Bromides that are pure BS
- Thread starter stock777
- Start date
the very fact that u trade means that u have an opinion.
"The trend is your friend"
"Losers average losers"
"Buying options is a fast way to the poorhouse"
"Don't try to pick tops or bottoms"
"Psychology and money management are more important than predicting market direction"
"Never trade with money you can't afford to lose"
"The market is always right"
"Losers average losers"
"Buying options is a fast way to the poorhouse"
"Don't try to pick tops or bottoms"
"Psychology and money management are more important than predicting market direction"
"Never trade with money you can't afford to lose"
"The market is always right"
"Trading without stops guarantees disaster"
"Technical Analysis is worthless"
"Your largest drawdown is always in the future"
"Always trade in the direction of the long term trend"
"Buy and hold stocks is the optimum strategy for an investor with a >30 year horizon"
"Technical Analysis is worthless"
"Your largest drawdown is always in the future"
"Always trade in the direction of the long term trend"
"Buy and hold stocks is the optimum strategy for an investor with a >30 year horizon"
On this common adage, if your entry point is so bad that you can't wait until your entry becomes a winner before you add, it's probably a good idea not to want to add to that position, no?
It's the reasoning behind these "cliches" that's important, not the individual results that one can achieve by breaking them. Lots of people bend over backwards never to "take" a loss, when simply exiting and going for an improved re-entry would yield far better overall results.
If you could simply average your way out of a loss, what would be the incentive then to improve your entry timing on future trades? That is the actual wisdom behind those words I think.
Yes, in most cases exiting and then reentering is preferred.
However, that, like many of the bromides here is easier said than done.
I refer to the notion that once you are in a trade that has gone against you, that it's sacrilege to add to the position at some later point.
This is a toxic premise. Each trade is a separate event, standing alone, within the confines of a total risk management scheme. You would not want to add endlessly to the same trade so that your account was at risk.
However, that, like many of the bromides here is easier said than done.
I refer to the notion that once you are in a trade that has gone against you, that it's sacrilege to add to the position at some later point.
This is a toxic premise. Each trade is a separate event, standing alone, within the confines of a total risk management scheme. You would not want to add endlessly to the same trade so that your account was at risk.