I felt sorry for my friend who got burnt by the recent selldown as he received margin call from his broker. He was devastated and swear NEVER to get into the stock market again !
Such is the brutality and reality of the market. Each day, hundreds of thousands of people throng into this market, carrying a hope to take out some money at the end of the day. Some succeeded, many failed. That is how the market makes money, collecting money from the majority and pays off the minority. Yes, in a way, it is similar to the concept of insurance. The mortality rate is fewer within the policy period so premium collected over this period is used to pay the lump sum payment of a few and the balance is the insurance Company profits.
I had shared previously that this game of trading or investment has a relatively low barriers of entry and the media does not help by portraying some of the trainers out there claiming to make millions or easy money out from the market, be it forex, options, cryptocurrency.
That is nothing but a marketing ploy to attract you to attend their courses! Making money out from the retail investors is much easier than forking out their own capital to trade or invest. At an average of 3000 for a 2 days course and if 10 people signed up, that is 30,000. After deducting the expenses, he is left out easily 25 to 27K profits or capital.
At 1% return, he can make 250 to 270 profits from the market. And that is conservative. Imagine if he has double or triple the students intake, that would be 90,000. Assuming 85,000 profits , @1% returns, that comes up to 850 profits (which is not his own capital, he raises it from you guys).
Having a large capital base definitely help in achieving your financial goal as it takes shorter time compared to someone who has a small capital of 1000 to begin with. To generate the same returns, he needs two things. One a much higher return, say 5-10% and/or a longer time frame.
In today's fast pace society, who has the patience to wait ? Given a choice, I think all of us wants to retire at 20 or earlier, right ?
Let's return to the chart. On the Day chart, I showed you a similar historical pattern being played out in 2018. Both the current market and 2018 show a double top formation before the plunge. While the current plunge is much more severe, a straight 90 degree down compared to 2018 where there were several pullbacks. The latter is good and normal, allowing short sellers opportunities to get in. Not for the current one. If you missed the first or second one, unless you are gutsy or gambling, most will not dare to chase the falling knife.
What is positive about this pattern is the trend reversal. Both have a closing candle that is bullish in nature. 2018 had a bullish engulfing candle while last Friday close was a close bullish hammer pattern.
To help me gather more confirmation on my analysis , I employ a few other tools :
1. The current candle is sitting on the 61.8 FIB level - another positive trend reversal pattern
2. RSI - 2018 was at 20+ and it rebounded, now we are at 16+, in the oversold region
3. Macroeconomics side - Fed in a rare statement is going to lower interest rate next week or so.
With all these information, I am positive of a strong rebound next Monday onwards and on last Friday closing, I took a small bite to test my theory once more. I definitely hope to be able to average up as the price returns higher.
In the previous analysis, I was way off and suffered a loss.
To me, the fastest way to learn is to stick to the one chart that you had incurred losses and understand the mistakes you made rather than jumping to another promising trade setup. The same mistakes will resurface again. Or should I say , the fear inside of you will not go away until you face upfront with the monster and take him down with confidence. Only then and then, your confidence goes up one notch and your skills and experience will not be the same again.
Yes, as I have said , trading and investment is a brutal game. That is why many after suffered some losses do not want to trade again. Where you focus is where you put your attention to. You focus on the losses and that is what you get. The opposite is also true. I think, I see, I hear and I definitely feel the profits coming to me strongly by the day, weeks and month.
Self affirmation without injecting the emotions inside is futile as it is nothing but a chant that does not resonate with your heart. But if you truly believe 100% that you can win in this game (and you need not win everytime to make money), then your attitude towards failure or losses will be different from others.
Winston Churchill - Never, never ,ever give up !
See you on the TOP !
Such is the brutality and reality of the market. Each day, hundreds of thousands of people throng into this market, carrying a hope to take out some money at the end of the day. Some succeeded, many failed. That is how the market makes money, collecting money from the majority and pays off the minority. Yes, in a way, it is similar to the concept of insurance. The mortality rate is fewer within the policy period so premium collected over this period is used to pay the lump sum payment of a few and the balance is the insurance Company profits.
I had shared previously that this game of trading or investment has a relatively low barriers of entry and the media does not help by portraying some of the trainers out there claiming to make millions or easy money out from the market, be it forex, options, cryptocurrency.
That is nothing but a marketing ploy to attract you to attend their courses! Making money out from the retail investors is much easier than forking out their own capital to trade or invest. At an average of 3000 for a 2 days course and if 10 people signed up, that is 30,000. After deducting the expenses, he is left out easily 25 to 27K profits or capital.
At 1% return, he can make 250 to 270 profits from the market. And that is conservative. Imagine if he has double or triple the students intake, that would be 90,000. Assuming 85,000 profits , @1% returns, that comes up to 850 profits (which is not his own capital, he raises it from you guys).
Having a large capital base definitely help in achieving your financial goal as it takes shorter time compared to someone who has a small capital of 1000 to begin with. To generate the same returns, he needs two things. One a much higher return, say 5-10% and/or a longer time frame.
In today's fast pace society, who has the patience to wait ? Given a choice, I think all of us wants to retire at 20 or earlier, right ?
Let's return to the chart. On the Day chart, I showed you a similar historical pattern being played out in 2018. Both the current market and 2018 show a double top formation before the plunge. While the current plunge is much more severe, a straight 90 degree down compared to 2018 where there were several pullbacks. The latter is good and normal, allowing short sellers opportunities to get in. Not for the current one. If you missed the first or second one, unless you are gutsy or gambling, most will not dare to chase the falling knife.
What is positive about this pattern is the trend reversal. Both have a closing candle that is bullish in nature. 2018 had a bullish engulfing candle while last Friday close was a close bullish hammer pattern.
To help me gather more confirmation on my analysis , I employ a few other tools :
1. The current candle is sitting on the 61.8 FIB level - another positive trend reversal pattern
2. RSI - 2018 was at 20+ and it rebounded, now we are at 16+, in the oversold region
3. Macroeconomics side - Fed in a rare statement is going to lower interest rate next week or so.
With all these information, I am positive of a strong rebound next Monday onwards and on last Friday closing, I took a small bite to test my theory once more. I definitely hope to be able to average up as the price returns higher.
In the previous analysis, I was way off and suffered a loss.
To me, the fastest way to learn is to stick to the one chart that you had incurred losses and understand the mistakes you made rather than jumping to another promising trade setup. The same mistakes will resurface again. Or should I say , the fear inside of you will not go away until you face upfront with the monster and take him down with confidence. Only then and then, your confidence goes up one notch and your skills and experience will not be the same again.
Yes, as I have said , trading and investment is a brutal game. That is why many after suffered some losses do not want to trade again. Where you focus is where you put your attention to. You focus on the losses and that is what you get. The opposite is also true. I think, I see, I hear and I definitely feel the profits coming to me strongly by the day, weeks and month.
Self affirmation without injecting the emotions inside is futile as it is nothing but a chant that does not resonate with your heart. But if you truly believe 100% that you can win in this game (and you need not win everytime to make money), then your attitude towards failure or losses will be different from others.
Winston Churchill - Never, never ,ever give up !
See you on the TOP !
Comment:
www.bloomberg.c...k-market-bottom?utm_medium...
Trade active:
Long 25200
SL 24736
SL 24736
Comment:
www.marketwatch...rout-2020-03-02?mod=home-p...
Unless you have a knack for picking individual company, buying the Dow Jones index or SPX500 is also good. Maybe, it may not perform as well compared to some of the companies but the broad based pull up is still very good. I do both, selective companies and also the index. Do what suits you, based on your capital, risk appetite, trading style, etc.
Unless you have a knack for picking individual company, buying the Dow Jones index or SPX500 is also good. Maybe, it may not perform as well compared to some of the companies but the broad based pull up is still very good. I do both, selective companies and also the index. Do what suits you, based on your capital, risk appetite, trading style, etc.
Comment:
Guys, wish I could high 5 all of you. God is great for he continues to rain his blessings upon us, again and again. When sometimes, we doubt ourselves and were unsure, he is faithful to his words. Believe in the Maker.
Comment:
Praise Lord. For those who hanged on and not let the gyrations shake you out are rewarded. Trading is really a psychological game of faith pitting against one another. The camp with more faith will topple over the weaker one and win the game. Be it index, commodities, currencies.
Whose side are you leaning on today ?
Whose side are you leaning on today ?
