30 cent party, page-15

If you are not supper rich, or there are no stopping coming cash to support you keep trading, you need setup a rule and follow the rule to trade. If you say you want to hold shares like you hold your super for next 10 - 20 years without any trade, then you don't need read this.

(I just want to help new investors to learn few things here)

The Mathematics Of Investment Losses

Consider the math. Say you buy a stock at 50. For whatever reason, it drops 8% to 46 during the next few days. You promptly unload it and move on. To reclaim that loss, you need to make an 8.7% gain on your next purchase with your remaining capital, which shouldn't be hard to do.

What if you hold on? You're sure the stock will snap back. Your research convinces you it's worth $100, so why get scared by a minor setback?

There's one problem. The market doesn't care who you are, what you think, or how much you believe in a stock. It says you miscalculated, at least in the short term — a message that gets louder as the stock drops 25% to 37-1/2. To get back even, now you need a 33% gain, which is much tougher to come by than that easy 8.7%.

What if the market really doesn't like your stock and slices it in half to 25? You don't need a calculator for this one: To recover a 50% loss requires a 100% gain. How many stocks did you pick last year that doubled in price?