A dummy's investment experience

A dummy's trading experience Part-3: Cut loss

Dummy Blackie
Publish date: Wed, 16 Sep 2015, 11:36 AM
Note down every mistakes, so you can minimise the risk in future.
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Never stop learning

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Frankly, no one hope to loss their investment... aww, who don't want to earn more? Somehow, trading in stock exchange does not guarantee profits but in fact, you may loss more than earn sometimes. The market can be so cruel and they don't care who you are or how new you are... haha... all about they care is of course $$$(Money). We may get ourself hit until bleed if we didn't learn some tactics to protect ourself. One of the tricks is to not to loss more than your preferred loss comfort level and doing so we can still protect our capital. Think those pro named it "Cut loss" but I called it "stop bleed and come back later" hahaha... Tell you, this is not funny but this is really helpful. Me experienced numerous times of cut loss and then able to join back at lower price to enjoy the rebound(sometimes bro, i meant sometimes)! By the way, my cut loss point was around 15% initially(I was a long term investor) and slowly became 10% then now preferred at 8-10%. I know is crucial for some people watching your portfolio valued lesser and lesser but, if you still locking your capital in and kept yourself watching only will only make yourself feel more painful. Of course, most of you've developed your own preferred way to trade and I'm not saying you are wrong but don't you think locking it until it to rebound may takes months or even years. Imagine, during the locking period, you may lose a lot of opportunities to buy some other potential stocks. For your info, I've just cut another loss for SBC at around 0.90(purchased at 1.0) and lowest it hit 0.64(hell, that's around 26% dropped but I managed to stop the bleed earlier and lucky to collect some other good counter that rebound after that). Well, I guess am just lucky again...

 

After so many times of stop bleed(cut loss) I do realised that I can buy any counter because I have cash in the weak/bad market! So I come out with a conclusion that, wise people are waiting the market to collapse and they can get to buy more superstar cheaper with the cash on hand. So if your capital is not liquid enough then you may just only watching the rich become richer while holding a bucket of blood(Sorry, I've no mean). Well... Try to develop your own tactic to practice it and also be disciplined for it to protect your hard earn money!

 

Hope you enjoy reading, good luck and to be continued...

Still learning and always will be :)

 

Discussions
3 people like this. Showing 2 of 2 comments

JT Yeo

You need to ask, if everyone cut loss just like you, who is the loser?

2015-09-17 08:52

Dummy Blackie

JT Yeo, I am... it's cut loss... :)

2015-09-17 09:45

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