Don’t

1. Panic
   Panic situation happen when the market goes against you and you may lost your rational judgement.
2. Make huge investment when the market dips.
   You may suffer a bigger lost by making a huge investment while the market in downtrend because even the price is at support level, the market may drop further. So make sure that most of indicators shows a buy signal before enter in the market.
3. Chase performance
   Chasing performance is very risky. You may not aware of when the price will drop and this type of share price may drop within seconds.
4. Follow tips
   The expert told us not to follow tips even given by your best friend because before they tell you they might bought it at lower price. When you decide to enter, the price may be already at higher price and can drop at anytime.
5. Buy because big drop
   Never buy a stock that the price suddenly drop. Something may happen within the company and you don’t know about it.
6. Hope your loser will be a winner soon
   You should hope your winner will be better and fear you will loss more.
7. Emotional (greed or fear)
   Two biggest emotions in trading: greed and fear. Do not let greed and fear influence your trade. Set a target for your profit margin. Margin of 20% is very high and at this time you may start think of selling this stock.
8. Buy because you have extra fund
   Never purchase a share more than your fund. All the costs incurred must be taking into consideration.
9. Buy if not sure/doubt.
   If you’re not sure about the stock price movement, better stay at sideline and waiting for buying signal.

Do

1. Sell the lousy one
   Do not fall in love with your stock. Sell it if the stock not perform well and start looking for others.
2. Diversify your investment
   Buy different stock from different sector. Investment professionals all agree that the best strategy for reducing risk and increasing potential return is to diversify your investments. In other words, don’t put all your eggs in one basket.
3. Strategy/Plan
   Before buy a stock answer why you enter, where is your stop lost point, set the profit level, know your risk and enough fund to purchase. The stop lost point is around 5% – 8% of the purchased price. If the stock goes up, your stop lost point should be based on the highest price. This can minimise your risk and maximise your profit.
4. Stick to your strategy
5. Keep a profit one and sell the loser
6. Always read the daily news and company announcement
7. Buy on bullish and sell on bearish

Day trading is a process of buying and selling stocks throughout the day. In a day the stock price may be shooting up or falling down within minutes or even seconds. The day trader hope they can make a quick profit by buying stocks at the lower price and sell back at the profitable price in a short time on contra basis.

This technique is very risky and require fulltime trader to monitor their share price movement continuously. The trader must have a trading tools to check the price movement in real-time and to process their order. Day trading may suffer financial lost if their lucky pick goes against them. The speculation counter that actively traded may be their choice.

Contra transaction is a procedure of buying and selling stocks before the payment date. The broker pays trader on contra profit and seller pays the broker on contra loss.

T+3 Situations:

T day = Trading day

Example:

T = Friday
T1 = Monday
T2 = Tuesday
T3 = Wednesday

Contra transaction can be done before T3, 12.30pm. Broker will force sell the outstanding share if the trader failed to make a payment and sell their share within this period.

* Market day is day that exchange open for trading. If on Tuesday is a public holiday and exchange close, T3 will be Thursday.

Definition The first sale of stock by a private company to the public. IPOs are often issued by smaller, younger companies seeking capital to expand, but can also be done by large privately-owned companies looking to become publicly traded.

In an IPO, the issuer obtains the assistance of an underwriting firm, which helps it determine what type of security to issue (common or preferred), best offering price and time to bring it to market.

Also referred to as a “public offering”.

Source: Investopedia

Apply IPO

1. Check the newspaper for prospectus
2. Read and understand the prospectus
3. Get the application form from stock broking company and post to the issuing house together with personal details and the payment
   or apply through Electronic Share Application (ESA) facility.

Before you decide to buy a stock make sure that you know how much you need to pay for it. The following charges are the cost to you when buying a stock in Bursa Malaysia.

1. Brokerage Charge
The brokerage charge could be up to 0.7% of the contract value but depends on broking company. Normally broker will offer lower brokerage charge for online trading account.

2. Clearing Fee
Clearing fee fixed at 0.04% of the contract value and with maximum of RM500.00 per contract.

3. Stamp Duty
RM1.00 for every RM1000.00 or fractional part of the stock value with maximum of RM200.00 per contract.

4. Stock price
The current market value.

Example:

See Stock Calculator section for the calculator.