Profits In Stock market
March 07, 2008
Profits In Stock market
By: Anthony Green
The time to hold on is when the tide is running in your favor. Never close a trade just because you have a profit. When tempted to close a trade just because you have a profit ask yourself the questions:
Do I need the money?
Is the move over?
Do I have to sell?
Why should I take profits?
Look at your charts, do what they tell you. If they do not show a change in trend, wait. Protect profits with stop loss order, but do not take a profit too soon. This is just as bad as taking a loss too late. Patience hold on when you are right and nerve to get out quickly when you are wrong will make a success.
Accumulate A Surplus
A surplus must be accumulated before you increase your trading quantities. Margins are not to hold on with, only lambs do that. If big risks are required, do not make the trade. Wait for an opportunity when you can buy or sell and place a stop loss order 3 to 5 points away. It is financial suicide to take big losses when they can be prevented.
You must not expand until after you have made profits. Every important business concern carefully creates a surplus and is proud to publish it. No business is run without a loss at some time and a speculator or investor must expect losses. Therefore, he must create a surplus out of which he can pay losses and still continue to trade.
In very active markets, when trading in high priced stocks, as a rule it does not pay to take a loss amounting to more than two consecutive days� fluctuations. If stocks go against you two days, they are likely to go more. Take your loss out of your surplus and leave your capital unimpaired and wait for another opportunity.
Buying For Dividends
The word dividend means a division of profits or earnings, but often when you buy Curb or mining stocks the word means divy, or that you divide up your capital with the other fellow and later lose all.
A great many people make the mistake of always wanting to buy stocks that will pay dividends. Do not buy stocks just because they pay dividends, nor sell them because they do not. Often people hold stocks because they continue to pay big dividends, only to see their capital half or more wiped out; then the dividend is cut or passed altogether.
Look to the protection of your capital, not for dividend returns. Trade for points of profit, not dividends. Fluctuations yield more money than dividends and you will be able to tell when stocks are being accumulated or distributed for an advance or a decline. If a stock is selling very low or out of line according to the dividend it pays, there is probably something wrong and it is a better short sale than a purchase.
If a stock is selling very high and pays no dividend, there is a reason for it and you should not sell it short. Probably it is going to pay a dividend or it is in a very strong position.
Otherwise it would not be selling at a high price. Manipulation for a time will force stocks above or below their intrinsic value, but in the end Supply and Demand govern the course of prices, and values are based on these factors. How to tell when Supply and Demand show the place where you should buy or sell.
By: Anthony Green
The time to hold on is when the tide is running in your favor. Never close a trade just because you have a profit. When tempted to close a trade just because you have a profit ask yourself the questions:
Do I need the money?
Is the move over?
Do I have to sell?
Why should I take profits?
Look at your charts, do what they tell you. If they do not show a change in trend, wait. Protect profits with stop loss order, but do not take a profit too soon. This is just as bad as taking a loss too late. Patience hold on when you are right and nerve to get out quickly when you are wrong will make a success.
Accumulate A Surplus
A surplus must be accumulated before you increase your trading quantities. Margins are not to hold on with, only lambs do that. If big risks are required, do not make the trade. Wait for an opportunity when you can buy or sell and place a stop loss order 3 to 5 points away. It is financial suicide to take big losses when they can be prevented.
You must not expand until after you have made profits. Every important business concern carefully creates a surplus and is proud to publish it. No business is run without a loss at some time and a speculator or investor must expect losses. Therefore, he must create a surplus out of which he can pay losses and still continue to trade.
In very active markets, when trading in high priced stocks, as a rule it does not pay to take a loss amounting to more than two consecutive days� fluctuations. If stocks go against you two days, they are likely to go more. Take your loss out of your surplus and leave your capital unimpaired and wait for another opportunity.
Buying For Dividends
The word dividend means a division of profits or earnings, but often when you buy Curb or mining stocks the word means divy, or that you divide up your capital with the other fellow and later lose all.
A great many people make the mistake of always wanting to buy stocks that will pay dividends. Do not buy stocks just because they pay dividends, nor sell them because they do not. Often people hold stocks because they continue to pay big dividends, only to see their capital half or more wiped out; then the dividend is cut or passed altogether.
Look to the protection of your capital, not for dividend returns. Trade for points of profit, not dividends. Fluctuations yield more money than dividends and you will be able to tell when stocks are being accumulated or distributed for an advance or a decline. If a stock is selling very low or out of line according to the dividend it pays, there is probably something wrong and it is a better short sale than a purchase.
If a stock is selling very high and pays no dividend, there is a reason for it and you should not sell it short. Probably it is going to pay a dividend or it is in a very strong position.
Otherwise it would not be selling at a high price. Manipulation for a time will force stocks above or below their intrinsic value, but in the end Supply and Demand govern the course of prices, and values are based on these factors. How to tell when Supply and Demand show the place where you should buy or sell.
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