Thursday, 9 May 2013

Quote for the day

"I only use common sense. I buy when things are low and no one wants them. I keep them until they go up, and people are crazy to get them. That is, I believe, the secret of all successful business." - Hetty Green

LSL Market Review 9th May 2013

Colombo Bourse closed higher on Thursday for the sixth day in a row, propelling the All Share Index up more than 226 points this week, after Central Bank governor hinted that the central bank may lower policy rates again. The Monetary Board is expected to release the policy review for this month, tomorrow.

ASI gained 28.61 points (+0.5%) to close at 18 month high of 6,238.71. S&P SL 20 index closed at 3,526.51 with gain of 5.21 points (+0.2%). Investors' renewed hopes for a rate cut drove the activity levels across the board and the market turnover reached Rs. 2.1bn.

Commercial Bank (Rs.416.5mn), Distilleries (Rs.315.4mn) and HNB (RS.207.7mn) were the top contributors to the turnover. Touchwood Investments (Rs.6.30,+5%), Capital Alliance Finance (Rs.26.80,+23%), East West Properties (Rs.17.20,+12%), Vallibel One (Rs.20.90,-3%) and Dankotuwa Porcelain (Rs.18.60,+3%) were among the heavily traded counters. Access Engineering, Royal Ceramics, Nation Trust Bank, Hemas Holdings, Piramal Glass, National Development Bank, ACL Cables were among the 18 counters that reached 52 week high today.

Cash map for today was 56%.

Foreigners were net buyers with net foreign inflow of Rs.194.1mn. Foreign participation accounted for 26% of the market activity. Net foreign inflow was seen in counters such as Distilleries, HNB and NDB.

Stock Market Losers and Trading!

The average online stock market trader is almost always a sure loser!

Stock trading is a "GAME" in which you cannot afford to be average. Every day thousands of new and inexperienced traders are being charged large amounts of money by scam artists and self proclaimed "experts" for dubious stock picking services, "mechanical buy and sell signal generators" and "advice."

Which stocks to trade?

When to enter the trade?

When to get out of the trade?

Novice traders have a 99% failure rate. If they fail who is to blame?

Bad luck? I don't think so!

Trading success has nothing to do with luck. It has everything to do with you:

Your discipline,

Your hard work and ...

Your courage!

Did you know that successful stock traders couldn't care less about whether the markets are dropping? That's right!

In fact, the panic and fear that accompany falling markets make it easier for successful traders. The reason - panicky investors and traders have very predictable behavior, and it's precisely this predictability that gives the successful traders their competitive edge.

The typical inexperienced member of the trading "herd" enters the market at a high point with the notion that he might be left out of an ongoing rally.

On the other hand, exactly at this very same point, the experienced traders start to cash in on their profits and the rally quickly starts running out of steam!

When the stock declines to the point where the novice trader cannot take any more "pain" he gets out of the market, just before the stock finally hits it's very bottom.

Market volatility is an essential element in successful trading. You can profit from upturns and downturns in the market - you only need volatility. What will happen to the stock markets over the next two months or two years? I couldn't care less! I will still make money either way!

"It is not time to buy, but it is too late to sell!"

If it's not time to buy it is definitely time to sell. If you are in a trade and the reasons that got you there in the first place cease to exist, you should get out!

A misconception that losing traders have is that there are various "forces" out there who are controling prices and if they could just get closer to the "source" they would become winning traders.

Don't get me wrong now ...

If the markets move up or down, surely someone is making a profit. The question you need to ask yourself is:

Who is profiting from your losses?

Traders with more experience than you are taking your hard earned cash!

If you think that you can trade couple of hours or days per month and make huge profits then ...

Do wake up!

If you are not willing to invest your time, effort and funds, don't even start!

Trading success doesn't come for free!

But do remember:

If you get properly prepared and work really hard, you also can certainly make some huge profits in trading stocks!