Free Falling Markets – Valuable Tips Part 1

Okay so you might think “What makes her soo darn qualified to give stock tips?” Well, Haha, I am certainly not qualified to tell you how to make money. Rather, I shall deal with the finer things in life — How NOT to wipe out you entire life’s savings 🙂 As I have learnt and rightly, the word “experienced” in the stock market is associated with someone who encounters very heavy losses. I think you’d know by this time how “experienced” I am in that field!

But then, enroute to these catastrophic losses, you learn some very valuable lessons so here I am blogging and giving you the gyan 😉

Lesson #1 : Don’t be impatient – Oh and how many times have I done this!! When the elders say, “Patience” is a virtue, Listen to them..Refreshing your demat site some 20 times every 2 minutes is not going to get you the price you want. So stay away after giving your buy order for the day.
It’s like, you give a buy order for say, some share for 196 Rs..And then you see, inspite of your refreshing it a million times, its just not coming to 196..on the other hand, its actually hovering around 198-200.You Immediately change the order to 198 and trust me 95% of the time, the next minute would see the share price fall to some 194 and you’re like.. DARN!! So just go with your initial gut feeling which told you that it will come to 196..if not today then tommorow so dont be hasty.
Lessons #2 : Don’t be greedy : Sigh..yes many a finger has been burnt by being greedy. Its good to have high expectations from your stock but have a limit to your expectations. Don’t wait for an indecently exorbitant profit. Keep a limit of say 20%..and SELL it when it reaches your limit.

My story goes like this..I bought some shares of some company D (Am not revealing the real name of the stock just to keep the post a little mysterious ;)) , at 800 Rs and slowly with time D rose to around 1200.So what would you have done? just SOLD IT, Right? But nope..Greedy me just did not allow it..Greedy Me thought” Hey if it can reach 1200 it can reach 1500 too” ..But fairy tales seldom feature stock markets in them..and D crashed..to an all time low of around 400 and with very less probability of rising above 600 again.. 😦 You get the moral of the story right??

Lesson #3 : Don’t take “share” price tips seriously — Yes don’t listen to anybody because nobody can predict market sentiments accurately. Even if the person giving this free gyan is your uncle, brother, aunt, friend (unless that friend is from some reputed i-bank ;)) Never take it too seriously.Do your own research, make your own call about a company and THEN invest your money. I had the misfortune of taking my uncle seriously when he mentioned that some company, call it N ( Continuing with the mysterious touch) will touch 500 when it was around 463 (Ofcourse the same uncle now claims he could never have said that) but neways I bought N’s shares at 463 and then began the free fall..And for every 50Rs that it used to fall, I used to buy 50 more shares in the hope that SOMEDAY i’d offset the loss. So as of now I have some 300 shares of Company N at an average loss of 150 per share..Double yayy..

Also to be mentioned is how you should NOT go to say, moneycontrol.com , pick a Lucky share at random there, read 2-3 comments about how its the next big thing and how it will sky rocket in 2 weeks and end up buying it.Strict No-No..There are malicious evil people in this world, who will say promising things in the hope that the price WILL go up if enough dump people exist in the world who will read their comments and buy it :p..grrrrrrr…And unfortunately I was playing with “futures” (More on this when I come to lesson #4) when I picked this.So company S’s comments said that there will be a buy back of shares at a price  100 rs higher than what it was going at , in another 2 weeks,.But as MY luck would have it, it never went up..the idiots did the buy-back at a much lesser price!! And S is one of the more predominant contributor to my loss now..3 cheers for S..heepp heeepp hurray…ugh

so Yes I have done enough dumb things to last me a life time and No I still haven’t stopped trading !

Gosh, I have so many more things to warn people about,but some other time..soon..

To be continued….

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