Sunday, 5 September 2010

Be an INVESTOR and not a GAMBLER

Some tips I have gathered from the book 'Techinical Analysis Demystified':
  • Do not be influenced by other's views, make independent decisions
  • If the market cannot move up on good news, sell fast. If the market cannot move down on bad news, buy fast.
  • It takes patience to wait for trends to be established or to wait for the correct setup to enter. You must have a precise entry level and reason for entering. Jumping in for dear that you'll miss out is not a good enough reason to buy.
  • Knowledge of human nature: Market hate to sell at even numbers. Keep stop orders just short of round whole number as well.

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Here's some good advice from Createwealth8888's blog:

To not GAMBLE in the stock market, you can do one or more of these
  1. Leave your capital invested and focus on collecting stock dividends and likely over a long period of time you will finally recover all your capital plus more.
  2. Periodically recover your capital plus some capital gains and re-invest when stock market presents another opportunity.
  3. Periodically collect both stock dividends and some capital gains and re-invest when stock market presents another opportunity.

Read his post too on a 'Touchstone' story: Opportunity in the stockmarket?

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