I remember holding a losing position once, a long time ago. I recall getting my first and only margin call and losing about 2/3 of my capital. I view the experience as part of my education: "don't hold on to a bad deal."
I am currently down 0.82% in BBY, and down 0.14% in HMC. Should I be looking to cut my losses here and sell, or let the trades play themselves out? I guess what I am asking is, would you be a buyer here, sell short, or not bother at all? Since I plan to post the exits, I am curious on opinions.
If you are looking for a swing trade then Honda is very overextended right now. I would stay long on it. BBY, not so much. The important thing is to know why you entered in the first place and honor your stops.
I wonder what the real percentage of stock traders use stops/limits. Just day traders? Or do long term traders use them as well?
Between the two, I would put my money on Honda also, but as it is, my strat put it on both. Right now Honda is ahead by 1%. My "stop" is to use small position sizing, and have a hard exit rule in place when in occurs.
I would like to know that as well. I swing trade mostly and I also do some longer term trend following. I do not use hard stops at all. I know when I have had too much pain in a failed trade and I exit with a market order. Most of the time when I exit a losing position the market will turn as soon as I get out so I try to not exit unless I really have a reason.
No, my auto trading system sold HMC for small profit Monday and small loss on BBY today. Neither trade was remarkable. My HIT entry from yesterday did much better today.
The two questions to ask yourself: 1. What is my maximum drawdown amount I am willing to accept? 2. What is my timeframe to "let the trades play themselves out?" You are holding stock in billion dollar companies. BBY pays a 1.90% yield and tends to rally during the holiday shopping season. HMC fell due to the unfortunate situation in Japan. Some analyst just gave BBY a "sell" rating and a "downgrade", yet another analyst may just as well come along and give either one an "upgrade" at anytime, and they could rebound. Hope that helps...
Thanks ScalperJoe, Yes, stocks go up and down for many reasons, this is true. My time frame is < 3 days.