With this drop, it is a wonderful reminder of the importance of good money management practice. Always take note of what good traders do, Protecting Capital.
For short term traders: for those stocks that you have earned money but came down to breakeven, sell them. For those stocks that you have made a good profit, move your stop loss up to guard your profits.For those stocks that are in the red, all the more our stop loss is important to guard more losses.
By the way, do you remembered that in our past articles, we asked everybody to short the banks to act as a hedge? Well, the banks sure has fallen now. And if you have made money from the fall in banks following our call, congratulations. UOB has fallen $1 from its height at $20.
Our past article:
As an advice, next time when we think that the market is overheated, find some stocks you think may short to act as a hedge against your bullish position. And STI at 3240 is exactly the resistance like what we predicted!
On 2nd Jan, we issued an article to ask everyone to note of STI at 3240, the recent high is 3237 (3 points off our target, ha! Well I have to thank my sifu, Mr Hu Li Yang for his teachings)
At the same time, now I hope some of the stocks which I have been aiming but did not manage to get on board, come back to a reasonable price. Yang Zi Jiang is one of those.
By the way, I think all is not lost now, as I feel the real bear momentum has not come yet. It is still early now. US market is still ok. So I will still be looking at opportunities to look at some stocks should it drop and stabilise. Let us get really worried when February comes. The main bulk of stocks in US have not declared earnings yet.