26 July 2013

How to Trade with Confidence?

I have a friend whom he said he was a lucky guy. He loves trading and this is how he can trade with confidence:

1. Act Fast - he can be a day trader. In another word, he trades frequently in a day. He sometimes get latest info from his remisier/dealer, and after some calculation on the price trend, he entered and exited the market very fast. I believe he has been trained to be handle the trading activities as per normal. Sometimes, if you are taking it too hard, you will always suffer from the "heart pain" of losing and lose more subsequently when you act with fear / greed. So first thing you have to do is to know how far you can lose before determining your cut profit line. 

2. From his behavior, I noticed that he loves volatility or high performing stocks. Because he acts fast, so he normally entered at early stage and exited before the price collapse. Sounds perfect, but I know that out of 10, only 1-2 will be very successful in trading due to limitation on knowing himself well. 

3. He normally will look for bigger picture while also checking on particular price. He also likes to use fundamental ratio to filter out the so called speculated counters as if the counter has strong fundamental, he doesn't mind to hold for say 6-12 mths period.

4. For every trade, he will start with small amount and may accumulate when things go right or go wrong depends on situation. After all, I believe having strong belief in the counter and the holding power are the ultimate reasons how you can be more confidence in your trading. 

5. And last but not least, just set aside small amount for the trading while putting large amount in long term investment / savings. Do not fall in love with any speculative counters. 


  1. This comment has been removed by the author.

  2. Hi Jack,
    Delete the former comment for some correction. From your description, your friend is probably fallen between day trader to swing trader. If entry is going against him on the trading day or subsequent few days, he will exit with small losses. He will encounter frequent small losses, but few big gain will take care of the losses.

    Good writing.


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