Hi guys,

let share stock buying your stock buying strategy. I have no deal with stock market at the moment but i am interested to get involve in this field. Still in the process of registration with RHBinvest.

BTW, this is my idea:

Buy stock that price lower than RM0.20. Let say I buy at RM0.20/unit for 10000 units which is will cost me RM2000 + ~RM30 (for all those fees - online trade rm28) = RM2030

let say the stock that we bought is increasing by RM0.05 then we sell it .. RM0.25 x 10000units - RM30 (fees) = RM2470.00

So, our profit is RM440 for it which is +- 21% of our capital.

My point of view is buying <0.20/unit stock will get more return (%).

Am I correct? how about your guys? please share and comment about my idea .. tq ..

if your total cost is RM 2K, it should be 100,000 units, not 10,000 units.

and yes, you are making RM 400++ bucks if you were to buy at RM 0.20 and sell at RM 0.25

=============

as for stratergy, at the price of RM 0.20, i assume it is either a penny stock or most likely, a call warrant.

you ought to purchase in big volume (like you said, 100,000 units) in order to see the return.

Yes. High return % but it's also high in losses in the other point of view. My advice do to it diversify, don't put all your eggs in a busket.

aik .. 0.20 x 10000 = RM2k .. not 100000 .. if not, 20k for 100000 units .. ..

is it easy to increase 5 cents ( in a couple of days) for around 20 cents stock price tag? what is your opinion in this? ..

haha you can try and see. i used to buy 100,000 shares of call warrant, and hoping it to jump up just a mere 0.005 and i'd be very happy

guess what, the price went downwards, never come up until now

hoho .. that make me scare to buy cheap stock la .. .. i will go with rm1 price tag la .. smaller return in % but smaller risk .. .. come2 .. share your opinion ..

Please understand that it is the percentage of return that matters, not the stock price.

A return of 10% for a RM0.50 stock and a RM40.00 stock is the same.

Sorry to tell you that, wrong. On paper or theory, might be. Reality not.
For a stock of Rm0.20 to increase 5 cents (25%), it is not easy task, (except CWs that tight to the mothershare movement). You can see those Rm0.10 stock, hardly move Rm0.005 at all even traded 100K of volume.

If a stock is only traded (apart from CWs) at Rm0.20, it must have a reason why it is traded at low price. Good fundamental stock generally won't be traded at low price even after splittng.

Generally (although not a must, due to massive stock split or number of shares issued, different story etc) low price stocks (a few to ten cents one)mostly consists of poorly fundamental stocks.

Movement of a stock is related to % wise, not cents.

Just my 2 cents.

Try it out, then you will know.

This post has been edited by cherroy: Mar 28 2008, 02:16 PM

Very easy strategy as simple as:

"Buy Low Sell High" or
"Buy High Sell Higher"..

There are 2 rules of thumb: First, "Not lose your capital" and second please refer to rule No.1..

Anyway, price do affect the return.
If you buy cw at half cent, your return will be 100% or loss all or just break even(minus losses of broker charges).

Those half a cents CWs are worthless and near to expire, bare in mind,

RM0.05 is 25% out of RM0.20.

Buying a RM1 share and wait for it to go up 25% also the same as waiting for a RM0.20 share to go up.

You might think a RM0.20 share is more likely to go up 25% than a RM1 share, please do not think that way. A counter whether it is RM20 or RM0.20 has the same chance of going up, all depends on their fundamentals or people trying to 'goreng' it. It's just that RM0.20 shares are more affordable to retailers, that is why they would normally buy those when it is going up rather than the RM20 shares. And they will also normally be the ones who get burned when the prices start falling.

RM2000 + 20% is RM2400, but always remember RM2000 - 20% is RM1600.

Always remember to look both ways when crossing the road. The stock market shares are the same, it can go up and down so don't always look at the upside only or you'll get wtfpwned by the downside.

This post has been edited by skiddtrader: Mar 28 2008, 04:49 PM

everyone thought buying share is simple but what lie behind them is big amount of knowledge they need to acquire before trade real. start with blue chip first kid before attempt with high risk stocks, this is the best way gaining trading experience before getting yourself burn in the first place. Learn to walk first before you fly. This is no easy business, my colleague with more than 20 years experience also get himself burn, needless to mention you are just a greenhorn.

Well said.

Hope that more people will share their priceless experience here.

I am still learning, as a kid. Haha...

me too .. as a green kid .. .. just get my account ready for stock trading today but i have yet to start buying .. ..

still in the process of learning and understanding .. .

Seng_kiat, from your recent posts you seem to have this excitement to get into the market and make money. I know that excitement and I believe many have gone through it as well. But I have to caution you as much as I can to do your research and read as much as you can about the market before entering your first orders.

Don't worry about lost opportunities and don't fret on it. Don't let the excitement of earning money cloud your judgement. I would really recommend you try the CIMB virtual iTrade for practice first but that's up to you.

Good luck and don't stop learning. Don't survive on spoon-fed news and tips from the media or us, formulate your own ideas and interpretations.

thank you very much for your advices .. I really appreciate it .. i am new kid in this field and i must study and learn from the expert .. .. if you guys willing to share idea, tips, etc, feel free to post it for benefit all of us here .. ..

Don't look for tips, but learn what is the market about, fundamental of stocks etc.

Looking for tips is like wishing somebody to give you a fish, instead one should look how to fish.

Don't invest until you are familiar with and fully aware of the risk involved. It involves hard-earned money in stake, no play play

Welcome.

yeah cherroy is right. unless you have a gold mountain with unlimited of cash, different story

Word of advice. Don't ever play stock market with borrowed money. It will burn your backside if price drops like 10th March

Make sure you have cash in hand before going into the market. It is a wild wild west scenario there.

I started investing just before the GE. Out of excitement, I bought some stupid stocks which was cheap and also some blue chips. I am still stuck with some stocks which seems does not recover from the shock. Luckily I used my hard earned cash to buy it

In the meantime, I did make some decent amount of cash after that by carefully studying the market movement and playing contra (managed to recoup paper loss of my existing shares)

This post has been edited by dsugums: Mar 29 2008, 01:03 PM

u were jus like me when i 1st started tradin in stock market... too naive

y not open wit hong leong? they r using d same chart provider, jus dat hong leong is much cheaper.. min service charge is rm12 per transaction.. openin acc is FOC..

Out topic..

Need advise from expert. If i brought this stock at 1.50/1000 unit, how many % of increase of stock price should i let go/sell ?? 20% or 25%??

Thats totally up to you. You need to decide what kind of time line or trade you want to do before you buy a share. Some people want to buy something and keep it for a day because they know the share prices will not last, so they buy today wait for it to go up a little and sell it when they make a minor profit.

Where as some people do not intend to sell the shares they buy because they are confident of the counters they buy will increase over time. And will only sell in a few years time when they want to buy a house or car.

You have to know your limits and have some kind of strategy before you make a trade. Are you a day trader? Short term, mid or long term investor? How much money do you have as reserve? How much of a time frame do you have before you need to use the money for something else?

So the answer to your question is "You should know best". These kind of questions does not have straight answers and will vary from people to people.

This question is not a question at all whereby you won't get an answer.

Instead think of making money of 20-25%, you might be experience loss rather than gain. Sorry, not meant to pour 'cold water' on it.

You are the one decide what to do with your money, not others. There is not such thing of stock goes up 20% or 25% then one should sell.

TMY kia..,

Why the hell do you buy the stock to begin with if you cannot answer this question? That is the FIRST RULE of buying stock. You ONLY buy a stock when you know WHY you are buying.

Dreamer

actually, another fundamentals that newbie should know is to read the news. Try to get to know news before anyone else does. Of course you will not be the first to know but at least be the first few.

let say i read about change of board of director, should i buy or not?

or maybe collaboration between to company, should buy or not? .. hmm .. blur blur ..

You should have a Selling Price & Buying Price. Failing to do some, means that you have no proper planing in purchasing stocks. Advising you to pour your money into FD better.

Adviseable of not just buy stock based on news.
Look at its price movement (technical analysis theory) or other methods.
Sometimes, the news that been reported has been reflected in price chart before it has been release.
So when retailers get into it, other investors/big sharks begin its selling transaction ..and we as small retailer stuck became long term investor.

Do some analysis first before jumping into board.
"BUY ON RUMOURS, SELL ON NEWS"

This post has been edited by dreams_achiever: Mar 30 2008, 12:45 PM

WinDs,dreamer101,cherroy,skiddtrader,

Guys tks for advised, I feel i asking dum advised.

As I know, when i sell at certain price and other investor buy is complete trading . If the stock price rose 110% and i sell, is there ppl will buy???

This post has been edited by TMY kia..: Mar 30 2008, 01:12 PM

usually syndicate or big guys use this to trick u to sell or buy though... IMHO, u can lookout for ctr wit low volume either to sell or buy... dats d moment crowds wont monitor closely d counter...




wow, ur question so subjective leh...

let say u buy an antic watch for rm50, n decided to sell it at rm200, will i buy? well, it depends wat...if i see.. d value of it is more than dat, of course i'll buy

The stock market needs a willing buyer and seller, else there will be no trade. As long as there is no queue to buy, you can't sell and you have to lower your price until someone is willing to buy it, or hold it there for someone to buy it.

Same with buying, if no one wants to sell there will be no queue at the sell orders. So the buyers needs to increase their offer price to entice sellers to take it.

As long as there aren't enough buyers, prices will drop. Opposite for sellers, as when there aren't enough people to sell meaning they love their shares, the offer prices will go up to reflect the value of it.

That is why sometimes you see the prices plunging like when after the GE, prices for a lot of stocks drop a lot. That's because there are a lot of nervous shareholders who wants to sell but the buyers are also nervous and do not want to buy. Thus the prices slowly drop as the orders are done and since there aren't any buyers, the sellers always lower their prices and queue it lower and lower. If there are a lot of desperate sellers, and no one is buying, you will see the prices drop very fast as each seller try to out bid the other by lowering the prices as fast as they can.

For your question, if your stock increase by 110% and there are still people waiting to buy, then of course you can sell immediately. But if there aren't any buyers at the last price and the buy queue is still very low, then you can't sell at the price you want and it will be queued at the sell orders.

Read up more on how stock markets function from the internet or books from library which has plenty of examples and guides. You can't expect to learn everything from the forums. I have to agree with what WinDs said and put your money into Fixed Deposit and earn some interest while you are learning.

Edited to put into stock market thread.

This post has been edited by keith_hjinhoh: Mar 30 2008, 07:01 PM

i'm also newbie here & been thinking like seng kiat.

well, not buying for call warrant just stock from main board market like PMIND. what u guys think if its not CW?

at least there r movement in my acc rather than sleeping & waiting for it going up with small unit.
thinking to buy in big unit but small buying price.

This post has been edited by amy_LMNT: Mar 30 2008, 10:48 PM

The only reason people buy warrants are because of their leverage. In a bull market, warrants are extremely popular because as the main stocks rise, the warrants will follow. And in terms of percentage gained, warrants normally gives a better percentage. But beware as leverage is a double edged sword as it can go down as fast as well when the main stocks go down.

edited ..............

This post has been edited by Seng_Kiat: Mar 31 2008, 09:53 AM

Brokerage will kill you if you do that a lot. People think if the share price goes up, they make money. But they forget one thing, you have to pay for brokerage. Even if the stock goes up, you may still lose money if you sell, and it doesn't cover brokerage costs.


This post has been edited by wodenus: Mar 31 2008, 06:05 AM

i bought FTEC today at 0.24 for 10k units .. hope it will grow up later .. .

Well prices will be falling but you will get more shares since Bonus will be issued in April. 8:5 bonus issue.

guy,

is it the falling price will be the same value (plus multiply etc) the free given? lower value in total? or higher value in total? ..

The market will probably correct the valuations so it most probably will be almost equal the value it currently is.

The total market valuation is stil the same.

Eg. A stock has 100 million shares which is traded at Rm0.20, total market cap is 20 million (100 x 0.20). With bonus issue given out, let say 1 get free 1, then total share become 200 million but market price will be adjusted to Rm0.10, so total market cap still the same of 20 million.

It won't make company 'bigger' in this way.

This post has been edited by cherroy: Apr 1 2008, 09:10 AM

oo .. ok ok .. tq very much .. what do u think about this ftec master cherroy? .. is it has future to invest in? .. .. tq ..

Buy at May,Sell it at Dec...

what u mean? .. i din get it .

hhahaha dont think too much my friend. It is good you learn up some of the share trading especially Fundamental investment before you start investment

try out this investment site
www.investopedia.com
www.mybigcubicle.blogspot.com
www.marketguide.com


maybe you can learn from there and catch up the shre market invesment

There are two ways (which can be divided into sub groups) to select a stock to purchase or to sell short.

a) Technical, charting strategy

b) Financial and valuations.

Both strategies are very complicated, and those who are interested in purchasing stocks, options, futures should be very familiar of the underlying risks.

There is risk associated with your idea. What happens if the price don't go your way? Why i am saying this is normally these stocks tend to be less active compared to the higher price ones. You may be right if this is a good counter. To identify good counters, consider doing some homework(proper fundamentals and technical analysis)? There is no best time to buy a stock or sell a stock. You buy when you identify a good counter and sell only when you make a profit=) I assume this is your spare cash that you don't need urgently. Actually it doesn't matter whether it is a high priced or low priced stock. You can justify by checking the counter's pe ratio, dividends payout and the overall company's performance. You are sure to be on the right track buying good counters as they tend to perform better than the rest and produce consistent profits as well as to ensure high dividend payouts.

*it's just my personal opinion. please correct me in any areas i'm wrong=)

Buy oil, buy apple

Day trade if market volatile.

Hi all,

Just my experience.

Had my

1st try... after reading a book (general) in 2003... lost about 28% of my capital.

2nd try... learned technical analysis..and my peak with "technical" was the meeting with a "technical analysis" book author. Bought his newsletter with recommendation to buy hold or sell. Followed his recommendation... but after a year..lost another 10% of invested capital. My Conclusion at that time was that..technical is good for bull / super bull market & no way a retailer can make money in stock market.

3rd try.. after reading "value investing" started again in July 2006.. still learning & experimenting till now... hw as of last friday... made 14% compounded yearly.


it seems that the STRATEGY that works with me as a retailer is "VALUE INVESTING"

Hw there are many others who did make tonnes of money by using other strategies.

I see that you have just traded "using" fundamental analysis in year 2006. That was the time when the "superbull" happened.
So, even if you used technical or fundamental analysis, it would still bring you same results actually.
Saying fundamental is better over technical "during" a superbull run and in such a short period is quite unfair to technical analysis.
Fundamental analysis can ONLY be strong over long term periods of 10-20 years or beyond.

Just my 2 cents

Most ppl lose in stock because of greed speculating on penny stock. When u first started buying stock, u normally would invest a small sum, then as the price keep increasing, ur confident build up and u ll invest more....and more...and more.

Typical buying patern of most newbie speculator
at 0.10 buy 1000 unit
at 0.20 buy 2000 unit
at 0.50 buy 5000 unit. Greed start to set in. Buy more earn more.
at 1.00 buy 10000 unit. Getting more greedy

as we sell, u buy (as your confident build up)
at 0.90 buy 5000 unit Average down
at 0.85 buy 5000 unit Average down again
at 0.75 buy 1000 unit Average down again...getting scare abit

at this moment your average price is 0.77.

at 0.65 u realize something is wrong with this stock di and stop averaging down.
Most of the time, u won't dispose your stock totally, but sell bit by bit.
As the price go lower, you sell more. The slower u sell, the more lose u incur.

ure right Jordy, luckily in 2nd half of 2006 there was a bull run...

BTW.... my last statement did mention that many others made money using other systems .. (that includes technical analysis la bro)

its just "value" system fits me.

Also, my rough understanding at this moment is that Fundamental analysis is part of "value investing" but "value investing" is not Fundamental Analysis.

My view is

Value investing = fundamental investing.
Buy doing all the fundamental analysis eg. (business future, management, fair value of the stock)
Value investing is base on the above mentioned you give the stock a fair value. When the price of the stock exceed the value (which you think is overvalue) then
you sell it. If the business is good and have a constant growth then the time for us to sell the stock is almost never.

---

Added on August 5, 2008, 8:54 pmWhat i hated most is after you sold your stock you need to find for the next target. You have to do a lot of calculations and research for a new stock. As hopping from one stock to another increase your risk and probably your remisier will be the most happier by all the commision (thats y they always say if you earn 10% you better sell). But If you think the stock (business) is good and the value is there better hold them.

This post has been edited by darkknight81: Aug 5 2008, 08:54 PM

No, stock market has cycle so does individual stock.

After sell, don't need to buy again another stock, keep it in FD and wait for the downturn. If you are selling an overly price stock, 90% chance, you will able to buy back the stock at later stage may be 6 months, 1 years or even 2 years time. BUt definitely won't be next month or so.

You have to manage cash position and adjust it according to market situation. Stock market won't be bull run forever nor will go down forever. Look at long term chart, then you can easily spot out cyclical nature of the market. You need to have high cash level when market is in down trend. How? sell when stock is too high to sustain then keep the cash in FD and wait for opportunities. You need cash to tap on those bottoming opportunities which doesn't often come or pass by.

Just to correct my previous statement, what i mean is for you to buy another stock maybe you got to wait for months or even years to buy another good business base on fundamental analysis.

my view

Fundamental analysis produce data... hw the way the analyst reacts on the data determines the system of investing.

for eg.
- Lim & Buffett both use fundamental analysis and values company AAA for RM10. Hw when AAA drops down from RM18 to RM14... Lim cant take his fingers off from queing at RM14.
while Buffet will wait with discipline till the price reaches RM6 or at least RM7.

Buffett system of buying undervalued stocks derived from Fundamental analysis is basically defined as Value Investing.

Although Lim uses Fundamental Analysis too, Im not sure what investing system he's using...

and so my view is

Value Investing is not Fundamental Analysis..

Hw, Fundamental Analysis is part of Value Investing..

This post has been edited by asambuffett: Aug 8 2008, 01:55 AM

My strategies is earning/loss 20% then sale...

I do that also. As there are a lot of uncertainty even if it is the best company. It may turn to be worst tommorrow.

Yea, this can minimise you risk.
Please no greedy...

Investing is not Mathematics or Physics, and you do not have to know which is which. In stock market, basically there are only 2 systems:
- Technical Analysis (Charting and trends)
- Fundamental Analysis (Valuing a company through its books and prospects)

Be it Technical or Fundamental, both are also looking for undervalued stocks to trade/invest in. But the difference is Technical is short term and Fundamental is long term. When you do Fundamental analysis, you are in fact looking at the company's valuation (you are right at this point). Since you do not need a high IQ to invest in stocks, you do not need to know what is Value Investing and Fundamental Investing. Your way of fundamental investing could be different from my way of fundamental investing. There is not identical "system" so to speak. You can change the "system" to whatever that suits you. But the bottomline still stands, that you ARE investing based on the fundamentals.

I know that you are trying to trade using only valuations (ie you buy when it's undervalued and you sell when it's overvalued). But do you really know when it is undervalued or overvalued? No one knows, because good businesses will keep growing, so does the value. The best way to keep your investment growing is to keep invested as the company grows. That is what I call a good "system".

http://www.investopedia.com/terms/t/technicalanalysis.asp
dun think technical looks for undervalued companies. They look for trends of companies.

have to agree on that. Even my way is not 100% Buffett.. maybe 25%

True, nobody knows... we just go with the assumption that we find logical (individually)

thats a good system.