Sunday, April 10, 2016
Tips # 1 : Cut Loss (ver 1.1)
It will never be enough to write a post ... so, I will be ver1.1 ... perhaps till version 1.9.3 etc ... till market crashing down, to make sure EVERYONE understand how important cut-loss is ... in trading or in investing.
NEVER fall in love in your stocks!!
Take Armada as an example.
BumiArmada's IPO above RM3(July 2011) ... adjusted right-issues at RM1.35 ?
Here the text : RENOUNCEABLE RIGHTS ISSUE OF UP TO 1,479,238,150 NEW ORDINARY SHARES OF RM0.20 EACH IN BUMI ARMADA BERHAD ("SHARES") ("RIGHTS SHARES") ON THE BASIS OF 1 RIGHTS SHARE FOR EVERY 2 EXISTING SHARES HELD BY THE ENTITLED SHAREHOLDERS OF BUMI ARMADA BERHAD AS AT 5.00 P.M. ON 12 SEPTEMBER 2014, AT AN ISSUE PRICE OF RM1.35 PER RIGHTS SHARE
Oil prices aside (as we could not control that) ... we are talking about IF we are STILL holding to ANY STOCKS ... down like crazy ... the PAIN killing you inside and you do not even want to talk about it ...
THEN YOU HAVE TO TALK ABOUT IT.
If Armada's support was at RM2.50 ... then, cut-loss needed if RM2.50 broken.
If Armada's support was at RM1 (recently ... a very strong support) ... it broken ... we have to CUT-LOSS.
Guess .... those reading these lines ... do something. You cant be holding to Sumatec at 50cents, ok? You should not be holding to BJCorp at RM1, ok?
CUT LOSS ... learn that, ok? It is OK to make the mistake ... bought FGV at IPO-level ... but it is NOT OK to hold on to it ... and HOPE.
Once we could LEARN to 'let-it-go' ... we could survive in stock-markets. I do know FGV was index-linked, a huge plantation company(I still like its land bank ... but have to admit wrong and cut-loss when RM2.20 support broken).
I do know it is painful ... it is ... afterall, we are losing 20%-30% .... or for some, 70% of the capital ... but we were too naïve, right? We might want to blame 'someone' who recommended us the stocks ... but do we realise that it is OUR decision to buy-sell?
So ... it is just my advise (alarming as it is ver 1.1 ... and 1.2 coming up soon).
Don't joke ... you bought Kinstel at 8cents and due to the steel-rally at the moment, Kinstel will be back to 50cents level? Kidding, right? You mean ... you bought at 80cents? I do know someone holding at RM1.05 level, ok? By the way, I traded Kinstel at RM1.40 level previously when it was listed.
Get real is VERY important to newbies. If you are reading these from some forum(s) ... time for you to get out of the forum and start to learn FUNDAMENTAL ANALYSIS ... start to learn proper TRADING PLANs ... and technical analysis (promoting my coming cohort-20 end of this month 24th Apr if you wish to join).
Anyway ... I have heard enough of many stuck at high(including myself ... previously, but I have learnt the skill of cutting-loss).
That is how we all newbies, novices and retailers lose money in stock-markets. Remember the TREND following rules ... once the trend is over, GET OUT.
One may wants to use 200MA for long term ... another might be using 20MA ... it is OK. But sticking to the rule is more important.
Not many will want to tell truth ... PAINFUL truth about trading. Their losses ... and bad experiences. Too bad ... we have many more newbies in market, not realising that they are exposed to HIGH risk of speculating without any knowledge much about trading-plan.
PLAN .... without exit-plan ... we are not going to exit. And stuck up there ...when the stock crashing down.
TopGlove ... activated. I bought Topglove at RM4.50 and RM5 (before ex ... so, now the price should be RM2.25 and RM2.50 ... discounting the dividends) level some 2-3 yrs ago ... when 1USD = MYR3.20 level. Suddenly ... everyone is talking about USD strengthening ... the whole sector rallied. Suddenly ... we are talking about dual-listing ... the split etc etc. News and more rumours flying around. If one is buying Topglove at current level due to the noisy news, MAKE SURE YOU HAVE EXIT PLAN ... and once whatever reasons pushing it up to double no longer valid, it will be crashing down. Yes, we are talking about the largest glove-counter here!! Imagine the smaller ones?
No eye see ... if ones don't know technical charting ... or fundamental readings. Need to learn to read between the lines la ...
DO NOT READ THE EDGE .... and believe the stories leh. Wake up la ... don't read blogs or forums to buy any stocks leh. Got brain, right? Use it ... tell me WHY someone want to benefit you leh? The Edge needs to sell their papers ... and also ... err ... do you think it is 'coincidentally' the stocks moved higher ... due to their reports? How about those IBs report ... c'mon ... wake-up, newbies!! Can trade ... can buy ... but an EXIT PLAN is needed, ok?
EAH : Do you know that I traded at 40cents before?
HWGB : Do you know that someone still holding at 40cents level?
HHHCorp ... 11cent is resistant now ... so active now. Yes ... buy 7cents and sell 11cents, right?
I guess you get my idea ... whatever stocks we are trading at the moment, set the CUT-LOSS level ... or else, do not speculate. Whether it is VS or AirAsia ... anything at all. Make sure we set the cutloss level.
Because ... CUT LOSS is the tips #1 ... in order to prepare for market-crash(which we don't know when).
Don't bother to time when the crash coming ...just make sure we jaga our back BEFORE it is too late.
contact me at email@example.com if you wish to join my stock-watch group(to learn too).