Is Bull market easy? Well, people who don't trade will definitely think so. Any monkey can make money...yup. Well monkey can make easy money. The problem is with humans - people who can think and believe that we are smarter species and in that smartness we do the dumbest things. I wish we were all monkeys
In Bull market, more than finding a new idea - the most difficult thing to do - Have a goal and then sit tight with a good idea till that goal is accomplished. Let me explain what I mean:
Future Consumer stock broke out around early part of Feb and I shared the stock as Momentum Breakout Play Live Case study back then. This is how stock looked back then on daily chart:
Now the stock broke out in Feb, rallied 30-35% and then pulled back to levels of 30 resulting in 12-14% move by end June 2017. How boring performance in a momentum market? What's the point in holding a stock that just gives 12-14% returns after 4 months. I wish I would have taken profit at 35. Yes, that's the thought that crosses most of the people's mind. And it is this thinking that forces you out of a good stock much early.
Now, just see what stock has done between July and September. It's up more than 2x. Here's the weekly chart
Now holding on to the Future Consumer looked like stupidity around June time turned out to be great hold by September. One of the most important thing in trading breakouts in a bull market is exhibiting patience and letting buy and ride strategy play itself out. I understand it's very difficult when you have limited capital and you cannot buy every momentum stock in the market - you do run out of patience and play the Chase and Churn game which always ends in disaster.
One can have 5-8 stocks in the portfolio and they will not run just because you want them to run. Be content....unka bhee number aayega 🙂 https://t.co/bcr2thYXFZ
— Deepak Singh (@smarket) September 19, 2017
Do share your story and thoughts on the above.
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers