Has been holding this post in draft bucket for more than 2 weeks. Putting numbers to simulate scenarios on price going down trend. The figures are arbitrary. Is not meant to encourage anyone to cut loss on any particular stock. Is meant to educate myself on risk management.
B - Buy , S - Sell
Cutting loss at one go as in scenario 1 , 2 and 3 at different price points. Losses ballooned.
How about staggered loss in Scenario 4. Almost Scenario 2 except you get to see $13 price range.
Feeling Rich not to cut loss and instead average down at different stages in scenario 5. Ended up with 20 Lots with -$33.5 K loss and 300 K asset stuck
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When market knifed, a number freeze. Some choose not to cut loss even when they know is coming. They are the "Heroes". A number even average down till no bullets. For the timid me now, I will cut if fundamental is against me, and not how deep my pocket is. And buy back at my terms.
Who are you ?
Cory
20160826
