Stop loss / profit target
Good paradox here.
Depends on which school of thoughts you choose. Allow me to develop further about this.
Say the patterns chart technicians worship,
Depends on which school of thoughts you choose. Allow me to develop further about this.
Say the patterns chart technicians worship,
How are we sure that these publicly known charts aren't subjected to exploitation by whales or the smart money? Although the chart pattern were proven to be correct at times but the key question here is if it is 100% of the time and what are the odds of a perfect chart pattern. It might seem like this has nothing to do with the topic on hand but if you spare some time to think about this, doesn't this serve as a precursor to the question on hand: where do we place stop loss or take profits. I don't think anyone can advise with a strict guarantee that the pattern would be completed, the game here is about probabilities 🎲 .
Next up, the market is driven by demand and supply. The stronger force wins. A stop loss would be easily triggered for a more volatile stock which often subject investor to lose out on all the erratic gains the were to come next. Say $Tesla(TSLA.US$
Next up, the market is driven by demand and supply. The stronger force wins. A stop loss would be easily triggered for a more volatile stock which often subject investor to lose out on all the erratic gains the were to come next. Say $Tesla(TSLA.US$
A trailing stop-loss order could be placed that would definitely be triggered when the stock went down since mid Feb 2021 only to see that the stock reverses its course nearing the ATH now. One might say we can always buy back, but the meaning to having a stop-loss is to avoid the falling knife and prevent a larger loss in our position by taking a small loss hence it would not be sensible to take another position below the stop loss. But this would only mean a stop loss for whoever that submitted the stop loss order ![]()
Conversely, a profit taker would have not triggered any order and held that position to see the stock return to near ATH (which could also mean a larger loss should the stock continue the downtrend) ![]()
So what does this imply? Could it be the act of the stronger force to shake out "paper hands" if they obey to the stop loss rule?![]()
So what does this imply? Could it be the act of the stronger force to shake out "paper hands" if they obey to the stop loss rule?
I surely love my profits though ![]()
Feel free to cast your vote below!
Feel free to cast your vote below!
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