When a stock hits resistance, take profit; breaks support, cut loss. With this in mind, we can find out our Risk-Reward Ratio. Eg if I buy a stock at 1.00 and its support (my cutloss point) is at 0.95. This means when I sell to cutloss, I lose 0.05. If the stock's resistance is at 1.10 (point to take profit), I potentially gain 0.10. So 0.05 potential loss and 0.10 potential gain. Every 5 ringgit I risk, I potentially gain 10 ringgit. Is this stock worth buying? Is the 1:2 risk and reward acceptable? hmm.. maybe the risk is still too high for a newbie like me...
Two days ago (11/4/16), I bought a small amount of genm @ 4.50 as I thought it hit support. Yes, it rebounded from support yesterday and hit resistance @ 4.60 and it came back down today. I was pretty happy with myself and was waiting for it to break out of 4.60. Now I realised I DID NOT make a good decision as the support level is @ 4.40 and resistance is @ 4.60. So my risk-reward ratio is 1:1!! For every ringgit I risk, I potentially gain 1 ringgit! What?! I should have bought when it breaks out of 4.6 or even 4.7 to be on the safe side. Now I can only hope for it to break out or I will have to cut loss @ 4.40..
When a stock breaks out, it is a good buying opportunity as there is no resistance above - sky is the limit! But of course, I need to be able to recognise the peak and the change in momentum i.e. how far can it go and when will the stock turn around and goes down again.
Wednesday, April 13, 2016
Monday, April 4, 2016
GHLSYS
GHLSYS is a company which provides integrated end-to-end payment solutions encompassing physical
and virtual payments on sale and rental basis, including Electronic Data
Capture (EDC) terminals compliant to the Europay-Mastercard-Visa (EMV)
platform, contactless readers, network access routers, and online
payment gateways (Source: http://www.ghl.com/overview/). GHLSYS, a leading payment solutions provider has recently appeared on the news.
From what I understand, GHLSYS's profit mainly comes from its transaction payment acquisition (TPA) division, which comprises two components — providing telecommunications companies (telcos) with prepaid top-up facility and bill collection services through electronic payment.
GHL's coming revenue is promising as out of 40 million telco subscribers, 80% are prepaid top-up users out of which almost two-thirds are still using scratch cards for mobile top-ups. WOW! I am convinced! 80% of 40 millions is 32 millions and 60% of that is close to 20 millions! I believe, if given time, e-pay will replace the traditional way of paying using cash.
I bought at 0.85 support last year and did not cutloss when it broke - I was less worried about this counter as it is a net cash company. After waiting for several months, finally I got my 10% paper gain. Still holding - immediate resistance is at 0.945 or 0.95, next 200MA at 0.985 at which I may sell to take profit as I am not convinced with this current hot market.
From what I understand, GHLSYS's profit mainly comes from its transaction payment acquisition (TPA) division, which comprises two components — providing telecommunications companies (telcos) with prepaid top-up facility and bill collection services through electronic payment.
GHL's coming revenue is promising as out of 40 million telco subscribers, 80% are prepaid top-up users out of which almost two-thirds are still using scratch cards for mobile top-ups. WOW! I am convinced! 80% of 40 millions is 32 millions and 60% of that is close to 20 millions! I believe, if given time, e-pay will replace the traditional way of paying using cash.
I bought at 0.85 support last year and did not cutloss when it broke - I was less worried about this counter as it is a net cash company. After waiting for several months, finally I got my 10% paper gain. Still holding - immediate resistance is at 0.945 or 0.95, next 200MA at 0.985 at which I may sell to take profit as I am not convinced with this current hot market.
Subscribe to:
Comments (Atom)