturally want to sell their winners and hold onto their losers. That's because they're constantly afraid that their gains will be erased, and always hopeful that they can recover their losses.
Don’t book profit in a hurry
Selling a quality stock on the smallest of negative news is one of the worst decisions an investor can take. Most investors who have made money in the stock market have worked on ‘buy’ and ‘hold’ strategy. Negative news can increase the volatility in a particular stock in the short run. However, one should not sell a stock in panic
Small stock, big returns
Novice investors often get lured by market movement and try to spot penny stocks hoping for multibagger returns in coming years. Small companies with unreliable promoter backgrounds should be completely ignored.
Quality stock, but wrong valuation
Sometimes people invest in the stock of a quality business but at higher valuation
Not knowing what you're buying
A lot of investors put money in stocks without knowing the business. Proper knowledge of a business can help investors understand how earnings can grow with any changing business
It is funny how stupid people are at making big financial decisions, when they know nuts
Greed, an intrinsic emotion of every human being, is mostly responsible for losses one suffers in the financial world.
all traders think is quick and easy to make $$ in stock market
If stock is down by 10%, it requires 11% recovery; 90% down requires 900% recovery and 99% down requires 9900% recovery.
80% of all day traders quit within the first two years
Profitable day traders make up a small proportion of all traders - 1.6% in an average year. However, these day traders are very active - accounting for 12% of all day trading activity
bad earning , exchange investigation,management change can cause a stock to drop
Another way that an investor can lose large amounts of money as a result of a stock market crash is by buying on margin
No one invests in the stock market to lose money. Yet it often seems like the people who lose their shirts outnumber those who strike it rich.
Investors also often confuse short-term trading strategies with long-term ones
too diversify
Lastly, the easiest way to lose money in the stock market is too diversify.
Buy High, Sell Low
You don’t do your research.
You don’t learn from your mistakes.
Letting emotions, not processes, guide decisions.
It has been well documented that investors tend to sell the low, buy the high, i.e. momentum chasers
So basically, most retail investors get greedy and panic at inopportune times.
This is due to the basic fear/greed mechanism.
People (professionals included) tend to over-project their optimism when things are good.
And people tend to get depressed, bipolar when things hit the fan, leading to irrational actions.
And they let their emotional state project itself onto their investing decisions
no discipline
Trading in Taiwan dropped by about 25% when a lottery was introduced in April 2002.
profit dare not add but loses can
Not setting realistic expectations.
Before you invest, you should be aware of your financial goals. Having unrealistic expectations of stock market investing can be very dangerous. That is not to say that you shouldn’t be hopeful that your investments will yield profits for you, since that is the entire point of investing, but it’s important that people know what to expect. The stock market is not meant to be a quick financial fix - it is meant to accumulate money over extended periods of time.
. Not doing enough research and investing based on ‘TIPS’.
Sudden over exposure to market
Blindly following the crowd.
The best way to win is to play a different game.
Borrow to invest in Market including derivative trading:
Most persons lose money because of the fact that they speculate while investing.
Trading on Gut feeling
Over-trading on margins
If you don't know how to play the stock market, it's like a casino. Even with no knowledge at all, you might get lucky. However, casino game are stacked in the favour of the house - you typically lose about 2% per hand or turn. The stock market isn't though, and it grows. It's a sample of the market as a whole. Markets double in size every 40 years or so. If you spread your money far and wide, you can expect this sort of return.
Invest in good and old company who has very low debts and are continually paying divided for ages and their products have high market share.
Invest for minimum for 5 years.
check the credibility of the management in the way they execute their plan
avoid ill liquid stock
Disclaimer:
sole purpose of education, discussion and knowledge sharing.
It should not be used as a decision for trading activity. Use all information at your own discretion and practice due diligence.
Participants should consult his own independent or professional adviser and will not at any time hold PA or speakers liable for any damage suffered by the Participant arising from or in connection with the material and information shared in the session.
Started trading stock index in 1999.
My trading was yielding decent returns for the first 2 years.
In 2001, I burst my account due to 911 terror attack.
Took a trading break after the incident.
Thereafter, I did research and back testing of trading strategies.
Back to trading in February 2005 .
Did well in 2008 -2009 and 2010-2012 was not as good but also ok.
After 2012, only trade for leisure until today.
Started sharing with a few friends related to trading issues since 2011.
The sharing group become bigger by words of mouth
My philosophy is simple. Sharing with 3 or 30, the effort is the same.
I don’t mind sharing with more people if they can benefit from my sharing.
Continue my sharing session until to date.
This message was edited by ferari on 07-Jul-2017 @ 4:25 PM
This message was edited by ferari on 08-Jul-2017 @ 11:28 AM
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