Common Investor and Trader Blunders

jayc
2021-12-28

Averaging Down or Up

Averaging down on a long position in a blue-chip stock may work for an investor who has a long investment horizon, but it may be fraught with peril for a trader who is trading volatile and riskier securities. Some of the biggest trading losses in history have occurred because a trader kept adding to a losing position, and was eventually forced to cut the entire position when the magnitude of the loss became untenable. Traders also go short more often than conservative investors and tend toward averaging up, because the security is advancing rather than declining. This is an equally risky move that is another common mistake made by a novice trader.

$NASDAQ(.IXIC)$$DJIA(.DJI)$$Meta Platforms, Inc.(FB)$$AMC Entertainment(AMC)$$LCID(LCID)$

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精彩评论

  • RudolfKennedy
    2021-12-28
    RudolfKennedy
    Investment is indeed a science. We need to keep learning.
  • falleno
    2021-12-28
    falleno
    Great. I hope our retail investors can make money every day.
  • waipoin
    2021-12-28
    waipoin
    Thank you for sharing! Good luck
  • 躺平躺到地狱了
    2021-12-30
    躺平躺到地狱了
    投资的确是一门科学。我们需要不断学习。
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