Here are some examples of market myopia:
a trader who does exhaustive research trying to identify the most
promising new technology companies but overlooks the fact that a 70
percent price rise in the sector during the past six months implies an
unusually high-risk investment environment
a trader who scrutinizes a company's financial statements and reports
but fails to realize that the company's soaring profits have been due to
a single product whose future sales are threatened by the imminent
entry of new competitors
a trader who is engrossed with finding better timing-entry methods
but virtually ignores such critical questions as: When and how will
positions be exited? How will risk be controlled?
All of these examples contain the same basic message: Maintain a
whole-picture perspective. Focus on the entire market and the sector, not
just the individual stock. Be attentive to qualitative factors, not just the
available quantitative information. Develop a trading plan that encompasses
all the aspects of trading, not just the entry strategy.
Price: 5 USD
All books are in English, presented in format of doc or pdf, printable.
|
