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S&P 500
5,127.79
(
1.26%
)
US TECH 100
17,446.00
(
2.17%
)
Dow Jones
38,675.68
(
1.18%
)
Brent Oil
83.12
(
-0.01%
)
Bitcoin
64,082.36
(
0.13%
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4Godnwv

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4Godnwv

Re: None

Thursday, 05/18/2006 8:16:02 PM

Thursday, May 18, 2006 8:16:02 PM

Post# of 134
What's the Goal? -

Our goal here is simple.

To collect, collate, and analyze data related to the fluctuations in the price of a stock. To exploit the information derived, by predicting (with an acceptable level of accuracy) the future price over a specific time frame, in order to buy, sell, and make a profit.

To trade with a plan that includes sensitivity to risk. That plan would include the potential for both gain and loss.

“Preservation of Capital” is a primary concern. Cutting your losses quickly is probably one of the hardest lessons for new traders to learn (sometimes old traders too, lol). If you correctly utilize the principles covered here over the next few months you are, in all probability, going to take a profit from some of your trades. Unfortunately, you are also going to miss it some of time as well.

No one gets it right 100% of the time. The good news is, you don’t have to! If you can learn to accept your mistakes in interpretation and timing, and cut your losses quickly, you can minimize risk.

Look at the following Table: 

 Loss       Gain needed to recover Loss 
   10%                   11.1% 
   20%                   25.0% 
   30%                   42.9% 
   40%                   66.7% 
   50%                   100% 
   60%                   150% 
   70%                   233% 
   80%                   400% 
   90%                   900%

Old traders adage - “Cut your losses and let your winners run.”


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