How to Make Money in Stocks Part 4

I INSTITUTIONAL SPONSORSHIP. A little Goes A Long Way

A stock certainly does not need a large number of institutional owners, but it should have at least a few such sponsors. Three to ten might be a minimum or reasonable number of mutual fund sponsors, although some stocks might have a good deal more.

If stocks has no professional sponsorship, chances that its performance will be more slow. If there is no sponsorship and you try to sell your stock, who will buy it. I told you Choose a stock that has big volume of buying and selling. The other said it’s the Favorite Stock, at least it has volume Of 50 billion Rupiah! buy stocks that have at least a few institutional sponsors with better-than-average recent performance records.

M MARKET DIRECTION. How to Determine it

The Last and The most important, if you choose wrong market direction your stock will slump, although you already use the other method. The best way to determine the direction of market is to follow and understand every day what general market are doing!

The way to determine it :

1.Look for the heavy volume, if the volume higher than the preceding day and IHSG (Indonesia Stock Exchange) composite index show stalling action, or less upward movement than the prior few days, that indicate MARKET TOP.

2.Look all major Stock Exchange In the WORLD. As I say its Dow Industrial Index and Hang Seng index very influential with IHSG (Indonesia Stock Exchange) index. For example look the percentage of upward for the day. If IHSG upward 10% and DOW Jones only 2%, IHSG was not strong enough!!

3. Rate Changes. In US follow Federal Reserve Board (FED) Rate, but in Indonesia follow Bank Indonesia (BI) Rate. In the past, it frequently marked the beginning of bear markets and impending recessions when the discount rate was increased three times in succession, and it usually signaled the end of a bear market when the discount rate was finally lowered.

4.During BEAR MARKET, stocks open strong in the morning and close weak by the end of trading time. During BULL MARKET, stocks tend to open down and come back later in the day to close up strong.

5.Follow THE STOCKS LEADER!!

6.Look and study what happen in the world RIGHT NOW.

7.Play safe if you do not know to CHOOSE a stock. Choose The Defensive stock sector as utilities, tobaccos, foods, and soaps!