Important rules for Investment

It is always important to remember certain important rules for all investors before trading in stock market,

1) Do not invest with borrow money. 

People always hope that the price will go even higher at the current price. So, they choose to borrow money to increase their stock portfolio.  This is not highly recommended, what if the stock price drop? No one can guarantee what will happen tomorrow, even on the market.

2) Diversify the portfolio

Everyone should diversify their stocks. Do not only 'ALL IN' in one single particular stock as the risk is way too high. Over diversify also quite difficult as too many stocks to monitor. Hence, please only select those stocks that you have done your detailed research on it.

3) Cut loss 

This is the most important rule, everyone should set a "Cut Loss" price for every stock. Many people loss a lot of money due to they do not perform a cut loss system. I will explain further on cut loss in the next blog as it involved Technical Analysis.

4) Invest as early as possible

Everyone learn from mistakes. By investing early, you could understand more about stocks and you might achieve the best returns after many years of investment. Always remember, stock investment is not a Rich Man's Game, anyone could be the stakeholders and gain profits throughout the years by dividends.

5) Avoid poor earning companies

Never invest into a company that have been losing money for the past few years. Normally, i will not invest in those companies that have negative earning (Not even a single year for the past 10 years).

6) Fundamental research

If you purchase stocks without a proper research, you are actually gambling money and you may lose money too. Hence, it is important to make sure that your selective stocks are not overpriced or no growing company. Fundamental research include PE, ROE, EPS, etc. I would be explaining it in details in the later part of the blog.

7) Do not over trading 

When a person over trading on the stock market, they will lose their conscious. They will slowly becoming a gambler and slowly they will lose track on their originally planned strategies. A good investor will only invest in a good fundamental stock and hold it for many years. For instance, the way that Warren Buffet invested in Coca-Cola.

Besides, I came across that Barclay Wall Street has set 10 Power Commandments rules for their employees, which it is quite interesting as it teaches people to respect their job as well as themselves while doing working in a investment banking.

Invest smart and don't lose money on the stock market.

Upcoming Malaysia Market Trend

Alibaba's (Jack Ma) is planning to invest a huge amount of money into Malaysia as everyone knows. Which means that Malaysia technology stocks would be taking a huge advantages as he would either acquired or work together with the local technology company in order to build up his e-commerce market.

As this so called "Investment" by Jack Ma has not been confirmed between the government and him. But some of the stocks have already overrated on the news and his visits to Malaysia. For instance, XINHWA, 5267 and GHLSYS, 0021.

XINHWA, 5267. Recently, they have build up an ecommerce website (e5buy.com) which have actually attracted china investors.

When the news released, the stocks shoot up straight. 

GHLSYS, 0021. They have already signed an agreement with Alibaba on Alipay in Malaysia. Which means, the future of this stock could be highly considered.

A high volume and a gap after the news released

 For TA, we could consider looking at the support line. Once it hit the support line without further dropping, we could target the price to about 1.78.

According to Public bank research, there are also 7 more technology companies that we all should be aware. For instance, (PUC, 0007), (MTOUCHE, 0092), (KGROUP, 0036), (XOX, 0165), (NETX, 0020), (M3TECH, 0017) and (MNC, 0103). Besides, other than Technology stocks, CIMB and Maybank have also signed an agreement with Alibaba on the Alipay mobile wallet. In which, it may lead to another higher breakout.

Investment Tips: Always remember to set a Stop-loss for every investment.

Support And Resistance in Stock Market!! So Easy!!

When it comes to stock investment, there are many different books with different perspectives in the world. Most people doesn't really care and only know "Buy Low and Sell High". Who doesn't know? But in fact, how should we achieve it?

I have been studying about stock investment all around the world by many different authors (Obviously, i am still reading now) and i am going to give you all a simple Tips which i have concluded in most books.

Instead of "Buy Low and Sell High", we should "Buy Support and Sell Resistance". The most easiest way to trade in the stock market is to always find the Support of each stock as well as the resistance. However, we need to first identify the trend.

1) What is Support?  It is a level on the chart where buying interest is stronger than selling pressure.

2) What is Resistance? It is a level where selling pressure overcome the buying interest in the market.

KLCI Trend by Trading View

The Red Color line is the Support whereas the Green Color Line is the Resistance. The support line will be formed when the stock movement together with volume could not break through. Then a BUY signal appear. In the same, when the stock movement and volume cannot break through the Resistance Line, SELL signal appear.

For some investors, they will try to put a Buy signal on 28/12/2016 at 1630.3 (Support) and Sell Signal on 20/02/2017 at 1712.58 (Resistance). A beautiful profit could be make within 3 months.

In conclusion, earning in the stock market is not gambling. We should put more effort on doing some Technical Analysis or research, that's how we use money to earn money. Please remember, must always need to find the support and resistance together with a very high volume in order to gain the profit.