Monday, 5 October 2015

How to avoid losing from buying stocks too early?

I bought AGI the other week with the feeling that touch down the bottom price but I was wrong, it went down again today by 0.62%. The index recover 1.63 percentage gains closed at 6,961.93, showed a strength as of today's movement. If you are able to pick at the bottom last week probably you will have at least 5% gains from Bloom, PLC, MCP, TA and MBT.

How to avoid losing from stocks?

First, Learn both fundamental and technical analysis. 

Fundamental analysis is the cornerstone of investing. At least, you should know how to determine the fair value of stocks or the possible target price. Terms such as Dividend Yields, PE Ratio and Fair value should be part of your vocabulary and  you will be able to calculate it yourself.

Technical analysis will help you understand the historical patterns and predict the possible directions of the stock. Choose a method such as Japanese candlesticks, harmonic patterns, Elliot Wave, PAM strategy ( etc..etc.

Second, Don't follow the Gurus, Follow your instinct.

After learning the fundamental and technical analysis, it's time to evaluate the graphs and charts and recommendation of all financial gurus and mentors in the battlefield. If you are going to press the buy and sell button, clear your head  and  take responsibility of the action. You will shoulder the gains and give credit to yourself instead of shoulder the loss and credit to financial guru.

Third, Set the Entry and Exit Point.

Whether you are into trading or investing, entry and exit point will determine your paper gains and losses. You should buy at the good entry point after calculating the possible lowest support and sell at the highest resistance (Technical). Buy at the undervalued price and sell at the FV price(Fundamental).

How about you?

Feel free to share your strategy on how to avoid losing from stocks.

Sincerely yours,

Jonathan I. Ruiz
P.S. I will be launching a new book, I hope to get your support. Kindly comment on this blog what you want me to include on the book;

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