Discussion in 'Risk Management' started by turkeyneck, Oct 24, 2008.
You tell them to "average up" or "cut loss" and they think you are a loonie. Any idea?
honestly this is a hard one for me even though im pretty new myself
ive never had this problem, but if i were to guess i think it's some form of denial?
they cant deal with being wrong.. they think trading has something to do with being right? so when they get hit with the reality they create some sort of illusion that its going to come back up? so they stupidly keep buying into their loss.
i stopped creating illusions in order to deal with reality a long time ago, perhaps that's why i dont average down
oh btw, do you have a turkey neck? or are you just very fond of them? or maybe its slang for something else? just curious..
Perhaps "Old Turkey" from Reminiscences of a Stock Operator?
Instant gratification and "it won't happen to me".
Both the biggest wins and biggest losses in my career came from averaging down...
you just need to have a plan...
Averaging down killed more Jews than Hitler.
What would Joe the plumber do?
This is only a flawed strategy if your 1st position is your max lot size, which I'm sure it is for the average Joe.
He would almost definitely average down, and hang in there for the "long term". Then he'd give up and sell at the bottom, just before the big rally. Then he'd say "I'm done with trading - it's just a big scam" and stick to plumbing.
Separate names with a comma.