[ Home ] [ Up ] [ Bhailal ] [ Hemlata ] [ Dimpu ] [ Zil ] [ Kunj ] [ Services ] [ News ] [ Products ]

How to make fortune in Stock Market?

(Do not continue to Read if you are a buy and hold Player!)

0) “If you want to make money,” Cramer said, “you need to take a chance. Sometimes you will be wrong, but if you never try…you'll never be right.”

1) You can never lose in Stock Market if you have achieved EXIT mastery! Protect your capital with Stop Loss Orders and take profits when you can! (Though not easy but develop strong power to get out of trouble ASAP with minimum loss ) -- Bhailal Shah

Stupid Investment of the Week!

Commentary: Find a stop-loss point before you go any further with stocks.

Maybe you're investing because you believe that stocks are "on sale," or perhaps it's because you believe in the long-term prospects for recovery. Perhaps you hold stocks that have been good to you in the past, or which you've been in so long that you don't want to go through the headache of calculating your capital gains.

Or you could be trading for a quick profit, or following the discipline of dollar-cost averaging.

Whatever the reason, if you haven't come up with a stop-loss point -- either a real trigger to get out of an investment if it falls too far or an emotional point where you would sell -- you're making the Stupid Investment of the Week. The trait under review belongs to the investor and not the investment. Specifically it's about people who buy or hold a stock in a trader's market without having a concrete exit strategy.

The hardest thing investors have to do is to determine when they can make money in this kind of market, and when they have to preserve capital, because those things are often at odds with each other.

You are looking at something 'It's a bargain,' or feeling like it can't go down much further from here, and yet you are also looking at your portfolio and wondering how much of a loss you can take if you are wrong.

Set Limits: There are plenty of stop-loss strategies, typically involving a standing order to sell shares if they fall to a specific level. That said, rigid stop-loss programs typically are wrong for casual investors, as they can trigger losses again and again, especially in a volatile market. So while many investors who follow trading systems will always set a stop-loss at, say, 8% or 10% down from their buying point, an average investor could find themselves with a slew of investments all delivering a quick loss and never reaching the longer-term prospects that are behind the holding. A trader or someone with a system basically is using stop-losses to avoid being wrong. Someone who buys and holds blue-chips, they're trying not to be concerned with the short-term losses, figuring that they will get paid off over time. At some point, however, those losses start to add up and the math is not on your side. The problem with riding things down is that a 50% loss in a stock requires a 100% move back up. ... The math is the best argument for basically setting a selling point, one where you avoid losses or protect your gains. For long-term investors, finding a selling point may not mean setting a stop-loss order at a specific price per share. Instead, it may be an emotional price, one where the investor says they are willing to gamble with some of their winnings, but they are not going to allow a long-time winner to morph into a long-time loser. Unlike the person with a trading strategy, who takes proceeds from a stop-loss trade and puts it toward the next investment that meets their buying profile, a long-term buy-and-holder is looking more to create their reason to get out the door, without regard to the next investment. They are more concerned about protecting what they have than finding a faster horse at the track.

.

2) In a bull market, goes the saying, you should "buy on the rumor and sell on the news". In a bear market, try the reverse "buy on the news and sell on the rumor". Beware of trend "buy on the hope and sell on the news."

3) Wall Street veterans always warn that trying to pick the moment to buy a stock in freefall is like trying to catch a falling knife.

4) Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria. The time of maximum pessimism is the best time to buy and the time of maximum optimism is the best time to sell.  -  Sir John Templeton

5) Be patient - Do Not Rush - There is always another game day - It is okay to remain idle than haste into unknowns - No money at the end of the day is still better than loss!

6) Forget old fashion Buy and Hold strategy - Times have changed (at least as of February 4 2009)

7) If possible, do not keep stock overnight if bought during day - does not apply to evening trade

8) Ensure no room for - Emotion, Attachment, Sentiment, Personal Preference, Feelings, Love - Do not hesitate to Divorce immediately at the 5% sign of trouble

9) Buy few but with wholesale volume with 5% STOP LIMIT alert in place - helps mind to control

10) Be satisfy and happy with small profit than let wash away profit and end up sorry with loss

11) Long Position: Do not catch a Falling Knife - Catch Rising Sun

12) Short Position: Do not fly with Rising Sun - Catch Falling Knife

13) Do not fall prey to rumors, uncertain news

14) Be Bold - Do Not Panic (Easy said than done!)

15) Use Time tasted tools: Trailing STOP, STOP LIMIT, LIMIT, MARKET PRICE

Last modified: 2009-11-27