| What are the limits that you need to define to make | | | | stock, holding it with them for longer in a hope to |
| stock trade a more comfortable experience? Why is | | | | earn more. However, there is a good chance that the |
| it necessary to predefine the limits in the stock | | | | traded stock price falls, and once it is so, they lose, |
| trade? How do these limits navigate our stock trade | | | | instead of winning profits, which could have been the |
| to a success? | | | | case if they had let the stock traded out when its |
| When it comes to stock trading, it is always | | | | price had risen. See, how greed plays its adverse role. |
| important to keep a firm grip on your greed. This is | | | | SETTING A LOWER LIMIT |
| because though it is the wish to earn some easy | | | | On the other hand there is a similar cause for why |
| money that allures you towards stock exchange, | | | | you should set a lower limit for the stock. Since |
| excess of anything is bad, so is the case with greed. | | | | expectation always sparks in mind, you cannot |
| You can't kill it, for it is a normal human nature, but | | | | believe that you have lost even when there is a |
| you can and have to control it, for the sake of its | | | | good depreciation in the value of the stock in the |
| own satisfaction. If you have a good patience and | | | | stock exchange. You expect the stock price to rise |
| control on greed, you are ultimately going to make | | | | and even if your stock broker suggests so, you don't |
| some good bucks, which gratify your greed only. But | | | | want to trade the stocks away. What might happen |
| the points to remember is never let your greed | | | | is the stock value falls further down, causing a |
| blindfold you. | | | | greater loss. If you would have sold the stocks when |
| This is where setting limits discover their significance. | | | | you see it falling up to the lower price limit you have |
| The point is: | | | | set, you would have lost, in deed, but a planned and |
| "Whenever you trade stocks, you have to set an | | | | affordable loss in the stock trade. But now you have |
| upper limit and a lower limit for the price of the stock | | | | lost greatly to the stock exchange. To avoid such |
| where you would sell the stocks you hold." | | | | great losses, you have to set a lower limit and stick |
| SETTING AN UPPER LIMIT | | | | to it. |
| Most of the times when you buy a stock, you | | | | So, you must learn to make wise decisions regarding |
| expect to retain it until the price rises, at least to a | | | | the lower and upper limits for price; when the stock |
| limit that gives you some profit even after paying | | | | price touches either of these points, you have to |
| your stock broker his fees. But this seldom happens | | | | trade away the stock even though you expect the |
| with the new chaps, who are kind of | | | | stock price to rise in the next few minutes. |
| over-enthusiastic and over-expectant from the stock | | | | This strategy protects you from bigger losses and |
| trade. Even when the stock price rises sufficiently, | | | | you can do the stock trade safely in the stock |
| they expect it to rise more and this greed driven | | | | exchange. Some good stock brokers also use this |
| expectation goes up and up. And they don't sell the | | | | strategy to play it safe. |