Thursday, July 10, 2008

How do you fight stress from the stock market?

We all know that stress is bad. As an investor, it is very important to stay balanced while trading because Monday - Friday you are in the game whether you like it or not. So how do you fight stress?

The key is to stay calm and be disciplined with your investing. Market induced stress can be caused by you being too involved in your daily routine and the second by second moves versus staying focused on the bigger picture.

How do you fight stress from the stock market? Here are 8 ways:

1. Use stop loss orders. Stop loss orders are like insurance, they are stock orders that will automatically sell your position at a pre-determined price if that price is hit anytime during the trading day. They remove the “do I sell now? Should I hold instead?” drama of investing and replace it with a disciplined strategy. They are also perfect for maintaining a strong profit vs loss ratio.

2. Dont watch your streamer live all day every day. The real time ups and downs of the market can really cause some temporary stress. If you are like me you have your real-time streamer streaming live quotes from your favorite stocks and the market all day. If you know you aren’t in the right mind frame it sometimes is better to just close the streamer for a few hours or the day and bring it back on tomorrow.

3. Refresh your portfolio balance only once a day. Are your stocks losing ground fast? Instead of refreshing your portfolio every 5 seconds and seeing fresh losses, wait till after the market is closed and then refresh your portfolio balance. Remember, your stop loss orders will minimize your losses for you so you don’t have to.

4. Have a investment strategy. Not having an investment strategy is like trying to play a sport blindfolded. Don’t be disorganized, trade with a plan. Every buy and sell should be part of that plan and as a result will greatly reduce any stress you may have. In fact, a well assembled investment strategy can mean the difference between daily stress and no stress at all.

5. Eat healthy foods. Eating healthy can help keep your body well balanced. I personally enjoy an Apple or banana almost every day while watching the stock market. Eating junk food doesn’t help stress because if your body isn’t happy your mind typically won’t be happy.

6. Get enough sleep each night. Adults should sleep on average 6 - 8 hours a night. If you are getting 5 hours or less of sleep and are wondering why you are more sensitive when your stocks open down take a look at your alarm clock. Getting that extra hour or two of sleep will make a big difference in how you react and respond to different situations throughout the trading day.

7. Don’t surround yourself with stressed individuals. You act like those who you spend the most time with. Take a look at your colleagues, and if they are investors themselves assess how they handle their own stress. If they are emotional investing evangelists screaming at the computer screen and breaking keyboards like :) ( you can co-relate dude...every where there is one) , you may want to take a step back and reconsider how much time you spend with that person.

8. Stay calm in intense situations: stop, think, then act. Perhaps the most affect way to fight stress is to take those stressful times head on with a calm mindset. Remember always to stop, think, then act. This applies with everything from making a tough call with a unknown earnings report coming up to finding your portfolio down several percent on the day.

Until then.

Happy Trading.

And Keep Commenting/Suggesting.

Hakim Jamali

Friday, August 3, 2007


Hi Frnds,

I am sure you all know it, but still these guidelines can be very helpful for you in trading.
Follow it and you can see the difference.

<> Research for safer quality stocks
<> Study trading ranges
<> Buy on dips and sell on peaks
<> Implement money management techniques
<> Don't be greedy
<> Short-term plays

<> To reduce chances of major drops
<> Follow just a few stocks – know them intimately
<> Invest in best of each segment to reduce risk
<> Pick good industries – follow trend
<> Pick stocks with "good numbers" (fundamentals)
<> Pick stocks with good management and public imageBUYING ON DOWNSWINGS;

<> Know each stock's historical trading range and focus on last 60 days
<> Chart peaks and valleys and find entry and exit points that the stock hitsfrequently

<> Pick a budget you could tolerate to lose
<> Be prepared to cost average frequently
<> Enter 50% of budget into 1st position, and 50% into 2nd position
<> Cost average when your stock bottoms out and settles to new low level only,don't cost average just because it dips

<> Generally, try to make 50 - 100Rs /share; don't focus on percentage
<> Place sell order for day only if you can't watch the stockREDUCE RISK BY…
<> Avoiding positions with earnings coming out
<> Down or out of favor industries are to be avoided / remember these are shorttermplays and we're not investing for the long term

<> Take any profit you make as often as you can because stocks move up and down by nature
<> We're not waiting for the stock to turn or make significant moves
<> We're not trying to find the stock that can hit us a homerun

<> Sometimes you just have to bail out because time is money
<> When to? Stock drops more than 20%
<> Then what? If stock was good before, it will probably be good again. Buy it back and cost average once it finds a bottom. Then don't wait for it to come all the wayback, sell it at the top or near the top of its new trading range and repeat until you recover.

<> Cost average at 20% loss level
<> Sell out beyond 20% and wait for bottom and new range and trade-out
<> Scottrade, E-Trade etc…STAY ON TOP OF YOUR STOCK LIST
<> Keep abreast of any major bad news and delete from list immediately
<> Study and search for new stocks continuously

Suggestions and Comments are most welcomed.

Thanks & Regards
Hakim Jamali

Wednesday, August 1, 2007

Tell Me Whats your pick of the day??

Hi Frnds,
In this section YOU and I would share which all shares look fundamentally strong in order to buy, and also which all shares can give good returns long /short term depending on the markets volatality.
I would also appreciate if you could list those stocks which are on red alert and holding them can be risky.
If you are holding some shares and want some suggestions, your queries are most welcomed.

Until then.

Keep posting and helping people.

Remember one thing 'Any Money is Good Money'.
So enjoy trading.

Thanks & Regards
Hakim Jamali

My First share

I am very much new to share market.So i thought i will observe the price movement of few shares for sometime and gain some knowledge. One of the share Intra infotech when i started looking on it is initially some Rs. 20 /- and in 10 to 15 days it reached 32. so , i thought ok this share is moving up daily by a rupee and also the price is less, i will buy this share and bought it. But from the very next day it started falling down. Currently the price is at some 18. I sold a few days back at rs 19/-.

So frnds dont get too enthusiastic. know the company well in which u r investing,whats the trade talk( u got so many websites ) etc etc.

Bye for now

Thanks & Regards,

Be Rich And Happy

Hello Friends,

As you all know share market of India is full of oppurtunities. Well I know a lot of risk is involved
but with proper knowledge, money management and courage any one can make leaps and bounds in this game.
Here I and 'YOU' together can make a lot of difference. We can share our knowledge and experience about this so called 'risky game' but with full of oppurtunities, which can help us to earn and learn.
Suggestions are most welcomed.
Hoping to see an active participation from your side.

Thanks and regards
Hakim Jamali