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Thursday, October 17, 2013

Trading : Risk and Noises

Encouraged by a reader who thanked me for my writing about the part I( click here) ... let me take a little of my time to share more about the beginners' steps ... into real trading.

Let us continue from what I hv written days back. Hmm ... I was talking about RISK that is involved when we are to trade in any financial markets. Even buying-selling properties or gold is considered as RISKY tradings!!

What I am sharing here is something we all could trade(online) ... that are equities, currencies, futures, ETFs and more. So, it is something which are LIQUID(can easily buy and sell, whenever we wanted to .. in click of mouses, wherever we are, if we are able to go online la ...).

Basically ... which one should we choose to trade?

Stock-markets vs Forex?

In my view, NO DOUBT it is suicidal to trade forex if one is newbie-novice ... and the risk is simply too enormous!! But,again ... MANY newbies have been mis-lead by many forex-trading courses, software promoters and profitting from the greediness of many newbies(they are new ma ... they thought trading is easy-leh ... and those promoters shown them even any Tom&Dick can trade at home and gain few hundreds percent ... logical or not?) ...

So, the promoters win ... they managed to advertise ... and give some free makan, freebies ... door gifts ... and asking us to go for their free talk in one of the hotels/centers. Great? Yeah ... one should go to such talks to understand what I meant. If you bring your greediness there, you will be ... err ... joining them, most probably.

Now, while most of us WANT profits, we overlooked the RISK in trading. That is a wrong mindset. Very mis-leading, indeed.

Then, how should we start?

Ok ... trade stock-markets!! Choose blue-chips such as PChem, for example. Learn some simple terms about trading ... example, trends ... and learn BASIC common sense about reading some financial-reports. FOCUS is the key word ... DO NOT mis-lead by many out there who are trying to 'help' you. Help yourself ... be persistent and consistent in your learning, and be FOCUS.

Get the REALITY to seep in ...

Get the fundamental RIGHT ... the mindset. It is the most important asset we are having. Be realistic ... be firm and check what is your motivation to do well ... in trading. Accept it that the learning is grueling and expect to get our fingers burnt. Accept the up-down of emotions ... the feeling of defeats ... but never give-up. Pick yourself up ... do better the next time. You will somehow learn well, if you are sensible and rationale. Many in markets DO NOT have these qualities ... so, hang-on there ... you will do very well.

Buy ... see how you feel. Buy at a level, think of WHY you are buying at the level. SELL if of for profits ... or even a loss .. feel it. Are you smiling due to the profits and think you are they 'best' or are you feeling down due to the loss? ASK ... why?

Always ASK questions ... seek some answers ... double-check the answers, have second opinions. I am being a mentor to many newbies in my group, and I derived the satisfactions from seeing them improve tremendously, while I am also indirectly learning many things from them too ... so, question ... no question is considered as 'silly'. If you dont know the term 'contra' or 'margin call' ... you just need to hang in markets for some time ... getting in a group(those who are serious to learn... not those noisy forums) ...

Remember ... once you are in market, you are exposed to RISK. Also, you are exposed to majority losers out there ... many will make noises ... and it is drowning. If you seek attentions, you will get un-necessary attentions, in which of little help in your improvements. In fact, others will confuse you further. Get real, as I said. It is grueling ... accept it, move on and be better, not bitter.

Learning to move away from the crowds ... and herd is a very important criteria to be good in trading-investing. To learn that, we need to be different ... and discipline. In investing, we called in 'contrarian'. Be a contrarian ...just means, SELL when many coming into buy ... and BUY when not many interested to grab. Those very active 'goreng' counters are strongly NOT advisible. Let others goreng ... we need to keep our focus well in order NOT to be in the crowd. Short-list few good counters and place it is your stock-list. Nothing else ... no need to check on others, just purely focus in those few ... while adding in more good fundamental counters into our watch-list. When our knowledge and experiences grow, we will ... learn more, and I am sure those with discipline to learn well, will do well. Remember, only 20% of those in markets learnt well ... about trading markets, and they took years ...

Nothing come easy ... if anyone telling you it is easy, stare at them ... ask them to be honest.

Welcoming Westport into KLSE ... the most talked abot IPO as it is linked to Li Ka-Shing.

Time to rest ... and will write again, if I could find some motivation(and time).

TEH

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