With FBMKLCI and FBMSCAP languishing at its low of the year, it has
become increasingly difficult to for retail investors who are more
inclined to short term trading approach to make money from share
trading. The common question in many people’s mind are how low can the
stocks continue to drifting downwards. While as the main indices
dropping, technically the stocks valuation should be looking cheaper and
presenting a more value buy if the companies can maintain or achieve
its previous profit records. However, in our case here, while some of
the stocks are starting to show ‘value’, the broad macro sentiment on
weakening world economic growth is the main concern among many
investors, particularly when the bigger institutional players are
unwinding some of their index link core holdings and the exodus of
foreign funds which have hit almost RM10.0 bil in the first 10 months of
2018.
For the short term traders, it is even more important that we
constantly remind and psycho ourselves that we should only enter a
position when the probability of winning is high and not just because
the stock is getting ‘cheaper’ or just because we don’t feel easy
without having a trade for the past few days. Some people trade for
“fun” and ‘”excitement” without assessing the winning chance before
entering the position. It is more like having the ‘gambling’ habit.
To thrive and win in stock trading, we must have a set of winning
strategy and to follow the market sentiment and momentum especially when
we have the constraint of limited investable capital. Just because the
stock appears to be ‘cheap’ is not good enough reason to enter a
position as all short term entry must be supported by volume and the
correct chart patterns that is up trending. Hence, that is what I mean “
don’t lose” as the first psychological trading rule to win.
As the main thrust of short term traders is to ride on the price
differences caused by market volatility, we have to focus on the skills
to identify the pivot point where price are about to break out which are
supported by common bullish technical indicators. That too would
require the understanding to identify stock at its various stages of
trade cycle to increase the chances of getting a wining trade. Hence,
this is the time that requires a little more hard work to find stocks
that meet the right chart patterns, volume and timing.
Short term trading is all about ‘timing’ as we don’t usually average
down unlike ‘value investing’. Even then with the very low cost offered
by stockbrokers for online trading, there is also not a very good reason
to average down. If the stock trend is weak and trending down, one can
always sell first and then buy back later when the price stabilized.
However, that would require some understanding to read the transaction
flow and trading records. If we wish to trade short term, it is best
that we read up and learn some basic skills to identify the
characteristic of the various stages of stock cycle and the bullish and
bearish chart patterns to better prepare us to ride through the storm.
Join our workshop now!
1. Title: Discover 5 key stock trading rules to change your lifestyle!
Date: 16 Dec 2018
Time: 10 am – 12 pm
2. Title: Chance to convert your contacts and business network into another recurring income stream
Date: 16 Dec 2018
Time: 2 pm – 4 pm
