Don’t chase the price!
A lesson I’ve learnt recently is not to chase the price no matter what the technical indicators showed. I chased the price of Hongguo at $0.34 (at the top) when I saw all Standard Six indicators showed bullish convergence, however the price retraced back to $0.27 within one week. Currently I am still at lost with Hongguo’s $0.31 today with thin trading volume. I will probably hold the stock for a longer term and wait to reach the my calculated intrinsic value of $0.85 (calculated before the recent Q2 2009 financil result).
The hardest part of the stock trading is to control the emotion, however I was able to control my emotion by delaying the action by one part after seeing Synear breakout from its triangle. I was very tempted to enter the trade at $0.285 but I kept reminding myself not to chase the price. Eventually I was able to enter at $0.275 and today Synear closed at $0.305, a handsomely 9% paper gain in one day!
Today I almost go to chase China HongXing stock price at $0.215 before the market close. Fortunately I was disciplined enough to wait for another day. Base on the candle sticks, the stock price failed to break the resistance and would probably retrace back to between $0.18 to $0.20. This gave me another opportunity to buy on a dip.
Lesson Learnt: It is OK to make mistakes but must learn how to prevent making the same mistake for the second time.