Keep INVESTING Simple and Safe (KISS) ****Investment Philosophy, Strategy and various Valuation Methods**** The same forces that bring risk into investing in the stock market also make possible the large gains many investors enjoy. It’s true that the fluctuations in the market make for losses as well as gains but if you have a proven strategy and stick with it over the long term you will be a winner!****Warren Buffett: Rule No. 1 - Never lose money. Rule No. 2 - Never forget Rule No. 1.
Tuesday, 15 June 2010
Sideway Trends
When the price of an asset, e.g. a stock moves sideways, it is difficult to trade on momentum and apply the trend-following techniques because a trend reverses shortly after it is established.
Once a sideways trend is identified, one can profit by investing long or short once a stock price touches the lower or upper trend line.
(Another strategy is also to write/sell options to collect premiums.)
Sideways trends can persist for a long time. Nevertheless, it is also important to know how to stop such a short-term trading technique when longer-term trends return.
Those with long-term goals may or may not wish to incorporate the above short-term trading techniques for a small portion of their selected good quality stocks which are in obvious sideway trends. However, always remember to buy low, that is, at prices that are closer to the lower price boundary.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment