Thanks for your sentiments
@Banker. What started off as an intention to offer some words of support to a fellow traveller on the journey towards financial security ended up as a sort of confessional. Truly humbled by the response. Maybe my early experiences resonated with a lot of people.
I've often thought what could have helped me in my first stint avoid the trouble I got into and came up with the following list:
- Knowledge of supply and demand and how it affects the share price.
- Basic knowledge of the FA of a stock and some grounding in TA. I strongly believe there should be a standard basic TA quiz you need to do before you are able to start trading on a personal trading account.
- Eliminate FOMO as much as possible. It will lead you down the road to ruin. As
@minoil always says, there will always be another stock that will come along.
- Lack of hubris and ego - Just because you have a few successful trades early on, doesn't mean you know what you are doing. In fact it causes problems down the track because you can't identify the error as you are doing the same thing when losing money as you did when you had a few trades. Of course no one wants to think it can be a fluke.
- Lack of emotion and not falling in love with a stock. It is understandable to an extent. You think you have found the best thing since sliced bread and get a boost when it goes up. When the price goes down, you get mad and can't understand why others don't see what you do in the stock and get all emotional and can't bear to sell out at a loss.
- Following and buying any old stock tip you see on forums without investigating for yourself first. What is the motivation for the person spruiking the stock? Are they part of a trading syndicate trying to manipulate the price for their own ends, a paid shill, an average Joe? Trust no one initially, including myself and always keep your guard up. Read their posts objectively. Do they have a history on the stock threads of coming in like a blowhard, posting about XYZ about to breakout, creating excitement and then moving on leaving you high and dry after the SP falls?
- Read the STT knowledge library. Wasn't around when I started but IMO should be the first place people who are new to the market and HC should go to. There is a link to it at the start of every weekly thread.
Having said all that, sometimes you need to wear a big loss to learn a lesson. Some learn better through personal experience than reading about what others have gone through. I just thought some of the points may be of help to a newbie even though every so often one of the wise old heads (eg Old Stud/Foss
) posts something similar to what I have just done. There are always a few new posters here and no doubt many more who just read without posting who could find something useful in this post.
Philosophy over. Next post will be a chart.
