Losses versus gains

[wxytrader]

Hey so my break even on MARA is $22...meaning it has dropped 27.27%. For it to return to $22 means it will have to increase by 37.5%. So is it harder for stocks to recover from losses than it is to suffer the losses?


This wasn't my original topic, but I changed my mind so this is always a good one for laughs.

 

[S2007S]

That's just the nature of mathematics, what you could do to change the outcome of waiting for that 37.5% increase is to cost average in, that could be one way to benefit that situation.

In the last month alone there have been thousands of stocks in that position however the last 8 trading days alone has been nothing but insane producing returns in some etfs and stocks as High as 40% to 60% in literally 2 weeks!!

Some stocks have literally gone parabolic.

 

[wxytrader]

That's just the nature of mathematics,

Yes! But it is not the nature of stocks...the math is irrelevant. I count 6 recoveries beyond the losses, versus 3 fails going back to Jan.

 

[S2007S]

Yes! But it is not the nature of stocks...the math is irrelevant.

True the stock doesn't know it's needs more of a percentage gain to make back the losses...anything goes.
Look at carvana...

That stock lost 90% of its value and almost went bankrupt now people are buying this stock as if it's the best thing ever..

I wouldn't touch the damn thing.

 

[wxytrader]

True the stock doesn't know it's needs more of a percentage gain to make back the losses...anything goes.
Look at carvana...

That stock lost 90% of its value and almost went bankrupt now people are buying this stock as if it's the best thing ever..

I wouldn't touch the damn thing.

You'd be surprised how many traders believe in this fallacy.
https://www.cnbc.com/2023/05/15/why-an-investment-loss-is-harder-to-gain-back.html

 

[maxinger]

Hey so my break even on MARA is $22...meaning it has dropped 27.27%. For it to return to $22 means it will have to increase by 37.5%. So is it harder for stocks to recover from losses than it is to suffer the losses?


This wasn't my original topic, but I changed my mind so this is always a good one for laughs.

What? Your max loss is > 27.27?

Or do you trade without cutting loss?

Or you HODL?
Some experts say HODL is a very simple brainless strategy. Use it and
you could retire very rich.

 

[wxytrader]

View attachment 346972View attachment 346973


What? Your max loss is > 27.27?

Or do you trade without cutting loss?

Or you HODL?
Some experts say HODL is a very simple brainless strategy. Use it and
you could retire very rich.

Hodling is not brainless at all...it takes an understanding of where price is going.

I was assigned @ 26.05 and my break even is actually $19.73 now.

I don't cut losses by closing a position...I cut losses by collecting premium.

I manage risk by size of position. I only trade stocks where the premium I collect will offset a MAX loss bankruptcy within 3-6 months. I call it the P:B ratio.

Example. If I am collecting $400 per weekly, then I will risk up to 10k max.
400*4=1600*6=9600

 

[S2007S]

I was assigned @ 26.05 and my break even is actually $19.73 now.

I don't cut losses by closing a position...I cut losses by collecting premium. I manage risk by size of position. I only trade stocks where the premium I collect will offset a MAX loss bankruptcy within 3-6 months. I call it the P:B ratio.

I have started to play options like that as well, but what I have been doing on certain options is rolling them out to collect more premiums without getting the assignment until months out ...
Only doing it on a handful of option plays just to see how it plays out.

 

[S2007S]

Hodling is not brainless at all...it takes an understanding of where price is going.

I was assigned @ 26.05 and my break even is actually $19.73 now.

I don't cut losses by closing a position...I cut losses by collecting premium.

Are you selling calls against the position currently?

 

[wxytrader]

I have started to play options like that as well, but what I have been doing on certain options is rolling them out to collect more premiums without getting the assignment until months out ...
Only doing it on a handful of option plays just to see how it plays out.

Yes the name of the game is stay in the game...don't let them take your lunch money by realizing a loss.