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Best lesson I learned was planning exits

Posted on: March 15, 2021 at 10:26:10 CT
Zeaux MU
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I'm pretty long term on anything, so if I'm buying a long term stock I don't generally have an upside exit point. Unless you're daytrading crypto you'll likely be a long term long too.

However, with some swingy/riskier stuff, I always go in assuming I'm going to lose a huge chunk (I start looking out at -30% P/L.)

Basically, it's "expect to lose everything" except it's real. Expecting to lose 30-50% on everything I buy reduces stress and allows me to properly position into multiple issues, which has the effect of diversifying your portfolio as long as you're not just carrying 30 meme stocks or everything from a similar sector. If you expect to lose a large chunk in every trade, your trades tend to become smaller and you make more/gain exposure in different issues.

It cost me some market tuition to develop my risk management plan, but once I started spreading the seeds everything got a lot more positive.

Edited by Zeaux at 10:29:37 on 03/15/21
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ashtray...need advice - metalmizzou MU - 3/14 11:36:24
     Best lesson I learned was planning exits - Zeaux MU - 3/15 10:26:10




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