Throw stocks in closet or pull out?
Okay so im pretty new at trading stocks i've done a few trades and traded some options around. So i need advice because i dont know what to do...
I bought PBR @ $28. now it's at $19. It's been trending down hardcore and even though it's been going down i've been just holding on. I was thinking of keeping the stock and just forgetting about it until it goes back up. It is a very large company and I'm sure that it will go back up. And I was maybe thinking about putting even more money into the stock and value investing in it at $19. PBR's earnings report comes out next month i believe. What would you guys do? We all have our different styles of trading. i did learn from this experience that if my position moves away from me then I'll get out. So my new rule is that if the stock goes down for 4 days straight- Get out.
4 days and then you're out? That's terrible risk mgmt. You'd loose alot of money on AAPL if you applied that rule.
In your words you have to options: 1) Go all Jim Rogers on it and double your position to get a better average price. 2) Throw it in the closet and pray to the man upstairs that it will go up.
If you choose #1 and it goes down even further, will you buy more?
If you choose #2 and it never gets above 21 again during the next 2 years. What now?
Run your wins and cut your losses. You are doing exactly the opposite which is normal for people who are starting. Psychologically is what we all tend to do. And it's wrong.
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lol it feels like its already gone down too far to cut my losses now, I'm feeling the urge to double my position in it. I would be very suprised if it did not go back up. Ironically I believe that cutting your losses are the most important things in investing. Im going to try #1 and see how that goes for me
Assuming you're not a troll, there's your problem. It's why you didn't cut your losses in the first place. You keep convincing yourself that it will bounce back. You say you know cutting your losses is important but you're not actually doing it. Even if you come back from this one, you won't last very long like that.
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