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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host -- Ignore unavailable to you. Want to Upgrade?

To: fahrenheit451 who wrote (22861)	8/1/2006 10:34:21 AM
From: queenleah	Read Replies (2) \| Respond to of 42834

3. Failure to Accept and Limit Losses Another major contributing reason to day trading failure, is the reluctance of many traders to exit from a losing position. Many traders hold on to losing positions for far too long, in the hope that the share price will recover. Excellent point. Failure to accept and limit losses is a major contributing reason of all amateur trading failure, not just day trading. Some people just can't bring themselves to do it. That's why it's mistaken and self-deluding to suddenly consider themselves "aggressive traders". Granted, guidance should have been better. So should autonomy, self-awareness and self-control.

To: fahrenheit451 who wrote (22861)	8/1/2006 6:25:29 PM
From: shres	Read Replies (1) \| Respond to of 42834

"...Even worse is the practice of adding to a losing position so as to "average down". This is a recipe for disaster. It is essential to limit (and accept) losses in advance, in accordance with your trading plan, by predetermining your exit point if the stock price moves against you. Stop-loss orders provide a convenient method of doing this." Hmmmm. I have seen some newsletter writers who routinely average down as the price falls below their initial recommended price. They say the stock isn't really falling...it's just getting cheaper. LOL! In fact, if you set automatic buy levels below your initial recommended price aren't you violating this well-known cardinal prohibition against averaging down? OTOH, I guess it's relatively easy to continuously double down as the stock tanks if you are just playing around with fantasy money and not real cash like the subscribers.