how i made 2 million in the stock market This is a topic that many people are looking for. faithandmedia.org is a channel providing useful information about learning, life, digital marketing and online courses …. it will help you have an overview and solid multi-faceted knowledge . Today, faithandmedia.org would like to introduce to you HOW I MADE 2 MILLION IN THE STOCK MARKET SUMMARY NICOLAS DARVAS. Following along are instructions in the video below:
“Darvas was a dancer self taught investor and. Author he s most famous for turning. Turning. 10000 into.
2 millions trading in the stock market over the course of 65. He did this without any prior experience as a trader and later he wrote. I will summarize the most important advice from this book takeaway number 1 kill your darlings. One of the strongest and most dangerous biases in stock market investing is when you develop a liking for your investments.
No matter. If it s because a friend recommended it it was your virgin investment or you made a good profit from it it s a treacherous attitude to develop you must become an impartial diagnostician. Don t identify yourself with any stock don t fall in love with them when they rise or become angry with them and your surroundings. When they fall another tip.
Which doesn t come from this book is that when in doubt sell judging a stock which you don t own will allow your view to be much clearer also you don t burn. Any bridges. By selling because you can always rebuy later when i ve been using this strategy. Myself i have never bought back the stock again ever takeaway number.
2 buy on strong positive trends rising volumes. Continuing rising prices in a stock often means that some people know something that you don t by buying into the trend. You will benefit from these fundamentals. Without actually knowing anything about them yourself look also for rising trading volumes.
If a group of swedes decides to take a few breaks during the working day it s nothing out of the ordinary they are probably just taking a fika or two on the other hand. If you see a group of japanese do the same thing. It s definitely something to watch carefully just like a stock that used to behave in one way. But suddenly changes could be of interest.
The author talks about a techno fundamentalist theory. Which is a combination of technical and fundamental assessment before buying a stock. It should have the aforementioned increase in price and trading volumes. But the buy should only occur when improved earnings power.
Could be given as the fundamental reason for these increases. Improved earnings power is anticipated from companies that belong to new vigorous infant industry and sure for this to happen you will never buy the stock at its bottom. And that s not the point with this approach..
Either the point is to buy high and sell even higher takeaway number. 3. Cut your losses short let your winners run. There s a popular saying in wall street.
Which goes. Something like this it s true that you will win that specific battle if you take a profit. But will you win the war to follow do the exact opposite of what this takeaway suggests you will cut your winner short and let your losers run do you think that it sounds like a profitable strategy to win small and loose big no x. 5.
Agreed so how do you cut your losses short. Then a great tool to maximize your chances of achieving this is by using a trailing stop loss this is a technical tool that your online broker will offer. Which allows you to set a predefined price at. Which you will sell your stock this price will rise as the price of the stock rises and therefore.
It s called training. What this forces you to do is to accept your mistakes early if you find yourself in hold stop digging remember to keep the trailing stop at such a distance that meaningless swings in the stock price doesn t touch your investment. Off the volatility of a stock is a great indicator for how far behind you should trail your stops an additional benefit of trailing stop losses is that you will automatically be stepped out during crisis as we ve discussed earlier you cannot foresee crashes. But with a system like this such an assessment become unnecessary the market might change for the worse.
But by then you ll already be out of it and how do you let your winners. Runwhen you have a profit on a stock. The instinctive reaction is to sell you don t want to lose you gains right. It s a tough decision to take psychologically if you make the decision to sell in an upward trend you must think that the stock has reached its peak.
But you should never try to sell at the top anyone who claims to be able to do this consistently is just lying if you sell a stock while rising. It s a pure guess because you cannot know how far it will go this would be no cleverer a guess than anticipating that h m. Would stop its international expansion after its hundredth open store you can also guess that the expansion would stop after 200 stores or 500 stores. What would you be wrong.
If you guessed any of these figures. Because the persson family would be fools if they stopped the expansion at 100 200 of 500 stores. When all of them are constantly selling out and people are crying for h m clothes all over the world it is only when they start to notice increasing inventories and empty stores that they d consider halting the expansion. This is also the time when you re trailing stop loss will force you to leave the investment together takeaway.
2 and 3 lays. The foundation for the which is the strategy that darvas used to trade stocks successfully in the market. He creates a box around a specific stock for instance..
A 7 11 box around this swedish stock called fingerprint cards back march 2015. If the stock moves into a higher box. He would buy it in fingerprint s case. It soon moved upwards into say an 11 15 box this happened in april 2015.
And would have caused darvas to buy the stock may oscillate inside the box or establish a higher one. But never go back into a lower the lower bound of the box is therefore a point when you sell the stock darvas would have kept placing boxes on top of each other until december of 2015. Where he would have stepped out at around 110. This is equal to a 900 gain over 8 months stocks do not move at random.
They have a defined upward or downward trend. Which once established tends to continue takeaway number. 4. Create your own stock log book write down.
Reasons for buying and reasons for selling. There s a saying that it s a decision are still just mistakes. It will make sure that you are consistently improving and it also makes it easier to stay the course. If the market is going against you your log book will communicate what a normal book can never teach you much like a person never becomes a good driver by only reading about accelerators steering wheels and brakes all day get into the market and learn from your own mistakes here s an example.
Date. 16. 8. 2018 type.
Buy stock ericsson price. 79. Reason. For buying increased volumes.
Strong positive. Trend and great expectations for 5g. Date. 25.
2. 2020. Type..
Sell stock ericsson. Price. 171. Reason.
For selling stepped out by stop. Loss after a great upward trend turned downwards. Date. 16.
8. 2018 type buy stock gm price 366. Reason. For buying my cab driver told me that gm is developing a new electrical.
Car yippie date 1. 12 2019 type sell stock gm price 157 reason for selling. Oh. My god i should never have trusted my cab driver.
I should have used stop losses in hindsight. I think i should have bought tesla instead start to learn from your mistakes. Early as they are less costly. When you are young better to make a mistake at twenty that costs a few weeks of work during the summer vacation than doing them at 50 at the cost of half of your 401k takeaway.
Number. 5. Be the lone wolf stay detached to be truly successful in the market. You can t be the confused.
Excited lamb milling around with others you must be the lone wolf your ears are your enemy they will bring interruptions rumors panics contradictory information and more in a situation where you were bombarded with information. All the time. How are you supposed to stay calm. Neutral.
And avoid emotions ego. You can t for the author. This was most apparent..
When he moved to new york. After staying abroad for a couple of years. He thought that getting closer to the action was going to bring him even more profits wrong. He even abandoned his old proven system and investment philosophy.
For becoming a part of the wall street herd for a while this period. Proved to be the least profitable of his whole investment career. Maybe. This is the reason why warren buffett decides to live in omaha instead of close to any of the major financial centers of the world its summary time.
The first takeaway is that you should never allow yourself to fall in love with any particular stock marry personally like not your investments. The 2nd advice is to buy when a stock is showing signs of a positive trend and rising trading volumes at the same time as the underlying company has potential for earnings growth. Tip number 3. Is to cut your losses.
Short. And let your winners run number 4 is to keep a log book of your transactions this way you ll learn from your mistakes quicker. I m recording this while on a fishing trip in the northern parts of scandinavia to be honest. I m not even in sweden.
Anymore. I m visiting our scandinavian brothers in norway to stay true to myself and any viewers from our neighbors of norway. I will rebrand temporary today. I will call myself.
The norwegian investor instead. Oh. Almost forgot the final takeaway advice number. 5.
Is that only dead fish follow the stream. Don t be a dead fish instead be like a salmon fighting your way through fjords and rivers. Thanks for watching remember to comment. If you want me to summarize a specific book within the field of personal finance or investing also if you want me to elaborate on any of the takeaways from this video.
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