Sure, if you knew for sure that it was going to hit $10 or lower.
But with stocks like this that can move so fast, you could get burned out of your position/profits if you sell.
I did sell over 17 last time I had this. I followed the MACD, plus a gut feeling. I'll buy it back when either the MACD starts to turn, or I see some support coming into play. preferably both at the same time.
You could do what Probart is doing, and keep say 30% so you give some insurance to your position should it snap back quickly.
One other word of caution, don't buy a long term position on margin- it's a suckers move with these stocks(I know, I got fried last August doing exactly that). Now i use margin ONLY for day or position trading, and rarely keep a margin balance over a weekend, or more that 5 days.
If you use just cash, you control your destiny. On margin, you may not have any say in the matter should it continue to fall and you get a maintance call, you either are forced to sell or cough up more cash.
Hope this doesn't come accross as a lecture, I'm just spewing some thoughts about what I have learned(and I'll admit, I know very little) which may not appear as very much compared to some of the more seasoned traders around here. |
