Thursday, May 15, 2014

Let the profits run ...

Morning ... it is relaxing in the morning these days since I do not teach in morning anymore. I did not go for jogging today, a rest day after I jogged yesterday. Yes, I am taking up 'running'.

I have started two weeks ago ... yes, MAY 2014. I supposed to start in Jan 2014 ... you know, the new-year mood of resolution. Bought this running shoe(at 30% discount) and determined to run ... but was too busy(excuses) ... and now, as I am retiring from my full-time teaching job, I could spend some time jogging with my wife. It is something I want to do ... since I am back from KL 4yrs ago.

I am targeting to finish (complete not compete) 10km run ... I started 2 weeks ago, not able to finish 100m without losing my breath or stop? Yesterday, I ran 200m without stop ... and increased the pace!! Still hard to catch the breath ... and really need to work on my large tummy. Lots of hard-work to be able to complete 1km without stop? Well, I do hope I have the WILL power to carry on the challenge ... but that is how I start in anything. Take it slow ... do 100m first ... then slowly increase the pace, the distance ... by next week I should be doing 300m?

Ok ... lets talk about trading : Lets the profit runs --- easier said than done?

One of the many mistakes we do ... as ikan-bilis traders is to SELL TOO early. This is a common mistake and it happens to me again and again ... so, I guess it is matter of discipline?

Well, if we are confident on a trade and a counter, we should NOT diversify. Buy in stages, buy hugely ... sit tight and wait for the it to recover ... and let it runs.

So many of our stocks move higher and higher ... as we sold way too early. And few more under-performing counters in hand, we should sell under-performing counters and buy more into the winners and let it runs ...

Example : I do traded CBIP few times ... and the first time I grabbed her was after it breakout of RM3 ... my average was RM3.05. Today, it is RM4.50 ... it hit RM4.75 levels. While I am confident that it will continue to move higher from the breakout RM3 level, I did not BUY in huge quantity and WAIT patiently. Currently, the CBIP chart is not nice ... H&S might be forming, if RM4.40 broken, time to take profit or cut-loss.

Presbhd : I bought at RM1(before ex) and it went to RM4. I sold a day before ex. Then, waited for it to be down ... and it did. SHARPLY. So, on Monday ... I told my trading-group to look at Presbhd and BUY in stages. Yesterday, it rebounded sharply and I sold part. Today, I will hope to sell all. I have traded Presbhd so many time from RM1(now should be at 50cents) ... and IF only I could hold from RM1 to RM4? They even give good dividend along the way. WHY not let the profit to run and hold? Right?

That is difference between investors and traders. When it is reaching the resistance and at overbought level, traders will SELL. We need to sell ... in order to release the funds, and move into something that might satisfied our set-ups/trading plans.

For investors, the noises of up-down won't bother them much but buying into an under-valued stock is only logical, while patiently waiting for the stock to be recognised, and only to sell the stock if it is over-valued.

No right or wrong, we just need to get our strategies right ... and work on that. We need to grow, to be more matured and continue to learn from our mistakes.

As I have told many(all?) that I am just a novice in KLSE(6 years so far), I still have long way to go ... to listen to many experienced traders/investors ... learn some skills from them and try to apply them. Yes, I do many trial-n-error

I could give many more examples ... but guess

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