Stock Trading – What Every Investor Should Know
Every investor has his own take on “wise” investing. These suggestions come from experience, and are meant for the momentum investor rather than those who “buy and forget”.
investing, stock market,momentum investing
Never try to fight against a trend.
It may be tempting to buy a falling stock in order to average your costs. In fact, many investors seem to recommend such a step. In practice, in a majority of situations this only results in throwing good money after bad.
Always have a stop loss, for every stock. If your stock moves down, at what price must you definitely sell? If you do not use historical data and technical analysis to arrive at investment decisions, you must have at least a fixed-amount method. Meaning, before you buy you will have to decide how much loss you can comfortably take on that stock, and stick to it.
Never hold on to a stock position that has moved beyond your comfort level.
As the saying goes, take care of your losses and the profits will take care of themselves.
Keep track of your stocks. Even if your stop loss has been triggered and you have exited the stock, the stock could reverse trend and start a fresh uptrend.
As a momentum investor, you should resort to periodical profit book
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