Don't ever do this ...

Bad Trades

A bad trade is like a dead fish: The longer you keep it, the worse it stinks.

Good Trades

When a trade is making money, the market is telling them they are right and to let the position ride.

Don't ever do this ...

Winners don't add to, or "average", losing positions. They dump the trade and go looking for a new opportunity. Successful investors may add to the winning trades. When ahead, they press their advantage while remembering that at any time the market can turn on them and prove them wrong.

In trading keep your mind clear and do not get emotional about a trade. Remember you are not married to a stock rather you are in the dating game.

Learn more about common sense trading.

Adam Hewison

Co-founder of MarketClub

9 thoughts on “Don't ever do this ...

  1. Dean, Averaging down might have worked for you in this instance, but it's a high risk way to trade. It's essentially the same as a Martingale strategy.

    It's a sure way to eventually wipe out your trading account. Sometimes stocks don't come back. Sometimes they go bankrupt and go to zero.

  2. ADAM that is the worst advice you could spew out. When you are wrong you are really wrong. I had bought ETFC a while back and when it dropped 10% then 5% then 7% I was felling bad but I knew it was a good investment so I kept buying more and averageing down. Well you know the rest of the story, it was up 12% yesterday and 25% today. I cleared 38,000 in less than 3 weeks by holding on the the "dead fish". Get a grip on reallity.

  3. Quote:

    "Good Trades

    When a trade is making money, the market is telling them they are right and to let the position ride."

    So, is it a prudent strategy to chase a market that has already undergone a significant run-up, just like what has happened in the gold market?
    Or stay on the sideline until a pullback has taken place?

  4. hi
    i would like to i ask about gce in Toronto stock market
    thank you



    Enter the symbol GCE into our trend analysis tool. I think you will find it helpful when looking at trends with our "Trade Triangle" technology.

    Let me know if I can try to help with anything else.


    Lindsay Thompson
    Director of New Business Development &

  5. Curtiss,

    Different objective for those trading here & for those plunking money into a passively managed 401K.

    On the whole you are correct but traders here are actively looking for opportunities that may come & go in a couple of hours while Joe 401K does not want to bother with that. The concept of day trading was often promulgated with the idea the benefits were easy to reap. They are not, even if one uses a good system one has to pay attention.

    In the last bear market I watched as my 401K input was barely able to keep up with the losses. However, when the market turned I was amazed at its growth. The only money going into my 401K now is loan repayments I took out to help build a house.

    See explaination:

    Thanks, Adam

  6. In a truly Bear market, wouldn't most 401k's fall into this category? Especially those of many Americans who do not look at, manage, or even understand their " I won't touch it and just hope it's enough " retirement accounts?
    I propose that the amount of money lost by "average" americans in the 401K market this year will eclipse the funds lost over and above the $100,000 FDIC cap in the banks that are currently failing and will prove to fail.
    The Glitter of Gold is looking sweeter....

  7. I have some uraniun stocks that have come down quite a bit. I am reluctant to sell them and get out, taking quite a loss. They are gearing up for production. Do you believe that uranium stocks will have any rate of return.... should I hold them? Stock is : GEM on the TSX


    David, Thank for your feedback. Our indicators are negative on this stock.
    See Here:

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