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Set Your Goal, Let it Roll!
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joined discussion01/06/2022 19:19

Using stocks for gains, even when they're going down

Goal is to have gains in stocks, even if they are going down.

How is this achievable? Very low loss tolerance and immediately reinvesting when the stock is trending upwards, repeat.

Example- consider SPY is going down .5%, so scary I know. Now I'm imagine you had stock already in this while this was happening, even scarier. To you, you may not know whether it will continue upward or downward so, rather than holding you choose to sell, as it looks immediately ready to drop. So you sell and the stock drops 2%. Well, now is a perfect time to reinvest, doing so insures instant 2% gains for long term, if the stock has a tendency to go up higher every year.

Above is definitely doable but for an unrealistic yet impressive version, look at any stock chart and consider how it looks without any losses. Of course, some look better than others in this aspect but with enough practice this can be somewhat attainable, just not perfectly otherwise everyone would be rich.

For the realistic version, have your risk tolerance amount ready (in this case .5%). Any drop below that threshold, erase it and replace it with the next small gain. If it's not to your liking, adjust your percentage a little bit until it's something you like. Draw or imagine the chart this way and this is the highest possible goal you can have with this concept.

This can also be used as curb against greed in stocks. If you reset your loss tolerance level to the top of every gain, you can still get some good profits rolling in without having to think to much about whether to buy, sell, or hold.
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