First there are certain rules that apply for a minimum chance of risk...What and when to execute a buy and sell..Does this company have the potential? What happens when it goes against your DD and of course when it works in your favor..The most important is your investment risk..
Probably the most important factor is that a successful investor does not favor a long over short,but allows the market to tell which direct to trade.Many investors forget that profitability is the direct result of a good exit strategy and on the the hand a good entry gives the potential to a great profit..
All the DD in the world is immaterial if you do not have a clear,well focused reason for buying and selling..Always remember, a buy/sell occurs when somebody else that holds is considering the opposite of you..Consider the possibilities why a seller is selling and a buyer is buying...Many times one will consider the reason for an investor to sell is other than the company has lost it's objective (needs cash)hardly a significant reason and probably is actually not the reason at all,but the former.
This brings us to the second reason,why stay in a company and ask yourself if the course has changed.
This is the one area that investors always fall victim to..Is the objective still in play and what happens when it moves against you....The mind set of investors will go through all sorts of false sense of rational reasoning, starting with the biasing of the company and how it trades..
Many investors that have looked at dilution as a form to average in and think that by doing so, will give them the edge in acquiring mores shares at a lower price.Although, this may be true in the near-term,but your risk factor of losing has greatly increased...This approach is not at all reasonable and should not be applied with a company that has shown their only means of staying in business is printing more shares.
The other point of assessing if this is still a good investment has been greatly over exaggerated....First, the notion that a company,because it has aligned themselves with top tier companies and these companies would not target a company that is about to go under or has problems is not actually the point or the issue...
Look for some danger signs..If none come to mind,this itself is a danger sign..Every situation has some problems or issues of concern..If you feel no anxiety or concern about an investment,you may be denying problems or just closing yourself off from what otherwise would be part of your DD.
Always establish exit points,such as stops or watching support levels being broken, an indication of a downtrend.Whatever method and each of us has different approaches,make sure it will give you enough time to cut your losses.The critical thing is to have the discipline to act on the warnings as soon as it arrives.
One of the great charts to follow is "Candlestick Charting".This type of charting allows the novice a more pictured and understanding of support and resistance than most other type of charts...The candlestick technique analyzes two investment considerations,emotions and common sense or investment sentiment.
Here is a great candlestick chart website and is an absolute must in your investment endeavors..
http://www.litwick.com
When the market forces works against a trader, the first thought comes to mind, if I hold will it come back...This is the first mistake and will result always in more losses than gains...
Always know when to hold'em and when to fold'em..
Have a good day and as always apply sound DD...
ET
Probably the most important factor is that a successful investor does not favor a long over short,but allows the market to tell which direct to trade.Many investors forget that profitability is the direct result of a good exit strategy and on the the hand a good entry gives the potential to a great profit..
All the DD in the world is immaterial if you do not have a clear,well focused reason for buying and selling..Always remember, a buy/sell occurs when somebody else that holds is considering the opposite of you..Consider the possibilities why a seller is selling and a buyer is buying...Many times one will consider the reason for an investor to sell is other than the company has lost it's objective (needs cash)hardly a significant reason and probably is actually not the reason at all,but the former.
This brings us to the second reason,why stay in a company and ask yourself if the course has changed.
This is the one area that investors always fall victim to..Is the objective still in play and what happens when it moves against you....The mind set of investors will go through all sorts of false sense of rational reasoning, starting with the biasing of the company and how it trades..
Many investors that have looked at dilution as a form to average in and think that by doing so, will give them the edge in acquiring mores shares at a lower price.Although, this may be true in the near-term,but your risk factor of losing has greatly increased...This approach is not at all reasonable and should not be applied with a company that has shown their only means of staying in business is printing more shares.
The other point of assessing if this is still a good investment has been greatly over exaggerated....First, the notion that a company,because it has aligned themselves with top tier companies and these companies would not target a company that is about to go under or has problems is not actually the point or the issue...
Look for some danger signs..If none come to mind,this itself is a danger sign..Every situation has some problems or issues of concern..If you feel no anxiety or concern about an investment,you may be denying problems or just closing yourself off from what otherwise would be part of your DD.
Always establish exit points,such as stops or watching support levels being broken, an indication of a downtrend.Whatever method and each of us has different approaches,make sure it will give you enough time to cut your losses.The critical thing is to have the discipline to act on the warnings as soon as it arrives.
One of the great charts to follow is "Candlestick Charting".This type of charting allows the novice a more pictured and understanding of support and resistance than most other type of charts...The candlestick technique analyzes two investment considerations,emotions and common sense or investment sentiment.
Here is a great candlestick chart website and is an absolute must in your investment endeavors..
http://www.litwick.com
When the market forces works against a trader, the first thought comes to mind, if I hold will it come back...This is the first mistake and will result always in more losses than gains...
Always know when to hold'em and when to fold'em..
Have a good day and as always apply sound DD...
ET
