Never attempt to struggle against a trend. It could be tantalizing to get a falling stock to average your costs. In truth, many investors appear to counsel such a step. In practice, in a large percentage of scenarios this only ends in throwing good money after bad.
Always have a stop loss, for each stock. If your stock moves down, at what price must you definitely sell? If you don’t use historic data and technical research to arrive at investment calls, you’ve got to have at least a fixed-amount technique. Meaning, before you purchase you’ll have to decide how much loss you can nicely take on that stock, and stick to it. Never hold on to a stock position which has moved outside your comfort level. As the proverb goes, look after your losses and the profits will look after themselves.
When a stock is losing steam, book profits. Later, if the stock shows signals of picking up momentum again, you can always enter, even at higher levels. Your choices are based mostly on the possible upside from that cost. Always recall that there’s an opportunity to enter any position. If you have invested in a stock, you have effectively made your stock market basics and research, that money from being invested in another stock with, maybe more, potential. Once more, to copy : look after your losses, and the profits will take care of themselves.
