Good Principles for the Best Free Online Stock Trading
May 29, 2010 Business, Income Streams
Think about these principles when buying stocks and shares.
If you caught an employee stealing everyday – would you fire them or hope they stop? There’s no difference between that employee and a stock that keeps stealing your hard earned money as it goes down.
PHD’s verses Grandma: patterns repeat over and over because human psychology never changes. The most difficult part of trading is accepting you’re wrong and taking a small loss before it becomes a huge loss. That’s why a grandmother, who has more mastery over her emotions will make a fortune, while a rocket
scientist who has an ego problem and can’t accept his or her fallibility will go broke.
A great company is not always a great stock. E-toys (an online toy company) was valued at over a billion dollars. The price just kept going up. Soon the company, the stock and the billion dollars was gone.
Volume is vital. If a stock is trading higher on high volume it’s likely to continue. However if the stock’s price is increasing on low volume, then less people believe the stock is worth that higher price.