Engrave the stop loss into your DNA
When it comes to stopping loss, I think it's more important than taking profit. If you don't take profit, the worst thing is the restoration of the profit account.![]()
However, not stopping the loss is equivalent to cutting the meat with a blunt knife, sooner or later will bleed down.
Almost all losses are related to two points: "not seeing the trend, not holding the position." I think traders should write down the losses, analyze where they went wrong, and categorize them, then never go to that place.
1. for companies that understand the fundamentals
My stop-loss strategy for holding positions is based on the fundamentals of the company. As for marvelous company, we don't need to stop loss due to familiar enough. For company which has a certain degree of understanding and more floating profits, we can moderately relax the stop-loss points, such as the 120 moving average; if it's not ripe enough, the 20-day moving average may trigger the stop-loss. $Tesla(TSLA.US$
2. The operation of short-term betting
For an unfamiliar company, the stock price will rise as soon as I sell it. Gambling operation is not supported by long-term logic, so stopping loss can avoid making big mistakes. But it also depends on execution, sometimes I will get trapped. ![]()
Anyway, it matters with my ability circle. Many newbies look back and think they could have made a profit if not stop-loss, but such hindsight mentality is not allowed in the stock market.
3. Buy bottom with Long Call
In a slumping market, if you feel the bottom with no scientific basis for judgment, you'd better not to buy the bottom directly. Figure out how much you want to buy and use long Call to get the bottom at that time.
Usually option is the price of 1/10 of the underlying stock. Buying it properly, you can make a profit equivalent to a certain percentage of the underlying stock. Otherwise, it at most let the option float (maybe 10% loss). $Nasdaq Composite Index(.IXIC.US$
Therefore, you must make a quota that you can afford at first, the expiration date depends on your confidence. If you lack confidence, set the expiry date longer.![]()
4. Why should funds need to be fixed invest?
Human greed, not only lies in the high more than win, but also lies in the low dare not to buy, always waiting for the lower position.
To sum up, I'm not afraid of losing a good stock and generally don't chase high. I will not touch an unsure stock. If I encounter a judgment error, I will stop the loss unconditionally. $Camber Energy(CEI.US$
@HopeAlways @ATS A trade sniper
@HopeAlways @ATS A trade sniper
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NANA123OP : Your like and follow are all my motivation to share
aoimizu : Great write-up, thanks a lot for sharing! I def agree with you on #2 as I've encountered this before (I'm sure most have!) The most important would be be not be greedy. Make money, move on, even if it continues to rise. Better than being caught in a downturn, from profiting to losing, right? I've been caught before too and it's not pleasant at all