Wednesday, 12 March 2008

Never catch a falling knife...China Energy

When i first started out trading the stock market, i always look for stocks that has corrected severely. I thought i am getting 'value for money'. But somehow after buying the stock, the stock price continue to drop and the company because more and more "valuable" until my short term investment became a long term one. After paying lots of school fees and reading tons of books on trading, I avoid such stocks altogether. That is the reason why i share with you one important lesson, the trend is your friend.

China Energy is one such stock which i will avoid buying unless i am shorting it. I have no idea why the stock price is so weak but my advice to you will be not to catch a falling knife until you see potential signs of reversal...(and you die die have to buy this stock).

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