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Never add to a losing trade is 101 my friend. If you can’t see this then while you may get lucky on occasion, it’s a losing strategy.
Good luck though. I hope you get lucky here.
I have made plenty of mistakes over the years. £1.2 million up over 8 years but that conceals some howling errors.
We are all learning my friend. The day we think we are not is there start of our demise.
Good luck to you.
Your outlook is binary beyond belief.
Firstly, you haven't lost a thing unless you sell. The loss is on paper. If one bought at 44, and the again at 42, the average is 43, and currently in profit. Simple.
Nothing wrong with buying dips, and averaging down. Dips here are opportunities, the company is going in the right direction.
Timing is everything in this game, some you'll nail others you won't. You'll rarely find the bottom or exit at the top. You'll soon learn.
And where does it end? You keep adding the more it drops? Average down your position but this does not mean you don’t lose more money than if you did not add a further trade.
Blind faith gets you nowhere.
I'd say it depends on the underlying reason for the drop in price. If it's just day to day fluctuations then no, it's not a losing trade. If the price is drifting down for a reason then yes, it's a losing trade and averaging down could be a risky move.
If you have bought in at 44 as an average then if it drops to 42 then you are in a losing trade therefore adding to a losing trade.
so if I buy again at say 40p (I wish), I might be able to average my price down to say 42p, which would then make me break even overall. If I am buying as a value investor I believe that the share is undervalue so holding more stock at a price less than my anticipated valuation is surely a good thing??
I've bought in three times which averages at 44p so at the moment I am in a loss making situation across the total trades.
I bought in at 31p and averaged it to 39 by buying more to hold. I'm done buying though. just waiting for the right time to sell or may be hold long term.
So the highest price you have bought in at is 44? Just tell us what prices you have bought in at.
The fact that CPI woncontracts from the Government, which is considered a great customer line up, have undrawn available credits and not considering any government loan schemes for Covid, I take this as a win. This assurance not even taken into account of the sale of Eclipse and another ESS sale line up. So I this as a win. I'm comfortable enough to leave my cash with Capita for another 2 months. The question is whether if it's worth holding for a year or so. If not I will relocate all my cash somewhere after reaping a good amount of profit after 2 months. I'm talking after minimum 100% return and I'm pretty sure this can be done.
what do you call a losing trade... you are really confusing me? If I've bought at an average price of say 44p and the price is now 42p then surely this is a losing trade / a dip?
What are you invested in at the moment? What price did you buy? Maybe I misunderstood.
The FTSE is down 0.5%. Hardly a big drop.
Explain how is this a losing trade pls? If you're referring to the price dropping this morning, general market is down not just CPI.
Dips fine but don’t add to losing trades.
Learningtrader.... why do you suggest it's not a good idea to buy on the dips? I'm intrigued??
learningtrader dishing out the advice, less talking, more learning!
You add to losing trades? Never a good idea.
I buy on dips and hold for 99p great share for sure undervalued atm.
Warren Buffett holds long term and he seems to have done OK.
The majority of day traders lose money.
Personally I find that holding for a year produces the best results.
No thanks
Yes, the real trick to the swing trading game are of course entries & exits. I am a TA guy. Take a look at my charts on my twitter if you like? @SwazersC
swazers - I agree with you. I have gotten badly unstuck on several AIM shares by not taking profits. One share I hold has a bid of around 16p and my average is around 33p. but had I taken profits I could have netted £30K+. I think CPI will do okay though I think it will be a bit of a wait for it to break £1 frankly. But buyers and holders beware !!!
I am holding around 16,000 shares at between 32 and 36p.
I intend to hold long term, because once the FTSE recovers and the sales of Eclipse and ESS are confirmed this will get back to the pre Covid level of 170 to 200.
RE: Long term hold?28 Jun 2020 09:00
A combination of the two strategies I have used. I first bought £10000 in about a month ago at 47p. Priced drop to around 43p and I bought another £4000. The price dropped to 39p and bought another 2000. Last week I sold both the ones I bought for 39p and 43p for a profit of about £900 when cpi jumped about 15%. I still got my initial investment for the long term and still have the free cash to reinvest in good dip.
Similar strategy have been used for my rbs shares. Bought in at 210p but manage to average down to 170p. Still a long way to go on that one. Hopefully, there might be a few dips to buy in and bring my average to about 140.
I guess all I am trying to say is long term investment is good but there is also a real opportunity here in this volatile market.
Prior to covid I was about £5000 in profit. By march I was sitting on a loss of about £15000. It stressed me and I hardly slept. But today I am sitting on a loss of £4000 although not much has happened in the shares I have.
A combination of the two strategies I have used. I first bought £10000 in about a month ago at 47p. Priced drop to around 43p and I bought another £4000. The price dropped to 39p and bought another 2000