The Stock Market Games

For the majority of traders out there who do facebook analysis (FA) or tsismis analysis (TA), don't you notice that most of the time the recommendations are always of entry points? Where to buy, what price to bodega, buy below this price, etc. So specific so detailed. 

But what about the exit or target price? This is where it gets a bit murky. Usually it's in a vague out of this world target of anywhere from 50-1000% percent increase. Such juicy and jaw dropping figures. Now, who in their right mind would want to miss out on the opportunity of a lifetime? 

I'm a cash cow. Moo

No one right? Why give up your measly 3-5% profit for the promise of the ceiling or baggers? If it's on facebook or a hot tip from everybody's lovable idyut or playbook master then it must be good. Well earthlings, sorry to burst your bubble but you've just been played. Welcome to the wonderful game known as the stock market. 

My system has done countless comparisons to numerous other earth systems, from carnival rides to sports, and it has come up with one game show that seems to resemble the stock trading experience the most. The name itself is a good indicator of what everyone wishes their experience or goal is. It's none other than the game show: 

Everyone's goal

Fitting isn't it? Everybody is in the stock market to earn and try to look for a way to get out of the rat race. To live a better life free from the daily grind, the endless traffic, to have more time to spend with their family or for those working abroad, to be able to come home and BE with their loved ones. Such simple human goals but oh so difficult to achieve. Being able to buy and strike gold in a basura stock is the ultimate goal. But usually this is not the case. Similar to the game show, not everyone can do it. This is where having a sound exit strategy comes in. Let's break it down some more. 

1) The money tree represents the possible profit that anyone can earn from a certain stock. So tempting. All the stock has to do is to go up. Simple right? Enter the next part of the game. 

2) Of course, as in everything in life, nothing is ever simple. To reach each new level of profits, there would be questions to be asked. Questions that get harder the nearer it gets to the top. In the stock market, these questions are known as the resistances. These are the lines that a stock has to break in order for it to be a bagger or more. 

Sample of a chart with resistances

Knowing how to plot these resistances is vital since it will give you a heads up for the next part of the game. 

3) In the game show, the host sometimes asks the contestant if they are happy with their current winnings and they can walk away with what they have or if they want to continue answering the next question with a wrong answer leading to the contestant losing it all or just taking home a reduced amount. This concept in stocks is where traders either take profits or cut losses. 

For some traders, the tsupiteros, they will disregard the ultimate target price and just look at the resistances and set their selling there, happy in the thought that they were able to earn X% for that trade. 

Others will look at the target price and be blinded by it. Even if common sense tells them that the resistances might be too strong, they will hold on with all hope that it will be reached. And this is where most people fail. In the same way that not everyone in the game show can win, the same concepts can be applied. Managing your greed and knowing your limits or a stock's limits can be the difference of your trade from winning or losing. 

Now, one of the key differences between the aforementioned earth game show and the stock market is the fact that on the game show, you are only playing in a vacuum. It is just you and the host. But in the stock market, there are thousands of others who are playing the same game as you. All thinking how to earn and where to sell. Remember, in a game, there will always be winners and losers. Plan your trades. Set your exits. 

May the best man or robot win.