Can you trade stocks yourself? How long have you been exploring the world of stock trading? How much profit did you get? What stocks do you usually trade?
You may often encounter these questions if you are a trader, especially if you have been trading for more than 2 years. So, the problem is: Have you been in the stock market for a long time (above 2 years), but you often lose (often cut losses)?
If yes, then I will review one of the main causes. Of course, there are other causes, but what I will discuss in this post is also a very crucial issue for traders. So, the main reason you often lose is that you have not been able to determine the preferred stock for trading. Read the post: Traders Must Have Preferred Stocks
What do you mean by preferred stock?
Preferred stocks mean those stocks that are the most comfortable for you to trade and the ones that generate the most profit for you. "Then, how do you determine stocks of that type?" Ask you.
Once again, I emphasize that the capital market is subjective. Everyone's assessment of stock predictions can be different. So, in determining preferred stocks for trading, of course I can't explain the formula for you, because every trader must have their own preferred stock depending on their type.
But what is clear, the characteristics of preferred stocks are:
1. The stock is not a third-tier stock (fried stock or penny stock)
Fried stocks are very erratic direction. In fact, even technical analysis is difficult to predict the movement of fried stocks. You can earn a lot in a day, can lose a lot in a day. If you say fried stock is your choice, then obviously it's not your preferred stock, but rather you are just speculation.
2. These stocks are the easiest for you to predict and almost always right
The stock feels very familiar to you. You even seem to have memorized where the support and resistance lines are. You already understand in what price range the stock will go down and in what price range the stock will rise again.
3. You feel comfortable if you put funds in the stock and it is proven to make a profit for you
You seem not to hesitate to put funds in the stock when the price has reached the support point. When you buy the stock and sell it you make a profit and you feel comfortable with the stock.
4. Perhaps, you most often trade these stocks.
If you often trade in certain stocks, then it could be that without you realizing it, these are the stocks of your choice.
If you don't have preferred stocks, choosing preferred stocks can be started by monitoring the movement of liquid stocks, such as LQ45 stocks, then you slowly select these stocks. See, whether the increase is too long, or stable enough as well as the decline.
If the increase is too long, I suggest it is better not to use it as an option stock. Unless, if you have a trading goal for the mid-term. One of the stocks that are good for stock options are: Liquid stocks (can be seen from the volume or LQ45 list), rise quite fast and fall quite fast but not fried stocks Examples are MPPA and PWON.
"Then, what is Mr. Heze's own stock of choice?"
Personally, I don't have a lot of stock options, because in my opinion, the preferred stocks should not be too many, at least 3-6 stocks are enough. My stock options are PWON, MPPA, GIAA, SMRA. In the first place, it is PWON stocks that I like the most. The first time I traded in the stock market, it was PWON stocks that I bought the first time and until now, my portfolio has mostly traded PWON stocks.
But keep in mind, that stock options are not absolute. That is, the stocks that you used to be proud of, may not be your stock of choice anymore.
Well, how can that be?
OK, let's see an example that I experienced myself.
I used to have a stock option, namely APLN. I often traded in 2014 until April 2015. I have earned money from APLN shares many times. However, I am starting to see signs that APLN's shares are starting to become illiquid. If you don't believe it, when the market opens, try comparing APLN's stock queue with WIKA or UNVR. Surely the APLN queue is far less crowded.
And sure enough, at the end of April 2015 the stock market crashed, I still held APLN and the price dropped I quickly cut my loss. Until now, I have never held APLN and the stock price is not as successful as it used to be. I finally removed APLN from my preferred stock list.
So, if you are a trader, you must be required to actively monitor the market. Being active here doesn't mean having to monitor every minute, every hour, but at least you have to take the time. Take the time to monitor the selection of your preferred stocks.
The valuable lesson from this post that I want to share with you is this: You have to own the stocks of your choice. Do not let you do not have. Because, it is proven that most traders can make money because they do have stocks of their own choice. The number of shares of choice does not need to be too much, at least you have 3-6 shares is enough. So that you are not difficult to monitor its movement.
Not having stock options causes you to have a greater potential for losses. Please read the next post: Traders Must Have Preferred Stocks (Part II).
