Sunday, 5 September 2010

Be an INVESTOR and not a TRADER

Some TIPS 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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And some good advices read from Createwealth8888's post:

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 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.
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In a nutshell, 3 most important things an investor should possess are time, skill and discipline.

Appropriate allocation of capitals, not afraid to wait out the tough tides and the discipline not to be overly greedy. I like this quote from Warren Buffett-

"Be greedy when others are fearful and fearful when others are greedy".

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

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