Use stock strategies rather than your emotions as a guide

Can your stock strategies help you to answer these 5 important questions in stock investment?

  1. What stocks to buy?
  2. How much to buy?
  3. When to buy?
  4. When to sell to limit losses?
  5. When to sell to take profit?

If you can't answer the 5 questions, you may not have a concrete strategy.

2 objectives in using stock strategies

Your investment capital is your hard earned money. You MUST protect it at all cost. Having a strategy is the first step towards preservation of your capital. Implementing a stop loss strategy can be the most important step to attain this goal.

After you learn how to preserve your capital, the next step is to achieve a reasonable return on your investment. You can use a stock profit strategy to attain a balance between your risk and reward.

Should you need help in developing your strategy, you can use my model strategy as reference. Modify it to make it your own.

If you need more convincing in adopting a strategy, read on.

Minimize human emotions like fear, hope and greed

We tend to feel the wrong emotions at the wrong time. When the price of your stocks goes up in price, you fear that you may lose your profits but instead you should hope that it will go higher.

When the price of your stocks go down in price, you hope that the price will come back up to your entry price instead of fearing that the price will drop even lower.

Have a base for gaining solid market experience

In order to learn from your mistakes, you must know what you did it in the first place that lead to a loss. From there, you can learn what you did right and what went wrong so you can adjust it in your next investment.

Over time, you may gain solid market experience and profits with your investments in the future.

Have the confidence to invest when everything seems to be going downhill

At market bottom, the financial news headlines are usually bad. When you wait until the news gets well, it may be too late to invest.

By using a systematic approach to invest, you will have the confidence to invest amidst all the negative headlines.

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