So right now I have 50 shares with Intel. They've been declining now constantly since mid August. Today the shares dropped $1 down to about $16.30.
So my question. Intel and AMD don't have any other significant competitors? I'm betting that investing now is smart as the stocks should eventually make their way back up. I can't imagine Intel stocks going way low as they're a pretty strong company. What do you think? They're at their lowest point in a really long time...
I think that mentality is exactly what's going to lose you money.
People, generally speaking, will buy when a stock is gone up (when it's priced high) expecting it to do well, and sell when it's gone down (when it's priced low), and wonder why they lose money. Only about 5% of people who trade are really making money.
See, when you look at stock charts, what you are looking at is not what they're
doing. What you're looking at is what the stocks have
done.
The trick to making money isn't necessarily knowing when the stock will move or in what direction.
You can perhaps be right more often than not if you have the right tools, but you will lose trades.
If you want to make money, you need strategies to make sure you don't lose much money when you do lose, and to try and maximise profits when you do win.
I think it's much easier to do that with options than with shares though. Or sometimes with a combination of shares and options (such as the collar strategy)
The best traders will plan their exits before they even enter a trade, so they know how much they can make or lose.
Then, they'll only enter the trade if their potential profits is significantly larger than their potential loss.
People who do that can make money even if they are wrong about the direction more than they are right about it.
The better ones will be right more often than not, but everybody loses trades sometimes. Every trade has the potential to lose you money, even if you think the stock is doing well (or badly, if you are making a bearish trade)
You just need to try and minimise your losses.