I have always been interested in stock trading. It allows one to participate in business without actually need to start one. I didn’t have a formal education on this area but to me, it is as simple as finding a balance between market confidence towards the company, companies profitability, gauging markets response towards news and understanding patterns of speculation. I managed to win a Stock Trading competition straight out of college without any prior experience on the matter. Following are some of my thoughts.
- Bottom reversal – When a stock is crashing, there’s always a reversal. I have managed to profit 40% from a crashing stock, from 1.00 to 0.10.
- Company’s buy back – When an established company’s stock plummeted to near IPO, given the good companies track record, it could mean it’s just a shift in asset by investors. The company will buy back its stocks to boost confidence. The same with newly established companies. Newly listed companies might not have a good track record but they will strike a deal with investors to stabilize their stocks.
- Loss of momentum after spikes – Usually after a sharp spike from news, the stock will lose its momentum.
to be continued…