Eric,
This morning you were discussing the pros and cons of averaging down which I happen to agree with, particularly with MTEI.The following could be applied to all stocks you believe possess the fundamentals needed to move them forward and was written by a gentleman whose been around:
<<<
Don't sell a position simply because it is going down, you don't lose until you sell. When
you sell it is a serious decision, that has been weighed heavily. Don't expect to time the
market, no one can and the pros are a lot better than us. The strategy on a company
you believe in, is to average your position, than when the stock turns, as it will, your net
market gain is better. You should not max out your cash and / or margin position on any
one order. You'll need to be able to average as you go along. I keep repeating this,
because it is a fundamental and will change your whole attitude towards swings that
happen during the trading day.
If you daytrade you will only make as much money as the size of the position you'll scalp
on. Daytrading can be exhilarating, but can also ruin you financially. If you want to
daytrade, make sure you:
1. Understand a Level 2 screen and time and sales
2. Get a feel for the market makers in the stock.
3. Get a feel for the other type of investors in the stock.
4. Have lost $50K trading.
5. Can lose another $50k.
6. Go to the bathroom only before and after trading hours.
Daytrading is about momentum, not fundamentals. Most daytraders will hardly ever
make more than a % of their portfolio a day. And unless they have great resources, will
eventually peter out within a few months. Daytrading is an individual act, which requires
that you benefit off of momentum. >>>>
|
