12 July 2011

My Thought on Buy Low Sell High or Sell High Buy Low

Basically there are too many techniques to buy low sell high OR sell high buy low. My thought on the technique above is:

We have to follow the trends

Why do we have to follow the trends? In Chinese, we call it "顺势而流”, which means that we have to follow the trend to buy and sell and not against the trends. When the whole markets are in down trends,
it is very hard for us to purchase the stock as the prices keep moving downwards. It would be like a falling sword that will hurt you if you hold it too hard. If you do not have the holding power, you have to sell it at lower price.


We have to against the trends.

Sometimes, people are getting greedy of the positive market outlook. They will tend to buy a lot of stocks and push the price even higher.
If we keep on following the trends, we will also get hurt by buying the stocks at higher price.


We have to ignore the trends. 

When you are too care about the trends, you will lose the opportunity cost. There is another theory to teach us to stay away from the market and be patience on the buy/sell signals to come.


Conclusion:

It is really depends on you to decide what to do and how to do when the market trend changes. Good luck in your investment!

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