Cut and run or double down?

what asset class? If they decay or expire maybe get out. If it is a stock market index of a first world country and you're holding for years maybe double up

 

I do pyramid my long-term longs on US indices when all are bullish. I also pyramid long-term trades on forex pairs when their trends are consistent and other pairs with the same currencies provide supporting chart set-ups.

 

I find it effective to cut losses asap and look for a better entry.
The cost of wasting emotion/time/money on a losing position can take a heavy toll.

 

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Another fun thing about doing that, takes while to blow up usually, so never a dull moment

 

Do you add to winners and let your winners run ?

 

I used to sell my losers, just like what the so called experts say to do, but then I had a stock I'd paid $7.50 per for in 2007.

2008 came around and for the next 13 to 14 years it just declined or did nothing. Management just plain sucked. From time to time I would load up on put options to keep the $'s rolling in, and scale / average in to bring the cost down.

In late 2021 I was ready to eat it for tax reasons, but another trader pointed out the new CEO was a top notch guy, not like the last joke. So I rode it down to .25 and all the while the media was screaming bankruptcy.

As it started to ascended from it's all time low, I kept scaling in at around .50 per to eventually bring my cost down to $2 per. Today it trades at around $1.75 per, and I own tens of thousands of shares. I do not have any put protection (I use Barrick Gold as my hedge against a black swan event) on it, but have recently added $3 Jan 23 calls @.19.

I won't give the company name until it jumps back over $5 per because this site doesn't want penny stocks discussed. But anecdotally, here's a reason not to dump your losers. If you see some light at the end of the tunnel, think twice before you hit the bid or figure out a way to make money on the way down.

Cheers

 

Bear market playbook. Early morning rallies turn into blood bath sell-offs near the close.

 

You are so right!!! Thats where investors including good traders get killed.
Another one is when the futures are up huge and the market sucks you in only to sell off hard.

 

So you now have thousands of shares that you paid $2.00 for that are trading at $1.75 and your money has been tied up for 15 years. What is your point?

 

#1 rule that has saved me the most $ and head-aches, is (when in doubt, do nothing).

That said, for those wanting to cut & run, I can't blame you. But remember, there is a legit possibility Fed may be forced to follow Europe into negative interest rates.

Then you miss out on a 4x rally bull-run again.

Damned if you do, damned if you don't. Haw! Regardless which way it goes, good luck everyone