do many of you average down on stocks ?, page-41

Everyone has a different plan,but i never avarage down.

My trading plan says that i have allocated x amount of capital to this trade,if the trade goes against me i calmly exit at either my:

1. Percentage stop-loss

2. Trailing Stop-loss

3. Stop-loss below Support,each trade is different.


I will not allocate anymore capital to a losing trade.If the trade goes against me,that is the end of it,move on.

I make a lot more money than i lose,so i`m happy (sometimes) to take the profits,as well as some losses.

I remember when i started full-time trading 6 years ago,taking a loss was not an option,i just couldn`t do it.You quickly learn that a small loss sometimes becomes a huge loss and there goes your capital and ego.

Psychology is a huge part of trading and now i can take a loss very calmly and easily.I know my exit before i buy and if i`m stopped out,i move on.

When taking a loss,an analogy i like to use is,a Test batsman is not going to make a 100 every innings,he is going to have a lot of failures,but as long as he has a good average over a career,he will be a sucess.

That`s what i aim for in my trading career,i know i won`t ever have a 100% sucess rate,but if i can achieve 70%,i will be very sucessful.

The last 2 years i have achieved better than 70%,which is great in a Bear market,so i`m happy to take a loss occasionly as it keeps me grounded.