Wednesday, May 20, 2015

Trade the stocks - are you the one?

A lot of people "think" they can trade in stock market and earn a living or pocket money. Unfortunately, thing is not as simple as one may think. What they think and the actual fact is so different! We as a dealer, receive many queries daily. If a stock going up, people will ask, should they sell or not, or sell at what price. If the stocks going down, they will also ask should they cut lost or continue to hold? The worst thing is, majority of people will sell the stocks that going up (or cut the profit) and keep the stocks that going down. (with the hope the price may up again in future)

If our intention is for trading (not investing), then we need have proper trading plan to counter all these problem. Trading is about changing from "cash" to "stocks" or vice versa. There's nothing wrong to hold "cash" on hand and waiting for opportunity. When you face a situation to hold stock that is flag (no trend of up or down), or the stock that keep going down, would you prefer to hold cash or the stock? In this case, the answer is clear, why hold the stock that continue to go down or flag? Why want to waste time on these stocks with no trend, since you do not know when it will go up. There's always opportunities in the market.

There's no question of cut lost or not, since we already analyzed the stocks before turn the cash to the stocks, and if the stock trend is not move in my favor, meaning my judgement was wrong, i must admit the mistake and quickly turn the stock into cash again, even if i do so will cause a small loses!

If you can "enjoy" all these process of changing the inventories (cash vs stocks), it could yield huge profit in futures and yes, trader's life is suitable for you!


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