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how do you cope with your losses

hi CWQuah

couldnt agree with you more... 

 

Put is very simply. The objective is to win the war in the shortest time with minimal casualities.

 

themasick & GsICk

 

Who are Mr T and Mr G?

 

Mr T  & Mr G have. LOL!

 

Yes. Always call a spade a spade in stocks. Set a hard stop. ALWAYS.


Some will argue, yes, if I hold a lossmaking stock for next 20 yrs, odds are the paper loss may breakeven.

BUT, they toy with the assumption that the company survives long enough to do that. Not all companies can. Ask the Japanese stock investors from the 1980s era.


And frankly, how many ppl have multiple 20-yr timeframes to play with? Losses can be recovered over time, yes, but I sure feel waiting till 80yrs old to be painful!

 

Is paper loss considered loss?

 

Regardless of up/downtrend, the only permanent truth about the market is its continuous variability. Accept that as part of your acknowledged risk, then it's easier to cope with the possible emotional disturbances.

 

Yes.....Let's share more investment knowledge with one another and all can reach our investment objectives together! 

 

hi jeremy

i like it....noboby or methods are more superior than others..just whether is it working and suitable for indiviudal for our own investment objectives. We are all intesrered in trading and investment and i believe we do so here hoping to make more retirement funds, passive income..so let keep on sharing and learn from each other. Let us all HUAT together.

 

The problem is, when people see the market rise, they will jump in too... 

 

Time to short and time to long are over already....don't do anything,equally risky-

 

Good discussions.....so many inputs for everyone to learn together.....I like the friendly exchanges so far.....Keep discussing on various stock investing approaches.....Everyone will become more knowledgeable once we start sharing our best investing approaches.....There is not one perfect approach........and not every approach is suitable for everyone.......at least through discussions, it is an eye-opener to the various good investing approaches that different individuals have adopted so far......

 

It is equally risky when you have no cut loss strategy whether you are in long or short position, as long as you are in the trading business. I knew of people who were holding stocks lost ten of thousands to 1 million in last year bear run...Poeple who thought OSIM will sky rocket... 12 years gain gone in less than 2 years...

 

Going short appears risky because if one does not have a stop loss in place, the potential loss can be UNLIMITED.

Going long appears less risky because the most one can lose is when the stock price becomes ZERO, even though if no stop loss is in place.

 

Firstly making money in the market is about riding on a major trend. Why are people buying stocks as the market drops? It is because they wish to ride on the next bull trend. So if you don't wish to trade during a bull run, just close your eyes and open them a few years  to see the value of the stock.

So what is the general trend now? It is a downtrend. Similarly those who shorted in 2007 Oct and don't wish to trade, just leave your short positions open for 2 years. The monthly charge is negligible compared to your gains. Most don't realise that in a bull market, the interest incurred for margin is so negligible. Your 1st, 2nd and 3rd year interest are all paid off within a few weeks in  bull run. So in margin, it is ok to just leave your stock in margin position for long term. Work it out with your calculator.    

I believe it is mindset thing. People are sold on the idea that borrowing is dangerous so they think margin is a no no. I have mentioned in previous posts long time back, the strategy is leverge only when you have paper profit and in a bull market .  In margin or CFD, you don't need to leverage if you don't wish to 

You mentioned people doing short need to cut loss. The same applies to people on long position.

Yes, not everything will be suitable for everybody just like not everybody is the same. It can't be. That is why there are winners and losers.  

 

jeremyow      ( Date: 04-Mar-2009 12:57) Posted: Shorting by CFD is not as easy as it seems.....Firstly, one needs to have a disciplined trading mindset which cannot be accomplished by many....One needs to be emotionless when doing shorts and needs to know when to stop shorting and get the profits out or cut loss when needed......all these easily said than excecuted....The human mind is full of greed and fear, and it is not easy to be emotionless and objective.... Secondly, one needs a successful reliable trading system (which even the best trading system can only guarantee at most 70% to 80% success) that can guide one to know when to enter a short position and when to exit (cover back).....Also, one needs to calculate how much is ideal for cutting loss based on one's invested amount so that one does not cut loss too early or too late.....There is also the continual monthly fee charges for CFD to consider so that one needs to decide how long should one keep shorting to remain profitable at the end of the short.... My point is that shorting by CFD is not that easy as one will think it to be....otherwise, why will many private instituitions conduct paid courses just to teach how to short by CFD successfully through their own propriety trading systems....? Livermore      ( Date: 04-Mar-2009 12:28) Posted: You can average down and short at the same time. Your short acts as a hedge. What is hard to understand about CFD

 

mayb.

Livermore      ( Date: 03-Mar-2009 18:31) Posted: Don't think you can get SPC at $1.70. lookcc      ( Date: 03-Mar-2009 18:06) Posted: near bottom then sembmar 1.00, kepcorp 3.35 n spc 1.70 so dun think sti near bottom....tis is not a sell or buy call, just opinion.

 

Thanks Livermore for sharing with us more on shorting by CFDs.....I await your sharing tonight.....

Just to clarify also that I am not advocating whether one should or should not short by CFD. "Risk is not understanding what one is doing." If one is willing to learn and has the right aptitude and suitability towards shorting on margin, one should go ahead and do what is best for oneself (shorting by CFDs).

Not all investing approaches are suitable for everyone based on their investing timespan, amount of capital and risk tolerance. Longing or shorting on margin is likewise only suitable for some and not all. It is alright to try out different investing approaches, but one should always adpot a careful stance (a complacent experienced driver is not a good driver.......a careful driver is a good driver) (one has to be careful about human emotions interferring with rationality).    

 

Short by CFD is just the opposite of long by margin. Reply more when back home

jeremyow      ( Date: 04-Mar-2009 12:57) Posted: Shorting by CFD is not as easy as it seems.....Firstly, one needs to have a disciplined trading mindset which cannot be accomplished by many....One needs to be emotionless when doing shorts and needs to know when to stop shorting and get the profits out or cut loss when needed......all these easily said than excecuted....The human mind is full of greed and fear, and it is not easy to be emotionless and objective.... Secondly, one needs a successful reliable trading system (which even the best trading system can only guarantee at most 70% to 80% success) that can guide one to know when to enter a short position and when to exit (cover back).....Also, one needs to calculate how much is ideal for cutting loss based on one's invested amount so that one does not cut loss too early or too late.....There is also the continual monthly fee charges for CFD to consider so that one needs to decide how long should one keep shorting to remain profitable at the end of the short.... My point is that shorting by CFD is not that easy as one will think it to be....otherwise, why will many private instituitions conduct paid courses just to teach how to short by CFD successfully through their own propriety trading systems....? Livermore      ( Date: 04-Mar-2009 12:28) Posted: You can average down and short at the same time. Your short acts as a hedge. What is hard to understand about CFD

 

Shorting by CFD is not as easy as it seems.....Firstly, one needs to have a disciplined trading mindset which cannot be accomplished by many....One needs to be emotionless when doing shorts and needs to know when to stop shorting and get the profits out or cut loss when needed......all these easily said than excecuted....The human mind is full of greed and fear, and it is not easy to be emotionless and objective....

Secondly, one needs a successful reliable trading system (which even the best trading system can only guarantee at most 70% to 80% success) that can guide one to know when to enter a short position and when to exit (cover back).....Also, one needs to calculate how much is ideal for cutting loss based on one's invested amount so that one does not cut loss too early or too late.....There is also the continual monthly fee charges for CFD to consider so that one needs to decide how long should one keep shorting to remain profitable at the end of the short....

My point is that shorting by CFD is not that easy as one will think it to be....otherwise, why will many private instituitions conduct paid courses just to teach how to short by CFD successfully through their own propriety trading systems....?

Livermore      ( Date: 04-Mar-2009 12:28) Posted: You can average down and short at the same time. Your short acts as a hedge. What is hard to understand about CFD? jeremyow      ( Date: 03-Mar-2009 23:51) Posted: There is no need to pursue shorting by CFD if one does not understand and is not willing to follow the rigors of a shorting approach to investment. I think of it this way. If I keep buying at low prices for a certain stock of a good company. I am actually also applying the idea of shorting by accumulating more shares with my available capital. By not willing to buy during high prices (above intrinsic value of a certain stock), I am now able to buy more of the shares of the particular stock. It is saving the difference in amount that I am now paying compared to buying at a higher price. This bears resemblance to shorting a stock. E.g. Stock A traded at $3 at Jan 2008. I refused to buy then, thinking the price was too high and I waited for better opportunity to buy. I conserved my capital of $3000 and waited. When comes Dec 2008, stock A trades at $1. I am now able to buy 3 lots of stock A with my same capital. If I had bought 1 lot at $3 in Jan 2008, I will now only have 1 lot of stock A with a capital loss of $2000. So, accumulating more shares at lower prices is also like shorting in the sense that one gets the benefit in terms of owning more shares of a particular stock at low price by not entering in Jan 2008 but in Dec 2008 for example. The difference is that one gets paid in terms of owning more shares and not monetary gains by actual shorting. Of course, actual shorting is different from this idea of buying at low prices since actual shorting through CFD allows one to have leverage to short a large amount of shares with a smaller capital.  Conclusion:- Buying more shares at low prices resembles shorting in a sense, but not exactly the same.