Most people, especially the naïve, like to buy all the way down. This is because of The Anti-Change Concept. When a stock moves from $1 to $1.50, the stock is deemed too high to buy. It then moves to $3.00, and then back to $1.50. Now at $1.50 it is considered too low to ignore. This is called The Anti-Change Concept.
Professionals like to buy all the way up. They look for the most odds. Amateurs like to buy on the way down. They have no stock market knowledge and wisdom. They lack experience and connections. Worst of all, they have no fear. Is there any wonder then, that they should expect to lose?
Success in whatever field needs your labor. A soccer team needs ball-handling skill, speed, stamina, tactics and a good coach. In the stock market you need knowledge, wisdom, discipline, patience, experience and courage.
So if you are about to go into the stock market without the above traits, better make your bets small; the smaller, the better.
If you want to lose money, here are some ways:
Believe everything you hear, especially tips.
Buy in a downtrend.
Take small profits.
Holding on to a falling stock just to get out even.
Average down and keep on averaging down.
Buy ‘rubbish’ shares at very high PE.
Go for the price rather than the value.
Buy when the market is most optimistic.
Buy when volume is at unprecedented height.
Bet on every race.
Be the last to buy and the last to sell.
Good luck guys and happy investing!