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Sunday, October 31, 2010

Sunday morning ... I received a few request to help them to analyse a few stocks for them but none is sincere to have a deal with me. All want a 'free lunch'. So, nope ... I will only post those stocks that I want to analyse ... most of the time not in-depth in my 'free' blog. Some stocks are for my friends, those who know me. At least they will treat me a dinner or my D&C, ok?

I repeat again : I will not entertain requests to analyse this or that. What do you think of KNM? Plantation stocks are moving, do you think I could still consider BStead? etc etc ... no comment from me. I will only say on surface my opinions, that is OK as that is not a buy/sell call. Read my disclaimer.

動力火車 -忠孝東路走九遍



Warrants that I like

1. AnnJoo-wb - moving to support
2. BRDB-wa - pennant in making
3. IJM-wc - strong uptrend
4. IJMLand-wa - missed the boat - bye bye
5. KPJ-wa - ascending triangle
6. SPSetia-wb - missed the boat - shooting star!
7. Sunway-wc - at 20MA.

To win in a trade, you must be able to stomach some losses!!

When we buy into a stock, we BELIEVE that it will move higher. Then, as we have it ... each time when we buy a stock, it moves lower. We still want to believe it will rebound. And if it continues to go lower, we started to doubt own beliefs. Hmm ... what went wrong? we asked.

First of all, perhaps our entry point is NOT right. We bought when it is overbought. We may not know anything about TA(many do not) So, logically it retraces and we are losing the confidence in our trade!!

Next, since we initially believed that that particular stock will move higher, why not average-down? We were taught NOT to average down our losing trade(as our bullets will stuck in) but cut-loss instead. It was obvious we dont have a good plan for the trade and 'accidentally' bought when it is at its peak. For majority who do not know much about stocks, it is a common situation.

Say, I bought AnnJoo at RM3.30 recently(at its peak)without knowing that at 3.30, it is a resistance and it was at overbought. It has been chased up from 2.30 since June.

So, we are in dilemma ... it is down down down ... oh boy, it is at RM3 now. What should I do as I m down almost 10% in days!! And I didnt plan to cut loss!!

Before you sell it off tmr, THINK. Why it goes down? Do you STILL believe that it will move higher or reversal in play?

If you still believe it SHOULD move higher(you have your own justification, I know), then it is only logical to average-down.


TEH

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