Monday, February 15, 2016
Read on how stocks being operated
It is Sunday ... 10.30pm now. Liverpool is playing vs Villa but I am just home from dinner-jalan-jalan at Pyramid. My mind was full with stock-operators and some of the ways they operated the movements of many stocks or even markets.
Minute 17th : Liverpool just scored a goal. Sturridge scored. I m just checking the score 'live' thru soccernet.
Read the book called :
REMINISCENCES OF A STOCK OPERATOR
It is a very good book as I m a fans of Livermore (and also fans of Liverpool since 1978).
Minute 25th : Milner just scored ... 0 - 2 now.
I am very interested to know how stocks being operated ... to the benefit of some operators, of coz. I will make documentations on these ... and it will be great if I could make a good compilations on these.
THHeavy : At 14cents ... dived from RM1 level (last year Feb 2014) ... to current Valentine-week at 14cents.
It is very interesting .... how we(retailers) could be driven to buy stocks without knowledge, from hear-say ... or tips. I was given 'tips' to watch THHeavy by an experienced banker ... it was at 90cents level back then. I bought some ... but didn't sell when it was at RM1 level ... and finally have to cut-loss when the 88cents support broken.
You see ... no matter how 'reliable' the source is, we have to take the responsibilities in our own trades. If we failed to sell(for profits or cut-loss) and hold on to our stocks ... who are we to blame others, right?
I have .... over the 7 years (daily basis, mind you) ... received many-many tips .... some doing very well (example HapSeng at RM1.80 and its warrant was at 50cents when I bought them) ... but some are 'bad' tips.
Again .... free tips are everywhere. Just ask ourselves "WHY are someone providing us 'public' free tips to earn money?". Think again .... think hard and logically. THINKING needs brain to analyse ... THINK over it.
Forums are being used to disseminate 'free' tips .... everyone somehow mentioning some stocks with "TIPS" given ... somehow, many will QUIETLY bought into the stories. Some done well .... and they started to TRUST the story-tellers .... and the next round, they will buy in larger position the next TIPS given ... believing they will profit hugely this time.
Profit again .... and the TRUST instilled (and installed in our system).
THINKING is no longer needed ... as the TIPS are genuine. It is meant to 'help' us ...
The next time another new TIPS out by the same 'author' .... we will sai-lang(show hands .... buy ALL ...ini-kali-lah .... huat-ar ... gogogo ... etc etc) ... trusting that this is the time we WILL be rich.
You could guess it right ... WHY is it so good to be true? Is it true?
Somehow .... the trade didn't work well this time!! We are 10% down now from our largest position .... what is next?
We search for all reasons why we should be holding on to our positions .... we tried to look for the 'author' who seems to be disappeared?? WHAT? WHERE is he when we needed him most?
Hmm ... it was said that the stocks will double in price in 3-6 months time. It is only 1 month ... with 15% down , we shall wait patiently.
Wait a minute ... the stocks SURGED 8% in a day .... whooppi ... I TOLD YOU SO to hold. LUCKILY. It shot up another 6% the next day ... and another 12% next week.
There ... the 'author' of the blog/forum came out and stating that he is convinced that the stock is worth to hold for 3months. It is so convincing that our fear-of-losing diminished. We told our friends about our good profits .... and with good intention to HELP them to earn some 'easy' money from investing (it is called speculating and not investing leh)
Many more of your friends/colleagues or those in the watsapp/telegram/facebook and what-ever 'forum-friends' .... reading about this particular stocks. The TRUST is at highest level ...
The stock jumped another 8% the next week ... speculated to be take private by the media such as The Edge or The Star-biz ... remisiers and dealers sending more sms/watsapp to update everyone about the new 'white knight' ... there you are!! INI KALI la ....
Each time you speak to your friends-colleagues, all thanking you for their good fortune and appreciate that you shared the TIPS with them ... someone told you that his uncle placed his life-saving buying the stock and waiting to reap at least 50% profits.
INI KALI la ... what a genius I am, you thought.
The only regret is that you read the forum-blog TOO late ... but you are satisfied with your 40% gained at the moment ... after 2 months plus and waiting for the privatisation ... which being said to be valued more than 160% of your cost price. You smiled everyday ... planning on how you going to use some money from the profits.
Suddenly .... the news out that the hotly speculated news is not true ... stocks diving sharply, but you are still in profits. Some of our anxious friends started to call you ... they are in losing position now. You were searching for the 'author' again ... not to be seen for whole week.
It gapped down the next day ... oouch. You started to be in losing position again .... and many of your friends have to cut-loss and such. Some still hanging on ...
The selling was fast-n-furious ... you are desperate!! Nothing you could do now .... but thoughts of cutting loss is there ... crashing!
58th Min : Can scored the third goal!!
Finally ... you have to admit wrong ... cut-loss some 35% losses. Luckily .... otherwise, you will lose much more. You blamed your luck ... and regretted that you didn't take profits!
63th and 65th min : Origi and Clyne scored. 0 -5 now. Great. KLCI to rebound tmr.
Anyway .... the writing above being experienced by many. I went thru those stages before too ... I was naïve , was a total newbie .... and was mis-led too. It is not easy NOT to believe those stories ... and to be in the 'herd' is only feeling 'right'.
Remember ... THINK.
THINKING is most crucially important in our trading/investing .... as the RISK being in stock-markets in 2016 increases .... substantially.
Getting out from markets (cut-loss all our stocks) is one good idea. But ... do you THINK we will be smart enough to buy during crash? Really?
Let me enlighten all WHY retailers WILL NOT buy during market crash?!!
First of all ... those caught into Maxis at above RM6.40 will NOT cut-loss when RM6.40 support broken. Wait a minute again ... generally, RETAILERS will not cut-loss, ok? It is MAXIS ... an AK counter, good dividend counter .... index-linked blue-chips!! etc etc .... so, holding to RM6.60 still OK ...
When it broken RM 6.20 support and dived 10% in a day .... all the way to RM5.60 ... do you think they(retailers) will BUY ... errr ... or sell for huge losses?
RM6.60 to RM5.60 .... no thanks to the PM's mini-adjustment in the budget news.
It is FEAR in market ... it is a BUY. Market not even crashing down .... why NOT buy hugely at RM5.60 .... since we like it at RM6.60 ... or whatever value higher?
Add the BAD sentiment that market is crashing .... do you think any retailers (especially newbies ... less than 2-3 yrs in market) will BUY? THINK again ....
without experiences, catching Maxis at RM5.60 is near impossible as we DO NOT know that MR5.60 is the bottom .... we think it will go lower and it should!!
RM6.15 is the selling point to me. Some of members sold above RM6.20 and I have to tell them ..... time to SELL, ok?
71th min : Toure scored the 6th goal.
We could never get the tip-of-bottom .... we could not sell at the highest peak. But ... buying near to the bottom and selling near to the peak ... will make the trade GREAT.
Maxis is my great practice .... on technical rebound. How I sold my RHB around RM5.40(now RM5.25) and to buy hugely into Maxis all the way down to RM5.60 ... simply giving me a great satisfaction. It is just a training ground ... an important lesson to learn BEFORE market really crashing down (2016 no crash la).
It is still very interesting to see how stocks DIVE .... and recover well. It is more interesting to know who the whole sectors being pushed up, only to see the whole sector crashing down.
So .... whether we are speculators, punters .... traders or investors .... as long as we are in stock-markets or trading, we should TAKE FULL RESPONSIBILITIES in our own trades. We need to LEARN ....
by quitting stock-markets now simply because we are losing/lost .... and not learning the lessons .... we will miss out the coming market-crashing opportunities.
Nothing could replace .... EXPERIENCES.
to join me : e-mail to firstname.lastname@example.org or sms/watsapp at 012-821 0129
Stay fit .... and happy Valentine.