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how do you cope with your losses
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It is not quite right to say something is risky if you don't find out more about it but assmue it is risky because it sounds risky
I agree with Livermore that going short is as easy to understand as going long. Trading via CFD is almost the same as trading through cash market.
You can average down and short at the same time. Your short acts as a hedge. What is hard to understand about CFD?
jeremyow ( Date: 03-Mar-2009 23:51) Posted:
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There is no need to pursue shorting by CFD if one does not understand and is not willing to follow the rigors of a shorting approach to investment. I think of it this way. If I keep buying at low prices for a certain stock of a good company. I am actually also applying the idea of shorting by accumulating more shares with my available capital. By not willing to buy during high prices (above intrinsic value of a certain stock), I am now able to buy more of the shares of the particular stock. It is saving the difference in amount that I am now paying compared to buying at a higher price. This bears resemblance to shorting a stock.
E.g. Stock A traded at $3 at Jan 2008. I refused to buy then, thinking the price was too high and I waited for better opportunity to buy. I conserved my capital of $3000 and waited. When comes Dec 2008, stock A trades at $1. I am now able to buy 3 lots of stock A with my same capital. If I had bought 1 lot at $3 in Jan 2008, I will now only have 1 lot of stock A with a capital loss of $2000. So, accumulating more shares at lower prices is also like shorting in the sense that one gets the benefit in terms of owning more shares of a particular stock at low price by not entering in Jan 2008 but in Dec 2008 for example. The difference is that one gets paid in terms of owning more shares and not monetary gains by actual shorting.
Of course, actual shorting is different from this idea of buying at low prices since actual shorting through CFD allows one to have leverage to short a large amount of shares with a smaller capital.
Conclusion:- Buying more shares at low prices resembles shorting in a sense, but not exactly the same.
jng1103 ( Date: 03-Mar-2009 15:45) Posted:
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Jeremy, we both share the same strategy n mindset. I'm not too concerned of the bottoms or catching falling knives, as I'm gradually buying blue chips (namely SPH) for the sake of dividends.
I don't know how to short nor use CFD, so I just slowly accumulate some good quality blue chips. |
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Buying when prices are at rock-bottom (ie. below book valuation) prices is much, much greater wisdom than buying at high high prices and holding as losses snowball...
But then again, book value may also decline as a bad market loses even more 'value'...
try posting this Qn of coping with loss to GIC/Temasek ??
ANS: we look long term.......how long? 10-20years? haha..... :D
Yes, this is what I called superior thinking... hehehe...
It is in accordance with the wisdom of the maxim, "
not having a position is also a position"...
When there's a long and slow fall of prices over a period of time,
not buying or not holding anything is in effect shorting... This is in contrast with those who hold stocks they bought at high, high prices, while they fall and fall in value, constantly psyching themselves into thinking of it as long-term 'investment'.
There is no need to pursue shorting by CFD if one does not understand and is not willing to follow the rigors of a shorting approach to investment. I think of it this way. If I keep buying at low prices for a certain stock of a good company. I am actually also applying the idea of shorting by accumulating more shares with my available capital. By not willing to buy during high prices (above intrinsic value of a certain stock), I am now able to buy more of the shares of the particular stock. It is saving the difference in amount that I am now paying compared to buying at a higher price. This bears resemblance to shorting a stock.
E.g. Stock A traded at $3 at Jan 2008. I refused to buy then, thinking the price was too high and I waited for better opportunity to buy. I conserved my capital of $3000 and waited. When comes Dec 2008, stock A trades at $1. I am now able to buy 3 lots of stock A with my same capital. If I had bought 1 lot at $3 in Jan 2008, I will now only have 1 lot of stock A with a capital loss of $2000. So, accumulating more shares at lower prices is also like shorting in the sense that one gets the benefit in terms of owning more shares of a particular stock at low price by not entering in Jan 2008 but in Dec 2008 for example. The difference is that one gets paid in terms of owning more shares and not monetary gains by actual shorting.
Of course, actual shorting is different from this idea of buying at low prices since actual shorting through CFD allows one to have leverage to short a large amount of shares with a smaller capital.
Conclusion:- Buying more shares at low prices resembles shorting in a sense, but not exactly the same.
jng1103 ( Date: 03-Mar-2009 15:45) Posted:
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Jeremy, we both share the same strategy n mindset. I'm not too concerned of the bottoms or catching falling knives, as I'm gradually buying blue chips (namely SPH) for the sake of dividends.
I don't know how to short nor use CFD, so I just slowly accumulate some good quality blue chips.
jeremyow ( Date: 03-Mar-2009 01:07) Posted:
| Good one...! Either way you stand to gain....Market go down....you earn on shorting.....Market goes up in future....You earn on longing....For me, I am still slowly accumulating shares in good companies that I see future potential in. It is a form of savings for me instead of parking my cash in savings account which does not earn much interest. As I accumulate more shares even at lower prices regularly, my collected dividends will become more and more and then once the market recovers, I also can ride on the uptrend all the way up with a very substantial amount of shares captured at sufficiently low price. The capital gain will be huge on a substantial amount of shares. I am not so concerned with the market going down. I just see it as chance to buy some more shares of good companies at even cheaper prices. As long as one sticks to a sound investing approach, the opportunities are there. |
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It is not about waiting for your ideal stock price. Once the STI recovers, just buy. You cannot get ideal prices all the time. Surely if your ideal price for a stock is $1 but when it drops to $1.20 and STI recovers after that, you won't buy? Then after 4 years when all have gone up, surely you are not going to say,"Sharks I did not buy because the stock did not drop to my ideal price."
STI must go below 1473.77 to start the 5th wave. Then let's see if possible to draw trend line.If after drawing trend line, STI hits trend line and goes back up, just maybe that could be the bottom.
pikachu ( Date: 03-Mar-2009 18:30) Posted:
How do you reckon that we are near the bottom? Would be keen to hear your analysis
Livermore ( Date: 03-Mar-2009 17:42) Posted:
| We are near the bottom thus to average down you won't lose your pants. But if you averege down from STI 2500, you are almost "half naked" |
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Don't think you can get SPC at $1.70.
lookcc ( Date: 03-Mar-2009 18:06) Posted:
| near bottom then sembmar 1.00, kepcorp 3.35 n spc 1.70 so dun think sti near bottom....tis is not a sell or buy call, just opinion.
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How do you reckon that we are near the bottom?
Would be keen to hear your analysis
Livermore ( Date: 03-Mar-2009 17:42) Posted:
We are near the bottom thus to average down you won't lose your pants. But if you averege down from STI 2500, you are almost "half naked".
jng1103 ( Date: 03-Mar-2009 15:45) Posted:
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Jeremy, we both share the same strategy n mindset. I'm not too concerned of the bottoms or catching falling knives, as I'm gradually buying blue chips (namely SPH) for the sake of dividends.
I don't know how to short nor use CFD, so I just slowly accumulate some good quality blue chips. |
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near bottom then sembmar 1.00, kepcorp 3.35 n spc 1.70 so dun think sti near bottom....tis is not a sell or buy call, just opinion.
where to find so many bullets to keep averaging down? only manage 1 lot per month
hoping for bonus soon
We are near the bottom thus to average down you won't lose your pants. But if you averege down from STI 2500, you are almost "half naked".
jng1103 ( Date: 03-Mar-2009 15:45) Posted:
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Jeremy, we both share the same strategy n mindset. I'm not too concerned of the bottoms or catching falling knives, as I'm gradually buying blue chips (namely SPH) for the sake of dividends.
I don't know how to short nor use CFD, so I just slowly accumulate some good quality blue chips.
jeremyow ( Date: 03-Mar-2009 01:07) Posted:
| Good one...! Either way you stand to gain....Market go down....you earn on shorting.....Market goes up in future....You earn on longing....For me, I am still slowly accumulating shares in good companies that I see future potential in. It is a form of savings for me instead of parking my cash in savings account which does not earn much interest. As I accumulate more shares even at lower prices regularly, my collected dividends will become more and more and then once the market recovers, I also can ride on the uptrend all the way up with a very substantial amount of shares captured at sufficiently low price. The capital gain will be huge on a substantial amount of shares. I am not so concerned with the market going down. I just see it as chance to buy some more shares of good companies at even cheaper prices. As long as one sticks to a sound investing approach, the opportunities are there. |
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Shorting is a form of hedging as you average down
Short sell with CFD just tell your broker to sell to buyer. Cover back just buy from seller. Nothing complicated. Don't need to worry about time. It is negligible.
jng1103 ( Date: 03-Mar-2009 15:45) Posted:
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Jeremy, we both share the same strategy n mindset. I'm not too concerned of the bottoms or catching falling knives, as I'm gradually buying blue chips (namely SPH) for the sake of dividends.
I don't know how to short nor use CFD, so I just slowly accumulate some good quality blue chips.
jeremyow ( Date: 03-Mar-2009 01:07) Posted:
| Good one...! Either way you stand to gain....Market go down....you earn on shorting.....Market goes up in future....You earn on longing....For me, I am still slowly accumulating shares in good companies that I see future potential in. It is a form of savings for me instead of parking my cash in savings account which does not earn much interest. As I accumulate more shares even at lower prices regularly, my collected dividends will become more and more and then once the market recovers, I also can ride on the uptrend all the way up with a very substantial amount of shares captured at sufficiently low price. The capital gain will be huge on a substantial amount of shares. I am not so concerned with the market going down. I just see it as chance to buy some more shares of good companies at even cheaper prices. As long as one sticks to a sound investing approach, the opportunities are there. |
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Jeremy, we both share the same strategy n mindset. I'm not too concerned of the bottoms or catching falling knives, as I'm gradually buying blue chips (namely SPH) for the sake of dividends.
I don't know how to short nor use CFD, so I just slowly accumulate some good quality blue chips.
jeremyow ( Date: 03-Mar-2009 01:07) Posted:
Good one...! Either way you stand to gain....Market go down....you earn on shorting.....Market goes up in future....You earn on longing....For me, I am still slowly accumulating shares in good companies that I see future potential in. It is a form of savings for me instead of parking my cash in savings account which does not earn much interest. As I accumulate more shares even at lower prices regularly, my collected dividends will become more and more and then once the market recovers, I also can ride on the uptrend all the way up with a very substantial amount of shares captured at sufficiently low price. The capital gain will be huge on a substantial amount of shares. I am not so concerned with the market going down. I just see it as chance to buy some more shares of good companies at even cheaper prices. As long as one sticks to a sound investing approach, the opportunities are there.
derricktan ( Date: 02-Mar-2009 21:14) Posted:
There is really no problem with buying only...quite right. But since you want to be in this game..why not make use of the avaible tool called CFD to short and make money too..to be on top of this game. I was making a lot last year shorting and right now too. I dont worry about about my "paper loss" which might be there for many many years. I dont worry about where is the bottom..I just ride whatever trends in the market. My money is not stucked and i get to enjoy my fruits now and many years to come.
This is then call financial independence ! |
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Sian i only can see people buy the stock in de morning. My stock is all struck. No money to buy for today
A loss is a loss, no matter what..plain simple.
ekekeg ( Date: 03-Mar-2009 11:05) Posted:
my frend said, even tho his losses were huge, book losses are not losses, but hedging losses are real losses. How far is this statement true? |
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your friend rich man..can paper loss like warrent buffet.
