You might have followed the stock advisor newsletter and seen a few cases about stocks that are not healthy and bankrupt people in just a few days. There are several prevention methods that you can apply when you want to be sure if the stock you are buying is stock manipulation.
Don’t be longer to ‘held’ it and must continue to monitor the market
Learn discipline in trading, so that if profits have been obtained and have reached the intention at the beginning, then first realize these benefits by selling their shares on the market.
If the stock price starts to fall, don’t forget to apply a loss limit action (cut loss) when the price correction that occurs on the stock is greater than the tolerance limit that you already have. For example, if you apply a maximum decrease of 10% per share, then sell shares as soon as possible.
The magnitude of 10% is very relative because everyone has an investment profile, investment horizon, and investment risk tolerance that is different. Set a trading plan at the beginning so that you don’t lose direction and don’t get the wrong style.
Bold cut loss
No one wants to lose, but if you have a loss, don’t be afraid to limit the loss. To trade stocks is not healthy, do not forget to always monitor the market and stock prices that you have every minute or even every second. Because the transaction is fast, it is not impossible that the price will fall when your eyes are not paying attention to the market and forget to cut loss.
If it goes too deep and makes you lose hope, considering that this is an unhealthy stock, then sell at any price so you don’t get carried away by dreams, if you can. This is based on the idea that unhealthy stocks cannot be relied on for certainty in going forward and it is not certain that they will still exist until next year, for example.
Because it cannot be believed that the sustainability of the company, the risk of still having its shares when it has been corrected it is as great as the risk of buying its shares again. In addition, too many stocks that are ‘red’ in your portfolio will reduce flair in the market because psychologically can make traders lazy to look at the portfolio and see market conditions.
After being abandoned and forgotten, many years later the portfolio is more likely to be delisted than turning ‘green’ or giving a profit.
Portions to taste
In order to limit risk, don’t forget to provide only allocating trading shares of an unhealthy share of at most 10% of your portfolio on the stock market. The magnitude of 10% is very relative because everyone has an investment profile, investment horizon, and investment risk tolerance that is different.
It is recommended to maintain the value is not large because the risks contained in unhealthy shares are multiplied compared to blue-chip. So, even if you have to buy the product, not too much to maintain the health of your stock portfolio, and your heart.