Introduction

“Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1”

The quote above is one of the main investing principles of Warren Buffett, the world’s greatest stock investor. He opines that the key to succeed in long-term investment is to protect our capital. The daily ups and downs of the market can be worrying many investors especially when we do not know how to exit our position when the market crashes occur.

According to our last blog post - Introduction to MQ Trader Trading Strategies, we believe that you have learned how to earn profits from stock market by using the trading signals. In this topic, we will be focusing on how to protect our capitals by using various trading strategies (EMA 5 Crossover, MACD and RSI, ADX Crossover, Guppy MMA) in MQ Trader Stock Analysis System. VS is used for demonstration purpose to explain how we protect our capitals by using *MQ Trader trading strategy*.

Company Background

V S Industry Bhd is an integrated Electronics Manufacturing Services (EMS) provider which is engaged in manufacturing, assembling and sale of electronic and electrical products and plastic molded components and parts.

MQ Trader’s Sell criteria

There are 4 criteria set by MQ Trader in order to determine how and when to sell the stocks:

1. Down-trending stocks
2. Fundamental rating ≤ 2.5/5.0
3. Technical rating ≤ 3.0/5.0
4. Negative news or announcements

For those stocks which meet any of the criteria above, we will start looking for sell signals to save our capitals.

Trend of VS

Starting from mid of February 2018, its share price has been experiencing bearish trend. This is mainly caused by the withdrawal for the application of bonus shares which should be approved on 27 February 2018. There is a sharp drop in its share price observed in the end of March 2018 due to its lackluster financial results of 1Q18.

Source: MQ Trader Stock Analysis System

MQ Fundamental Rating of VS

Source: MQ Trader Stock Analysis System

A good fundamental company is worth for long-term investment, so it is very important to study the financial background of a company before we decide to hold any stock. Based on MQ Fundamental Analysis, VS is a fundamentally good company, as it passes 6 out of 8 fundamental indicators. However, the profits earned in 1Q18 are relatively low as compared to the profits earned from all of the 4 quarters in year 2017. Therefore, we should pay attention to the financial results of the next quarter to determine whether this stock is still suitable for long-term investment.

How to use MQ Trader Trading Strategies to protect our capital?

*MQ Trader Trading Strategy* is one of the highlighted features of MQ Trader Stock Analysis System assisting traders to locate trading signals by using various technical indicators. It can help to determine the right time to enter our position for earning profits from bullish market but it also can assist on avoiding traders to be trapped in the stocks that are in bearish trend.

We would like to emphasize that the highlight of this blog post is to protect our portfolio overall but not an individual stock. We will be explaining it in more details in MQ Trader – Portfolio Protection Strategy (Part 2).

Community Feedback

We encourage traders to try out and evaluate the MQ Trader system and provide us feedback on the features you like to see in the system. We have received many positive feedbacks so far, and we are currently compiling and reviewing them for possible inclusion into the next release of the system.

We would like to develop this system based on community feedback to cater for community needs. Thanks to all those who have provided valuable feedback to us. Keep those feedbacks coming in!

Disclaimer

This article does not represent a BUY or SELL recommendation on the stock covered. Traders and Investors are encouraged to do their own analysis on stocks instead of blindly following any Trading calls raised by various parties in the Internet. We may or may not hold position in the stock covered, or initiate new position in the stock within the next 7 days.

Join us now!

MQ Trader stock analysis system uses Artificial Intelligence (AI), various technical indicators and quantitative data to generate accurate trading signals without the interference of human's emotions and bias against any particular stock. It comprises trading strategies which are very popular among fund managers for analysing stocks. 

MQ Trader stock analysis system is SPONSORED for MQ Trader members. To use this amazing tool, you can sign up via MQ Trader Sign Up!

Contact us

Please do not hesitate to contact us if you have any enquiry: