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SynthTrader

03/06/12 9:39 PM

#15675 RE: IHL19 #15672

Just as a little advice...take it or leave it.

When you get stuck in a bad trade, like buying NSRS at .40 and holding your shares as it drops down to .10, I would not recommend just sitting on your hands and hoping "it goes back to $1" or even 40 cents. If you want to get your money back because you chose not to cut your losses, then consider averaging down and get out a lot sooner. It is wishful thinking to imagine a 300% bounce just to get your money back. Maybe it will happen, but most likely it won't.

If you were to spend an equal amount of money as your first purchase and buy 4-times the number of shares at .10 that you bought at .40, you'd be set to sell at .20 and make a little profit on your exit. Or you could have sold at .16 and been out with no losses.

You probably already know this, but I just say it because you mentioned that you're "hoping this gets over $1" as if that's your only option.

Perhaps you had spent all your trading funds on that first buy, so averaging down wasn't an option (yeah, I've done that before). To avoid that in the future, I'd only "catch the knife" on falling stocks buy easing in, a few shares at a time, leaving some funds available to average down if necessary. Bottom plays can be very profitable, but can also be dangerous if you don't time them just right and get your average share price as low as possible in the effort.