Friday, November 28, 2014

Trading 101 : The Art of Cutting Losses

Losing in stocks is like having a bad relationship you want to end.
 But for some sentimental reason, you just can't.


Yeah Right...

And soon, you find yourself drained mentally  and physically by all
 the emotional baggage,. You could have let go and ended it. 
But no! you think to yourself:

"But it's already too late."


"There's still hope!"

When you start chanting these words in your mind. Your port 
 might end up like the ports of two Basura fund managers 
that I happen to stumble upon somewhere.

Specimen A 

Specimen B 

Are you in a similar position? 

I'm sure the stocks in these ports didn't  become the vile 
beasts that they are overnight. So if you find yourself in a bad
position, sit back and evaluate.

"Is it time to let go?"

Cutting is painful. But if you don't want to be sitting in a corner 
crying like a little bitch, then end it early.

Remember : 

There is no shame in taking a loss. 
So cut to trade another day.


  1. What would you reco a family member to do so that he/she can profit from the stock market? Cost average to death sa blues? Mindless participation sa mutual funds o uitf? Go for the lucrative Basura plays? Position plays on 2nd liners? I read somewhere na US hedge fund managers advice their family to go for index ETF. Your thoughts?

  2. I would reco that this family member should study either Technical Analysis or Fundamentals. This way, sound decisions will be made in buying/selling a stock. And when you have the right system and reasons, the money will just follow.

  3. What if you are already there, with a portfolio thats too deep to cut? Do you cut loss? Thank you sir.

    1. Yes. Realize the loss and move on. Because waiting for stocks to recover is opportunity on other stocks lost.

  4. Managing the risk is what matters most.

    "It is not only ABCs of investing but learn to manage the F, G, H, I - Fear, Greed, Hope and Ignorance." - Jesse Livermore

  5. Tinamaan ako dito ah. My port looks a little similar. Ouch

  6. Hi Zee,

    Newbie trade here.

    Do you cut once it hit the stop loss price any time during the trading hours or do you wait near the closing price before you decide if you will cut loss.

    Sometimes I cut mid day of the trading hours only to see the price rising again in the closing.