Perhaps, it is a form of luxury to know what you must no do in life and you are able to do it without the fear of not having enough money to survive later on.
No goals in life! No plans in mind! Nothing!
And you know what?
I like it this way very much, truly.
No politics and related bullshits to deal with so that you can truly focus on enjoying the present in great peace.
Just lazy strolls, sitting on a beach, reading some books with some nice, calming and soothing music being played in background.
Perhaps, such moment is yet to come. I really want this day to come true.
I miss it, madly.
Wednesday, May 22, 2019
Saturday, May 4, 2019
About Technical Analysis
Recently, I started learning technical analysis (TA) because I have multiple instances where after I bought shares at near 52 week low, the share price just continue to plummet. In some extreme cases, I lose about 20% in a particular stock in just few weeks after I bought the shares. So, to minimize the risk of capital loss upon entry, I decided to equip myself further on TA.
After weeks of learning, here is what I can summarize so far:
a) Do not swin against the trend. If the share price is in downward trend, I should wait for the downward trend to reverse before I initiate my long term position on that stock. Do not simply average down.
b) Resistance and support lines exist because human bias comes into play when buying and selling shares. Some investors bought shares at the peak and unwilling to cut loss when the share price plummeted. They continued holding on to it and hoping that the share price will eventually rises back to its break even point so that hey can sell those shares in relieve. That's how the resistance line formed. Support lines formed when buyers bought the shares because they saw the current price coincides with the previous lows.
c) Trading is about making money on market trends. Do not make trades if the trend is not confirmed or is against you.
d) Share price movement coupled with trade volume information could reveal more information on the possible trend sustainability/reversal and market emotions. Volume spikes and share price drop tremendously during panic selldown. Also, after Trump won the general election in 2016, the subsequent trade volume spikes and the US S&P 500/DJIA Index point rises to historical highs.
e) For Malaysian and Singaporean market, there is a need to keep close eyes on the US S&P 500/DJIA Index because US economy has strong influence on both markets. Since the last Dec 2018 till now (as I wrote this post), DJIA index is near its peak but still unable to break 26,700 points for the third time. If DJIA is still unable to break the 26,700 resistance line in next few months, the chances of DJIA to go self-correction is high. So, I believe I could make some profit by shorting the DJIA index through CFD contract once the trend reversal begins. Right now, I am in the process of opening new CFD account.
Dont get me wrong. My core investing style will still be dividend investing. But, I do not restrict myself to just one investing style and I want to have an open mind on exploring other possibilities because they are many ways to earn money from stock market. I want to try if swing and position trading can be used to generate additional stream of income for me. If this strategy works, I can use this income stream to further build my dividend investing portfolio. It it doesn't work, at least by then I would have acquired great learning experience.
After weeks of learning, here is what I can summarize so far:
a) Do not swin against the trend. If the share price is in downward trend, I should wait for the downward trend to reverse before I initiate my long term position on that stock. Do not simply average down.
b) Resistance and support lines exist because human bias comes into play when buying and selling shares. Some investors bought shares at the peak and unwilling to cut loss when the share price plummeted. They continued holding on to it and hoping that the share price will eventually rises back to its break even point so that hey can sell those shares in relieve. That's how the resistance line formed. Support lines formed when buyers bought the shares because they saw the current price coincides with the previous lows.
c) Trading is about making money on market trends. Do not make trades if the trend is not confirmed or is against you.
d) Share price movement coupled with trade volume information could reveal more information on the possible trend sustainability/reversal and market emotions. Volume spikes and share price drop tremendously during panic selldown. Also, after Trump won the general election in 2016, the subsequent trade volume spikes and the US S&P 500/DJIA Index point rises to historical highs.
e) For Malaysian and Singaporean market, there is a need to keep close eyes on the US S&P 500/DJIA Index because US economy has strong influence on both markets. Since the last Dec 2018 till now (as I wrote this post), DJIA index is near its peak but still unable to break 26,700 points for the third time. If DJIA is still unable to break the 26,700 resistance line in next few months, the chances of DJIA to go self-correction is high. So, I believe I could make some profit by shorting the DJIA index through CFD contract once the trend reversal begins. Right now, I am in the process of opening new CFD account.
Dont get me wrong. My core investing style will still be dividend investing. But, I do not restrict myself to just one investing style and I want to have an open mind on exploring other possibilities because they are many ways to earn money from stock market. I want to try if swing and position trading can be used to generate additional stream of income for me. If this strategy works, I can use this income stream to further build my dividend investing portfolio. It it doesn't work, at least by then I would have acquired great learning experience.
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