How to protect my position?

[Jones75]

Hmmm.... I can cite you a million examples that counter your broad-brush statement.

Ever heard the saying "The Market Can Remain Irrational Longer Than You Can Remain Solvent"

I guess you're also one of those people who subscribe to the "double-up opportunity" theory on losses ?

Where did I mention one word about "doubling up"?

Am I to assume you're part of that left wing kooky media? …just make things up to suit yourself?

Owning puts against stock is a conservative way to go. There's no magic formula, just smart profitable defense if you have the acumen.

Do yourself a favor and pick up some reading skills

 

[cdcaveman]

Sounds like he was trading not holding for the long run... First mistake everyone makes is turning a trade into a long term investment....

 

[wtfauoa]

View attachment 167094
I think most of you had experience that price jump high or low in pre-market.
If you are in right direction, congratulate. But if not,it would be a disaster.
Like stock above, it is beat by bad news and crash about 26% low in pre-market.
My question is what is your protection if you are in a long position in this case? And how about cost and return?

It will depend on the stock you are holding and how many shares you bought. If you are worried about losing profit you can use Options, ETF's or Index Futures to lock in some profit, but you must work out the correct ratio and be prepared to adjust as prices move. Option premium will erode over time, so this also must be factored in. What is the stock symbol. Is it a Chinese stock?

 

[wtfauoa]

Hmmm.... I can cite you a million examples that counter your broad-brush statement.

Ever heard the saying "The Market Can Remain Irrational Longer Than You Can Remain Solvent"

I guess you're also one of those people who subscribe to the "double-up opportunity" theory on losses ?

I have to agree with you, as doubling up is really a fools game. I have seen @Handle123 post where he said that he doubles up when daytrading the ES, which means he is a very bad trader in the first place. I also seen a chart he posted in relation to some other market, and based on what the chart said (text mark ups) I am not a bit surprised about his doubling up comments. In summary, any person who condones doubling up is an idiot who knows nothing about trading, and the mere mention of it shows how ignorant they really are when it comes to making money trading the financial markets.

 

[wtfauoa]

FYI

 

[Have a nice day trader]

Best advice is always close the position with whatever loss you have, clear your head and start again. It may be a big loss but chances are it will only get bigger. If you wanted to test that idea just place your stop loss below that big red candle. If it moves down more it takes you out, if it moves up you're still in your trade, might come good. I'd always say just close it out and look for a trade that's going to make you money. Under no circumstances add any more risk to the trade, it may work this time but sooner or later you will dig yourself a hole you can't get out of.

 

[BillKey]

Wow, fellows, it is just a win and loss game, right? Nothing about left or right wing. 'cause if we were, we can walk away with huge money by using power trading, not stock gambling. Right?
And I think there is no old or new fashion in making money. Only winner and loser.

I just want to know the strategy to maximum profit and minimum lost. That is all.

I appreciated @Handle123 structure thinking about plan and trade. The only thing needed to be discussed what should be put into a plan to make it unbeatable. This stock has no dividen, no profit, few revenue and big minus earnings.

@wtfauoa I can tell you the refer no. is CLVS, it went up about 300% when it announced a new drug to be approved for trial but it dropped 30% when it has inferior performance. And? Who knows next would be good or bad?

In this case, swing trade? longterm? How to make a unbeatable strategy and plan? And what if it jump high and low next time? This is what I want to discussed with you guys.

 

[Tim Smith]

what should be put into a plan to make it unbeatable

Hmmm....

There is no such thing as an unbeatable plan. If there was, I and many others here would not be here, we would be sitting on some island in the sun, in a hammock on the beach, drinking cocktails 24x7x365 for the rest of our lives.

The trading game is all about the risk:reward ratio.

You are never going to eliminate risk and you are never going to be able to identify all risks (no matter how many expensive data feeds you have access to).

Therefore all you can do is reduce the identifiable risks to the best of your ability.

You also need to bear in mind that the reward side is very subjective and prone to bias on your side (i.e. its human instinct to always focus on the positives).

Good luck !

 

[Simples]

As long as you're still in the position, there's no realized loss, yet. However, if this is an unbearable drawdown, you should contemplate how and why you put yourself into that position. Ditto if this is a big drawdown.

If you sell, you realize your loss. If you can live with it, this is often the best course of action since you don't know if it'll go down further or not, and then you need to work hard to avoid this situation in the future.

You cannot "protect" yourself against adverse market movements having already happened, but you can protect yourself to a degree against future adverse movements, ie. by using stop-loss triggers. At what point do you think you should give up and just take the loss, or do you want to try to ride it out, possibly losing much more? A middle path could be to determine a stop-loss below current prices, if losing a bit more is worth a shot at trying to salvage the position. To reduce the decision risk, you could spread out several of these stop-loss triggers even.

You're now what they call a "weak hand". Trading is about working hard in order to become a "strong hand", by being on the other side of the trade.

What you decide is entirely up to you.

 

[galvinlee888]

You mean I can not do anything but watching it happened? What about Options? Did you use it for protection before?

Option (long put in your case) will help if you buy it before the crash. It is aka car insurance, you only buy it before the accident happen.

My advice to you is in future if you are in profit when you long stock, you can either close the position with profit or you can lock in the profit with long put.