Frequent Asked Question
This is crazy. This afternoon when I opened my Windows Live Mail, it was flooded with email. At first I thought my email was being spammed or there is a virus in my computer. At a closer look, actually bulk of the emails are from readers of this blog. This is the first time in my life that I received such a large amount of email.
Basically, there are 2 categories of email. First category comes from those who want to invest with me in the Unit Trust using their cash and CPF. I will contact you all 2 weeks later to fix an appointment as I need to clear up my appointment for these 2 weeks first before I can schedule new ones.
The second category comes from those who asked me question related to the stock market. I will not reply to these emails because the questions are almost the same. Instead, I will post it here as FAQ.
Qn 1) What is my trading style?
I am a swing trader.I will hold my position for 1 day to a few months. I only intra day trade on penny stock. I will key in my stop buy/sell and stop loss orders in the evening. If my orders are triggered the next day, the trading platform will automatically buy/sell the stock and set the stop loss for me. I will shift the stop loss progressive each day as the price goes up until my stop loss is triggered. You need to be patient and allow the stock to grow. Most of us need to wait for 1 month to get our paychecks. Likewise for stock, you need to wait for a month for your paycheck!
Qn2) What is stop buy/sell?
There are 4 types of orders in the online trading platform. ‘Stop buy/sell’ and ‘Limit buy/sell’ order.
‘Stop buy’ order means my order will be executed only if there is a buy transaction done at that price.
‘Limit buy’ order means the trading platform will buy at this price or lower. ‘Stop buy/sell’ orders are usually offered by foreign broking house. You have to clarify all these issue with your broker.
Qn3) How do I know whether the BBs and Traders are buying/holding a stock.
I have a system to track the BBs and traders buying/selling activity which is not shown in the blog.
Qn4) Do I use Fundamental Analysis in my stock pick/trading?
I don’t use FA. If a stock has a nice uptrend but the fundamental is very bad, I will still buy/trade it because stock market/price moves 6 to 9 months in advance of the economy/fundamental. The fundamental of this stock may improve in the next few quarters. On the other hand, if a stock has a superb fundamental, but the price is flat or downtrend, will you buy it?
Qn5) How to be a successful trader?
To be successful in anything, you need hard work. If you want serious result, you must be serious in what you do. I believe everyone can be successful. It is just that you have not found that ‘MISSING LINK’ to success yet. People like Warren Buffett are successful not because they have 2 brains or 4 hands, it is just that they have found their MISSING LINK to success.
Qn6) My view on stock A or the market? Will this stock A go up again?
I really don’t know and have no answer to these questions. I trade and invest according to the chart. The chart is my BOSS. He says move, I move because he pays for all my bills, give me an income and provide me with a pension fund.
Qn7) Should I sell away this stock now?
I always put stop loss in all my trade. If you trade without stop loss and when the market moves against you, things will get very messy. Your emotion will be affected, you cannot sleep well which in turn will affect your work. In short, don’t trade if you dont want to use stop loss. There are always other means to grow your money like investing in a Unit Trust Fund,etc.
Qn8) What is my target price for stock A?
I only know the target price for ‘chart pattern’ formation. If a stock entry price is based on chart pattern formation like a bull flag, the targeted price will be stated in the blog. Usually, I will try to ride the trend of the stock till it turns or the BBs are selling it. How much profit you can earn depends on how long you can sit on the trend.