標題: Cutting win or loss like a professional trader! [打印本頁] 作者: 小花至愛 時間: 2007-4-30 02:23 標題: Cutting win or loss like a professional trader!
I'm trying to act professionally as a serious individual investor, so let me share my cut-loss/cut-win practices and experiences,,, [about 1 in 4 or 5 times my initial investment turns red, and 1/10 time to cut-loss and 2/3 times to cut win],,,
1. If there is no extra bad news and the stocks have low p/e and low p/b, I almost never cut-loss, sometimes I even overweight and average on stock like HSBC below 140, or 480 with 5 p/e, .6-.7 p/b 6 months ago when I recommended it,,,
(A great teaching from Peter Lynch,,, of course, very cautious value-investors like Buffett will always leave a very safe margin for the stocks they purchase, let say 10% safety zone even with conservative estimate of discounted cash flow)
2. If the stocks are hot frying stuff, 100% discipline in cutting loss [same as warrants],,,
(any speculation and high risk activities must set clear cut-loss level)
3. If unexpected bad news or result were announced, better keep +90% discipline to cut-loss... unless the price drops far below the cut-loss level and was fully reflecting those bad news,,,
(with sudden drop we may look for technical rebound to cut-loss)
4. If the overall market turns bad with bearish trend,,, cut-weight on all stocks and just keep a few defensive ones with decent p/e and p/b,,,
(bearish market must cut-loss after a rebound or before another diving)
5. NEVER turn your decent profit into loss, so before all your profit disappears, better cut-win first (e.g in case your profit is dropping from 15 % to 10%, set a cut-loss price at 5-7% corresponding to the profit you are expecting)
(The best suggestion from the greatest stock gambler, Jesse Livermere)
Brothers/sisters here please feel free to make any comment or recommendation
Thanks for your sharing 作者: 小花至愛 時間: 2007-4-30 09:13
引用:
原帖由 cyberken 於 2007-4-29 20:29 發表
Thanks for your sharing
my pleasure brother,
I think at the current +20500 level, there are still good chances for going up further [let say +23000], but also great probability for 10-20% correction [let say down to 18xxx - 16xxx level],,,
Professional practices in cutting win/loss is a must at the current index level...
Personally my cut-loss level is usually 5-20% for stocks and 15-30% for warrants and other derivatives,,,
Good practices for cutting win are even more complicated matters, perhaps more about them [particularly my numerous faults] later,,,
Recently I cut win on 480, taking +40% profit, and on 903 for +15% profit,,,
2 days later, I planned on to collect both of them after a 3 - 4% adjustment, but because of some of my capital was locked up in the lastest IPO, I could only collected one of them,,, I finally chose 903 for its dividend, but turned out 903 dropped about 4% [probably because of a big stock transfer news] from my latest purchase and 480 went up another 4%....
The lesson is: Riding on stock wave is never easy and there is always a luck factor,,,,
