Rana Sugar
- Thread starter sharadkoul
- Start date
U
kjshah,
Averaging Loss is never advisable ,for 1 simple reason,are you sure this "Falling Knife" ,will not fall further ? The 2nd capital infused ,to rescue the 1st is also blocked ,hence you miss an oppurtunity to utilize that (2nd)
for any gain .Hence both Oppurtunity Cost & Notional Profit is surrendered for an already loss making proposition.Tell me if i tell you to Buy on certain stock
dont you buy for future profit expectation ? Then when you know that the specific stock is giving loss ,would you buy,no fool on this earth will buy ,knowing fully well that this may give me loss,until he is convinced of Profit ,no one Buys.
Now dont we all average ? Yes we do ,but here i am trying to point out to you ,treat that (2nd trade) as an isolated trade,where my intention is to profit by buying at low or to ride a momentum.A seperate trade ,mind not clouded with the outcome of the 1st one,not driven by the urge to average,a complete seperate trade altoghether .Then only you will be able to buy at reversal / consolidation etc.It will then be not a "Falling Knife".
To avoid these kind of situation people has advented SL ,plz determine your comfort zone & decide Stop Losses in future ,quickly discard any Mental Blockade & stop this habit of everyday looking at the loss,our very few trades which runs in profit ,we should look at those stocks.
Knowing fully well this is easy to say than practise,i am trying invain everyday to imbibe this.
Cheers.
Asish
NB : To-day only my SL of Tisco & BEML Fut triggered.
Averaging Loss is never advisable ,for 1 simple reason,are you sure this "Falling Knife" ,will not fall further ? The 2nd capital infused ,to rescue the 1st is also blocked ,hence you miss an oppurtunity to utilize that (2nd)
for any gain .Hence both Oppurtunity Cost & Notional Profit is surrendered for an already loss making proposition.Tell me if i tell you to Buy on certain stock
dont you buy for future profit expectation ? Then when you know that the specific stock is giving loss ,would you buy,no fool on this earth will buy ,knowing fully well that this may give me loss,until he is convinced of Profit ,no one Buys.
Now dont we all average ? Yes we do ,but here i am trying to point out to you ,treat that (2nd trade) as an isolated trade,where my intention is to profit by buying at low or to ride a momentum.A seperate trade ,mind not clouded with the outcome of the 1st one,not driven by the urge to average,a complete seperate trade altoghether .Then only you will be able to buy at reversal / consolidation etc.It will then be not a "Falling Knife".
To avoid these kind of situation people has advented SL ,plz determine your comfort zone & decide Stop Losses in future ,quickly discard any Mental Blockade & stop this habit of everyday looking at the loss,our very few trades which runs in profit ,we should look at those stocks.
Knowing fully well this is easy to say than practise,i am trying invain everyday to imbibe this.
Cheers.
Asish
NB : To-day only my SL of Tisco & BEML Fut triggered.
Last edited by a moderator:
| Thread starter | Similar threads | Forum | Replies | Date |
|---|---|---|---|---|
| P | Hello Everyone!! Pranay Here | Introductions | 12 | |
| V | PRANAMS PRIYA MITHROWNs | Introductions | 1 | |
| H | Pranam | Introductions | 0 | |
| F | Pranaam, namaskaar | Introductions | 0 | |
| A | Requesting Rana Sugars Annual Reports | Equities | 4 |