Investing megathread extravaganza

[DaFace]

A place to talk about investing stuff.

[scho63]

Originally Posted by lewdog

The initial stop I set is a hard stop set at a certain price determined by the stocks recent low's before a possible trade initiation. In this case the buy price was 58.20 and the initial stop was set at 56.60 for 2.7% risk. This stop is raised if the stock continues to go up but is then determined by it's new movement, and many times set at intraday low's, so the percentage only matters for initiating the trade.

Everyone evaluates or handles different but how do YOU handle stocks that are going to GAP down on the open, usually due to bad news like missed earnings or scandal?

[lewdog]

Originally Posted by scho63

Everyone evaluates or handles different but how do YOU handle stocks that are going to GAP down on the open, usually due to bad news like missed earnings or scandal?

Gap downs are pretty rare when you're trading stocks on breakout but they CAN happen. You'll find many gap downs happen on stocks that have recently retraced and many think it's now a "buy cheap" type deal when in fact it's just a stock that wants to keep sliding.

Since I have good risk management strategies on most of my trades, losing 4% or less on average ALWAYS, if I have a gap down and lose say 10% on a position, it's not ideal but I've done well following my other rules to not make this tank my account.

These rules also help lessen the blow or chance of gap downs.

1. Never put more than 10% of your total account value on a trade.
2. Never hold a stock through an earnings date if you're trading.

[Mr_Tomahawk]

What does this CCIV merger mean that I keep reading about....?

[MTG#10]

Originally Posted by Mr_Tomahawk

What does this CCIV merger mean that I keep reading about....?

Merging with Lucid Motors, old news but supported its finally happening within a month.

[Mr_Tomahawk]

Originally Posted by MTG#10

Merging with Lucid Motors, old news but supported its finally happening within a month.

So boom boom good or boom boom bad if you are still holding a small bag, just in case.

[eDave]

Originally Posted by Mr_Tomahawk

So boom boom good or boom boom bad if you are still holding a small bag, just in case.

It was that merger news that turned it into a meme stock for a while.

[eDave]

Originally Posted by Mr_Tomahawk

So boom boom good or boom boom bad if you are still holding a small bag, just in case.

It was that merger news that turned it into a meme stock for a while. That rumor was already bought. But due to how far back that was, I expect some immediate, short term, growth.

[MTG#10]

Originally Posted by Mr_Tomahawk

So boom boom good or boom boom bad if you are still holding a small bag, just in case.

Lucid will be selling cars soon, they already have multiple production facilities. I think it will easily be a $50+ stock within a year, likely before the end of this year.

[MTG#10]

The way the wash loss rule is enforced makes absolutely zero sense sometimes. I get the need for it, but it's enforced in situations where it shouldn't be.

I bought five different lots of BNGO over the last three months. I sold all five at once a couple weeks ago. The first lot was at a loss, but the rest for profit which total well exceeded the one lot sold at a loss.

Today I decided to buy back in because I think it's going to run again soon, even higher than it did last time. My purchase through Fidelity triggered a wash loss and raised my cost/share enough to immediately put me almost $200 in the hole.

The whole point of the rule is so people cant manipulate stock losses for tax benefits. I couldn't claim the one lot sold at a loss for a tax benefit even if I wanted to because I made so much more on the rest, profiting big overall. But I still got penalized. Am I the only one who thinks this is ridiculous?

[scho63]

Originally Posted by lewdog

Gap downs are pretty rare when you're trading stocks on breakout but they CAN happen. You'll find many gap downs happen on stocks that have recently retraced and many think it's now a "buy cheap" type deal when in fact it's just a stock that wants to keep sliding.

Since I have good risk management strategies on most of my trades, losing 4% or less on average ALWAYS, if I have a gap down and lose say 10% on a position, it's not ideal but I've done well following my other rules to not make this tank my account.

These rules also help lessen the blow or chance of gap downs.

1. Never put more than 10% of your total account value on a trade.
2. Never hold a stock through an earnings date if you're trading.

[lewdog]

Originally Posted by scho63

I didn't have time the rest of the day to post but just adding to this discussion and why risk management is so important. Here's an easy example.

Let's say I am trading with $100k account. Since my rule is 10% position size, I put $10k on a stock I think will breakout but instead gaps down and I get stopped out at 10% loss. A 10% loss of $10k is $1k. And $1k is only 1% of my total account value. I bet everyone here has seen their account value drop much greater than that on any random day. A 10% loss sounds severe but at only 1% of my total account value (due to position sizing), it's something I can live with and regain rather quickly.

I hope that makes is clear why I am such a stickler for keeping your average losses small. Maintain capital so you can find another stock to trade because there's always something to move that money to if your stock screening/rules are working. The only thing you can't do is make money if your capital is depreciating.

[eDave]

I wish I knew all of this stuff.

[lewdog]

Originally Posted by eDave

I wish I knew all of this stuff.

You know plenty and have done well. There's more than one way to skin a cat.

I am just trying to show people it can be more than just guessing and you MUST protect your capital or all these gains you're getting will be gone in a flash. There's a lot of risky things being done by new investors right now. Anyone can self teach if they have the desire/discipline to learn. I've really enjoyed learning this style of trading over the past year.

[chiefforlife]

Originally Posted by lewdog

You know plenty and have done well. There's more than one way to skin a cat.

I am just trying to show people it can be more than just guessing and you MUST protect your capital or all these gains you're getting will be gone in a flash. There's a lot of risky things being done by new investors right now. Anyone can self teach if they have the desire/discipline to learn. I've really enjoyed learning this style of trading over the past year.

Lewdog is a genius. I am not kidding. Listen and learn from this man.

i am just a lucky guy that invested in the worst downturn in modern history. I am an automotive repair shop owner and saw the all time lows in stocks during the pandemic as an opportunity. I invested in XOM, RDSB, OXY, HPQ and a few other stocks I felt were undervalued at the time. I am up about 70,000 at the moment. This i feel is a once in a lifetime opportunity to do, but what lewdog says is an actual strategy to make money.
So, if you are lucky like me or want to actually make money in the stock market on a regular basis, listen to Lewdog.

Hammockparty has helped me along the way for short term profit but Lewdog has the right longterm approach for short term trading. You MUST learn the difference between the two strategies or you will lose money.

We all want to make money and although I have only been in this for a year or so, I have made a substantial amount of money and have looked at a LOT of different sources to gleam information I can tell you what is a decent source of info and what is not.

Thanks to those I have mentioned and some I have not. Digest the info and determine what is valuable and invest accordingly.

I hope we all make money and spend most of it on the CHIEFS!!

[lewdog]

Looking at RBLX above 85.45