Tuesday, 19 October 2021
Quote for the day
"There's no shame in losing money on a stock. Everybody does it. What is shameful is to hold on to a stock, or worse, to buy more of it when the fundamentals are deteriorating." - Peter Lynch
Monday, 18 October 2021
Quote for the day
"The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance, or the get-rich-quick adventurer. They will die poor." - Jesse Livermore
Sunday, 17 October 2021
20 Golden Rules for (Day) Traders
Want to trade successfully?
Just choose the good positions and avoid the bad ones. Poor trade selection takes a heavy toll as it bleeds your confidence and wallet. You face many crossroads during each market day. Without a system of discipline for your decision-making, impulse and emotion will undermine skills as you chase the wrong stocks at the worst times.
Many short-term players view trading as a form of gambling.
Many short-term players view trading as a form of gambling.
Without planning or discipline, they throw money at the market. The occasional big score reinforces this easy money attitude but sets them up for ultimate failure. Without defensive rules, insiders easily feed off these losers and send them off to other hobbies.
Technical Analysis teaches traders to execute positions based on numbers, time and volume.
This discipline forces traders to distance themselves from reckless gambling behavior. Through detached execution and solid risk management, short-term trading finally "works".
Markets echo similar patterns over and over again.
Technical Analysis teaches traders to execute positions based on numbers, time and volume.
This discipline forces traders to distance themselves from reckless gambling behavior. Through detached execution and solid risk management, short-term trading finally "works".
Markets echo similar patterns over and over again.
The science of trend allows you to build systematic rules to play these repeating formations and avoid the chase:
1. Forget the news, remember the chart. You're not smart enough to know how news will affect price. The chart already knows the news is coming.
2. Buy the first pullback from a new high. Sell the first pullback from a new low. There's always a crowd that missed the first boat.
3. Buy at support, sell at resistance. Everyone sees the same thing and they're all just waiting to jump in the pool.
4. Short rallies not sell offs. When markets drop, shorts finally turn a profit and get ready to cover.
5. Don't buy up into a major moving average or sell down into one. See #3.
6. Don't chase momentum if you can't find the exit. Assume the market will reverse the minute you get in. If it's a long way to the door, you're in big trouble.
7. Exhaustion gaps get filled. Breakaway and continuation gaps don't. The old traders' wisdom is a lie. Trade in the direction of gap support whenever you can.
8. Trends test the point of last support/resistance. Enter here even if it hurts.
9. Trade with the TICK not against it. Don't be a hero. Go with the money flow.
10. If you have to look, it isn't there. Forget your college degree and trust your instincts.
11. Sell the second high, buy the second low. After sharp pullsbacks, the first test of any high or low always runs into resistance. Look for the break on the third or fourth try.
12. The trend is your friend in the last hour. As volume cranks up at 3:00pm don't expect anyone to change the channel.
13. Avoid the open. They see YOU coming sucker
14. 1-2-3-Drop-Up. Look for downtrends to reverse after a top, two lower highs and a double bottom.
15. Bulls live above the 200 day, bears live below. Sellers eat up rallies below this key moving average line and buyers to come to the rescue above it.
16. Price has memory. What did price do the last time it hit a certain level? Chances are it will do it again.
17. Big volume kills moves. Climax blow-offs take both buyers and sellers out of the market and lead to sideways action.
18. Trends never turn on a dime. Reversals build slowly. The first sharp dip always finds buyers and the first sharp rise always finds sellers.
19. Bottoms take longer to form than tops. Greed acts more quickly than fear and causes stocks to drop from their own weight.
20. Beat the crowd in and out the door. You have to take their money before they take yours, period.
Source:http://www.tradingday.com
1. Forget the news, remember the chart. You're not smart enough to know how news will affect price. The chart already knows the news is coming.
2. Buy the first pullback from a new high. Sell the first pullback from a new low. There's always a crowd that missed the first boat.
3. Buy at support, sell at resistance. Everyone sees the same thing and they're all just waiting to jump in the pool.
4. Short rallies not sell offs. When markets drop, shorts finally turn a profit and get ready to cover.
5. Don't buy up into a major moving average or sell down into one. See #3.
6. Don't chase momentum if you can't find the exit. Assume the market will reverse the minute you get in. If it's a long way to the door, you're in big trouble.
7. Exhaustion gaps get filled. Breakaway and continuation gaps don't. The old traders' wisdom is a lie. Trade in the direction of gap support whenever you can.
8. Trends test the point of last support/resistance. Enter here even if it hurts.
9. Trade with the TICK not against it. Don't be a hero. Go with the money flow.
10. If you have to look, it isn't there. Forget your college degree and trust your instincts.
11. Sell the second high, buy the second low. After sharp pullsbacks, the first test of any high or low always runs into resistance. Look for the break on the third or fourth try.
12. The trend is your friend in the last hour. As volume cranks up at 3:00pm don't expect anyone to change the channel.
13. Avoid the open. They see YOU coming sucker
14. 1-2-3-Drop-Up. Look for downtrends to reverse after a top, two lower highs and a double bottom.
15. Bulls live above the 200 day, bears live below. Sellers eat up rallies below this key moving average line and buyers to come to the rescue above it.
16. Price has memory. What did price do the last time it hit a certain level? Chances are it will do it again.
17. Big volume kills moves. Climax blow-offs take both buyers and sellers out of the market and lead to sideways action.
18. Trends never turn on a dime. Reversals build slowly. The first sharp dip always finds buyers and the first sharp rise always finds sellers.
19. Bottoms take longer to form than tops. Greed acts more quickly than fear and causes stocks to drop from their own weight.
20. Beat the crowd in and out the door. You have to take their money before they take yours, period.
Source:http://www.tradingday.com
Saturday, 16 October 2021
How to Select the Best Stock
Selecting the best stock for investment is not a simple procedure. We will have to study and analyse a few facts before we invest in some stocks. It is too vast a subject to give a clear cut idea, the analysis of the following criteria will help you in selecting the best available stocks.
* Earnings Per Share(EPS) and PE Ratio
* Book Value Per Share
* Debt Equity Ratio (Divide Total Debt by Total Equity)
* Current Ratio (Divide Current Assets by Current Liabilities)
* Profit Margin (Divide the Net Profit with Revenue)
* Return on Capital Employed and Return on Equity
* Dividend History
* Profit Growth
* Cash Flow Details
* Business Segment and Growth Potential
* Size of the Company
* Competitive Advantage In the Market
* Brand Value and Product Differentiation
* Goodwill
* Market Scenario
* Economic Strategy of the Company
* Economic Atmosphere of the Place of Main Operation of the Company
* Political Influential Factors of the Country
These are the criteria that help you in selecting the best available stock. However, it does not mean that the all of these criteria must be favorable for a stock for being eligible. You can leave out some criteria or give more weight age to the other favorable criteria over the adverse ones, depending upon the time period you are planning to held the shares or how much risk you are ready to undertake.
Source:http://kevin-peter.hubpages.com
* Earnings Per Share(EPS) and PE Ratio
* Book Value Per Share
* Debt Equity Ratio (Divide Total Debt by Total Equity)
* Current Ratio (Divide Current Assets by Current Liabilities)
* Profit Margin (Divide the Net Profit with Revenue)
* Return on Capital Employed and Return on Equity
* Dividend History
* Profit Growth
* Cash Flow Details
* Business Segment and Growth Potential
* Size of the Company
* Competitive Advantage In the Market
* Brand Value and Product Differentiation
* Goodwill
* Market Scenario
* Economic Strategy of the Company
* Economic Atmosphere of the Place of Main Operation of the Company
* Political Influential Factors of the Country
These are the criteria that help you in selecting the best available stock. However, it does not mean that the all of these criteria must be favorable for a stock for being eligible. You can leave out some criteria or give more weight age to the other favorable criteria over the adverse ones, depending upon the time period you are planning to held the shares or how much risk you are ready to undertake.
Source:http://kevin-peter.hubpages.com
Quote for the day
"The secret to being successful from a trading perspective is to have an indefatigable and an undying and unquenchable thirst for information and knowledge." - Paul Tudor Jones.
Friday, 15 October 2021
Quote for the day
"A 10% decline in the market is fairly common—it happens about once a year. Investors who realize this are less likely to sell in a panic, and more likely to remain invested, benefitting from the wealthbuilding power of stocks." - Christopher Davis
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