It is a seductive habit. You see a big name that has been absolutely pummelled - down 40%, 60% or even 80%. While the rest of the market is running away, I am stepping in, convinced that I have found the bargain of a lifetime.
How I am fixing my addiction:
I am learning to stop being a hero. My new rule: No base, no trade. I am forcing myself to wait for the stock to stop making new lows & actually trade sideways for a while - showing that the sellers are exhausted.
I am also waiting for the price to cross back above its 20 day moving average before I think of touching it. It is better to buy a stock at USD 55 that is actually moving up than a bargain at USD 50 that is still falling.
It takes humility to admit that a cheap stock can always get cheaper. I am still a work in progress.
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- icycrystalยท03-26 09:34TOPthanks for sharing1Report