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Share trading for short term, daily traders.

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Kasparas
Traffic Value: $291.18605 United Kingdom
29 like this post 0 people
05/07/2015 22:42
Hello mytrafficvalue community. As the title states I am intending to help traders with getting a better approach at share trading in the market. The methods I will talk about comes from my personal knowledge base of Forex (foreign exchange) trading and I will do my best to give you my approach of the market trading that could be adaptable to MTV's share market.

Before getting started, you have to understand the definitions of some terms I will use which are as follows:

Trade - a transaction between traders where one buys(opens) and another one sells(closes).
Stop Loss - a stop loss is a point where a trader a trader closes the trade at a loss (or breaks even).
Target profit - A point where a trader closes the trade and earns profit.
Break even point - a point where a trader earns or looses nothing. (+- $0.00)
Risk management plan - a specific set of rules that a trader must follow in order to preserve the balance and take profit consistently.
Entry point - the point where a trader opens a trade (buys shares).

Now that you know and understand the above stated terms, you are ready to continue reading.

The correct mindset.

For each trader, the correct mindset is one of the most important elements of success; emotions play a bigger role than you know. In order to successfully trade, you need to understand that you cannot always be a winner. Sometimes you will win, sometimes you will lose, but you will win as long as you use correct money management plan about which I'll talk in the next graph. Picture the following scenario: you buy X amount of shares at 0.02 price, the price climbs as high as 0.1 and you sell your shares making the profit that one time, so you decide to buy another set of shares at 0.10 but this time the price drops below 0.01. Do you understand what you did here? You've let your loosing trade drag on to wipe out all your profit and even more. Controlling emotions means never letting them take over your hand. You must think logically when is the good time to sell, when is the good time to buy.

Money management.

As mentioned earlier, logic is the key to success and a set of rules you follow daily will help you achieve that. Everyone likes profit and nobody likes losses, so in order to succeed you must control both with a correct risk:reward ratio. Let's use profit and loss in dollars to explain and picture this: you purchase X amount of shares for $0.02; currently they are worth $0.00 (break even if you sell). The risk:reward ratio is 1:2 so that means your loss will be -$1.00 and your reward is +$2.00. (See the link below)

http://i.imgur.com/EUocNUy.jpg

The point of risk management is to let your profit grow while you cut your losses early before you regret not having done that later. The market volatility is impossible to know and the movement depends on many factor (which I will cover later)

Now picture a different scenario, the market is moving correctly and you are actually are in profit +$1.00 but you stop loss is still set at -$1.00; what this is is actually a wrong risk:reward ratio. At that point your risk:reward ratio is 2:1; think about it 1-2=-1. In order to secure your gains and preserve your balance you can do a simple manoeuvre to lock in your profit or preserve your current balance; all you need to do is sell your shares at break even point, remember you do not want to risk anything and you are not playing with fire. It is better to play it safe and consistent with your profits. (see the links below)

Scenario 1:

http://i.imgur.com/rByMr9X.jpg

Scenario 2:

http://i.imgur.com/Vzsyorf.jpg

Nobody likes math, but let's have a look statistically what are the possible outcomes if you've made 10 trades:

-1 +2 +2 -1 +-0 +-0 -1 +2 +2 -1

As you can see, all you really need to do is be correct 50%(break even trades included) of the time to be in profit. Now change the values of -1 into something larger, or change break even zeros into something else. Doesn't look right does it?

The bottom line is that you never know when is the good time to buy or when is the good time to sell, you can only speculate or use fundamentals to help, but primarily using a set of rules to manage your trades is a sure deal.

Price behaviour analysis.

Unlike in Forex markets, MTV share markets do not give traders tools to perform technical analysis, fortunately you are not powerless; fundamental analysis is your best friend to understand the market behaviour. I've seen it, you've seen it and everyone else did - when, for example someone creates a roadblock the price tends to go down - simple right? When company officials make public statements, price tends to go one way or another either. For example, at one point Jo was making negative statements in public's perspective and therefore the price was going down. Another example is the release of revenue making products or an increase of members, investors. These kind of announcements and statistics work as catalysts and nudge the price one way or another. The important thing about fundamental analysis is staying on the logical side, think things through, do they make sense? For example, something happens which increases number of dividends each user gets per share, this tends to have an impact as more members may consider acquiring more shares to get larger dividends in the future; would this increase the demand? - yes; time to buy!


Conclusion

I hope this little guide will help you with your daily trading; I've tried to explain as best as I could and if you have any questions I will try to answer as many as I can.
Catt
Traffic Value: $1,193.5857 Brazil
3 like this post 0 people
05/07/2015 22:57
Kasparas I do believe u should post your guide in the tutorials forum... it sure deserves to be there
Kasparas
Traffic Value: $291.18605 United Kingdom
3 like this post 0 people
05/07/2015 22:58
@Catt

It's there grin check again.
Catt
Traffic Value: $1,193.5857 Brazil
0 like this post 0 people
05/07/2015 23:06
Weirdly enough it showed to me under misc!!!
Great job
bpc1234
Traffic Value: $62,710.15909 United States
0 like this post 0 people
05/07/2015 23:06
Kasparas,
In your opinion, better to hold shares from debt swap or use them to make $ (day trade, ftq resell, etc)
Kasparas
Traffic Value: $291.18605 United Kingdom
3 like this post 0 people
05/07/2015 23:11
@bpc1234


In my opinion holding on too long is not wise. What I did was sell all the shares I had (which needed 0.3 to break even) and used the money to purchase extremely cheap shares (for 0.01 or less) and ended up having slightly more than I originally did. I think doing that and day trading is a way to go because my tutorial is all about short term ( plus minus a few days) trading. Long term holds way more speculation and uncertainty in my view.
julio9516
Traffic Value: $62.7518 Venezuela
1 like this post 0 people
06/07/2015 02:14
Hi Kasparas, I would like to know about FOREX, I don't know if you're willing to explain me about it.. give me your email, this is mine julioc1618@gmail.com.. Thankss
druth8x
Traffic Value: $22,417.44153 United States
2 like this post 0 people
06/07/2015 04:57
Wish I could understand at what point to sell.

I've tried Passive's put buy bids and sell bids around the current price b4, though that seems to only work if it actually moves & both ways. I also only have ~13K (virtually no cash, as price is so low with morale up, I prefer to just keep buying, ideally slightly under whatever current price is at the time).

Also, 1 tenth cent swing is the same as 5 1/10 swings both ways. So a lot of work for not much gain, unless you can get 5 2/10 swings b4 getting 1 1/10 swing. (Numbers may be wrong, but you get the idea.)

I only sell shares for BAP (Maintain Group lvl or when times are better if getting to a higher BAP lvl will probably out pace share profit, jumping a group) and to "daytrade" to increase my share total.

I understand that being in a 100/0 position is not good short term. Right now, the range isn't much of a profit, for me to understand how to not mess up too many times. I also understand losses do occur. I am more focused on profit margin than actual price.
Kasparas
Traffic Value: $291.18605 United Kingdom
2 like this post 0 people
06/07/2015 07:09
@druth8x


Nobody knows when is the good time to sell; all you can do is apply a set of rules and conditions. For example, if you use 1:2 risk:reward ratio and your reward line is reached - sell, if it's not, wait. If you are going into a loss - sell and cut your losses early. It's a matter of making the price work for you.
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