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Originally posted by Stage-2-Uptrend
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Any investor and trader who either lost everything, or a substantial amount on BIG, did not have a trading plan that includes risk management. They need assistance from experienced investors and traders. Consulting trading books, doing courses, and attending seminars is a good start to formulating a trading plan. HC is the last place to visit for investment advice. While HC serves a useful function such as asking about the best economical to run cars, etc, most of what is on here re stock trading is not useful. I would go as far to say that HC is best avoided for someone seeking investment advice. Most professional share traders and investors may have used HC at the beginning, but they soon outgrow it and realise that at least 90% of the content is superfluous and not relevant. As an ex-BIG holder, I exited the trade when the moving averages started to head down. I only had circa 6% of my total trading capital on BIG. The loss was under 0.5% of total trading capital. Based on my 19 years of trading experience and research, here are some basic points that need to be STRICTLY OBSERVED in a trading plan: 1. Never place more than 10% initially in any one share. An additional maximum 5% can be placed as part of a pyramid strategy assuming the share is strongly trending up. 2. The vast majority of stocks in a portfolio should be maximum 10% of total trading capital. This means out of a nominal $100,000 trading account, $10,000 maximum allocated to BIG. 3. Sell any stock that falls below the 200-day moving average. This will save a trader from being involved with the likes of RFG, TLS, BIG, FLC, and many other disaster stocks. 4. Never buy a stock trading below the 200-day moving average. These stocks are weak for a reason, and more often than not, only progressively get weaker. 5. Use a stop loss in order to protect trading capital. Preservation of trading capital is the number 1 priority. 6. Don't discuss your stock portfolio with family and friends. The very few exceptions might be a professional trader who can advise on further refinements re diversification and/or risk management. 7. Never average down and buy more shares that are already showing a loss. 8. Don't use HC or any other public forums to discuss stocks. ALU_AMI_APT_AX1_BPT_BIN_EHL_EVN_IGO_LYC_NXT_SAR_SXY
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Great trading advice. With all due respect to HC, I regard most discussion here on HC as pub talk. Would anybody take trading advice from a mate, who spoke to mate and openly talk about it in a pub?
