Are you caught in the Anti-Wave?

Are you caught in the Anti-Wave?

Does that happen with you that whatever you buy makes a loss to you and whatever you don’t buy goes up? Do you think you are “unlucky”? Does that happen with you at times?

It might not happen with you, but it does happen with a lot of people.

You can’t be expert in all the areas. Be it studies, be it cooking, be it sports, be it anything else… You might be exceptional in some areas, average in some, and bogus in some. Markets do not move in the same fashion always… At times there are situations that your adviser is master of, and then there are situations that he is not expert at. Theoretically, you should spot the scenarios which are unfavourable and try to avoid them… But its easier said than done. You can’t do that because you don’t know the outcomes in advance. Here you = adviser.

What I have seen typically per my interaction with clients is: Clients try to “speculate” about an analyst… Like “His calls are going good, I am watching from 20 days, so now I will also buy”… “I trust his calls” etc etc. What happens is that when an adviser enters the favourable phase, he delivers good ideas… Clients watch him for sometime, and when they are “satisfied”, then they start trading with him. The thing is: till the time they start following him seriously, he has probably entered his top or a lot of good time has already past by… The client might enjoy a few trades at the max and then come the loosing bets. Whatever happens, happens in series. Then the client looses his confidence on the analyst again and starts “speculating on him” again… He starts analysing his performance and by the time he improves, he is again past the half of good time atleast…. So, ultimately, who is looser? The client.

What should be done?

Speculate on stocks, not on people. Take a fixed amount of disposable money as pure risk capital, and take trades of constant quantity everytime.

source; http://activetrades.in/articles/?p=236