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9 COMMENTS

  1. TIL war and peace is about landing 10 baggers

  2. Yea Yea I’ve learned this one a couple times. Now I just open more positions and close the last only when the first becomes green again. It’s martingale for reeeeeees but when you’re green, you’re really green.

  3. When you have a winner, don’t sell it. You’re so far ahead in profit that when a typical pullback happens you’ll never be losing money. You continue holding and it’ll eventually go back up like the stock market has for over 100 years.

  4. Funny, I’ve traded for several years now and never heard that saying. My strategy is usually the exact opposite too: sell when others are buying and buy when others are selling.

  5. Moist_Lunch_5075

    Not a bad write-up, but the “compounding interest” example for stocks is a real pet peeve of mine. Over the years I’ve had quite a few people ask me “So I attended the 401k presentation at work and the guy in the presentation told me about compounding interest and that it applies to stocks, and so I bought X stock and sat on it for 6 months, expecting it to go up month over month, but now I’ve lost half my money… how long until it compounds?”

    I then have to explain to them that stocks don’t actually compound and that a share is worth whatever a share is worth based on what the market is paying. The example of 2% gains over 10 days works to demonstrate what happens to the value of a stock over that time IF the pattern is exactly that, but stocks don’t generate interest and basically never grow by 2% day over day reliably in the real world with few exceptions.

    Aggregate “compounding” kind of works for ETFs because they reposition using lots of the criteria you’re talking about… so in those cases, or in the case of well run funds, gains may “compound” over time as profit is taken out of losers and put into winners as they gain, but the example unfortunately is going to give whoever needs this write-up unrealistic expectations of return.

    I highly recommend we move away from “interest compounding” examples, which have nothing to do whatsoever with stock valuation and how that works. And before someone says it, no… the dodge that’s on lots of websites that says that companies compound their earnings and then feed that into the stock is also, largely, BS. The value of a stock strictly has to do with the demand for that stock relative to sales and the dynamics of the float. If people don’t understand that, they’re not going to understand what they’re trading.

    The “compound interest” example unfortunately helps create bagholders.

  6. ImpliedVersatility

    give me a ticker and a strike ffs

  7. “Bull markets are all about MONETIZATION.”

    – Rick Rule

  8. RadicalFarCenter

    I buy stocks near support and start to sell them at resistance. Just recently bought CHWY. I set a 5% stop loss for if it falls through support. Next major resistance is about 13% profit. I’ll sell some shares and move my stop loss up to 5% below that resistance level if it breaks through. Next resistance will be over 20% profit and I’ll sell a majority of remaining shares. My stop will be around 10% now because I can afford it and the resistance and support are further apart. After that I’m holding through final resistance hoping to moon and too eventually get stopped out on a 5% trailing stop. (Unless news makes me sell to avoid major damage)

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